ACH vs Check – What Is the Difference?


Whether you are looking for the most convenient way to pay your rent or get your paycheck, chances are you’re considering ACH transfers or checks. ACH transfers and checks are two of the most common ways to move money between banks.

However, there are some stark differences between the two. We’ll go over the ins and outs of ACH vs checks so you can decide which one makes the most sense for you.  

What is ACH?

ACH transfers are electronic money transfers that are processed by the Automated Clearing House Network. ACH transfers are a secure, convenient way to move money directly between bank accounts. 

Even if you’ve never heard of ACH transfers, you still might have used an ACH transfer. If you’ve ever set up direct deposits with your employer or have had government benefits deposited into your bank account – you’ve used an ACH transfer. Some other common ways ACH transfers are used in everyday transactions include paying bills online, moving money from a checking account to a savings account, or automatic contributions to a retirement account. 

What is a Check?

A check is a signed document that allows money to be withdrawn from one bank account and deposited into another. People often use checks as a substitute for cash, especially when transfers involve large sums of money. The person that writes the check, called the drawer, agrees to have a set amount of money taken out of their account. 

A check contains the drawer’s bank account information, their signature, the amount of money, the date, and the name of the person they are giving the money to. Only the recipient of the check is authorized to receive the money.  

Checks have been around for a long time and are a slightly more old-fashioned method of transferring money. However, they are still widely used today. People use checks to pay bills, pay rent, and make deposits. Some people write checks as a gift and some stores may even allow you to pay with a check. 

How are ACH Payments and Checks Similar?

ACH payments and checks are both inexpensive ways to transfer funds. Other methods like wire transfers can charge you between $20 to $30 for sending money. If you’re sending money via ACH or a check you’ll never have to pay this much. Most ACH transfers are free, but in the rare case you are charged, it likely won’t be more than a few dollars. Sending checks is also free, although you might have to buy the checks from your bank. 

ACH transfers and checks both work best for domestic transactions. If you are trying to send money abroad or receive money from someone in another country, these two methods are not your best option. ACH transfers only work for domestic banks while most banks are not willing to cash foreign checks. It’s best to rely on a wire transfer for international payments. 

ACH transfers and checks are used to substitute large amounts of cash. But while cash transactions are practically instant, ACH transfers and checks take a couple of days to process. It can take anywhere from 2 to 5 business days for the money from an ACH transfer or check to clear. You’re probably familiar with this timeline if you receive your payment via direct deposits. We’ll touch upon how you can speed up this process towards the end of the article. 

What Are the Differences Between Checks and ACH Payments?

ACH transfers are a more recent, electronic method of transferring money. While checks are physical documents that rely on older security measures. ACH transfers are noticeably safer than checks – which can be forged, lost, or stolen. Checks also contain valuable information about a bank account, like the routing number and account number. It’s easy for checks to fall into the wrong hands and for personal information to be compromised. 

Although both methods can be thought of substitutes for cash, only checks can actually be exchanged for cash. ACH transfers deposit directly into your bank account and you will need to head to your bank or nearest ATM to withdraw cash. On the other hand, your bank can exchange your check and give you cash on the spot – as you have enough funds in your account to cover if the check bounces for any reason.

How to Get Your Money Faster 

If you need cash quickly but you don’t want to wait a couple of days for your ACH transfer or check to clear, consider Instacash. Instacash is a 0% APR cash advance that deposits money into your account instantly. You can get up to $250 and pay the money back with your next paycheck. It’s simple, easy to use, and entirely online. 

MoneyLion’s online checking account, RoarMoney, offers unique benefits you won’t find at most banks. Including cash back on debit card purchases, price protection, and budgeting tools. You can even get your paycheck up to 2 days earlier when you connect your direct deposits to your RoarMoney account. 

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