Why It Takes Two to Four Days To Transfer Funds Online

The WSJ stepped into the high yield online savings world with an article on transfer times using online banks. There wasn't a lot of new information but it was a decent recap of why it takes 2-4 days to process a transfer.

The WSJ stepped into the high yield online savings world with an article on transfer times using online banks.  There wasn't a lot of new information but it was a decent recap of why it takes 2-4 days to process a transfer.

The Journal article describes this process of someone sending a transfer from an online svings account to their online checking account. at a different bank:

"What happens during that time? ING sends transactions in batches during the day to an automated clearinghouse, which sorts them and moves them to the receiving bank in a matter of two to four hours, according to Arkadi Kuhlmann, chief executive officer of ING Direct USA, a unit of ING Groep NV, and Elliott C. McEntee, chief executive of Nacha, the Electronic Payments Association, a not-for-profit group that oversees the automated clearinghouses.

In many cases, the receiving bank gets the transfer the same day. Under rules established by Nacha, money that moves on Monday should be available by the end of Tuesday. If the transfer slips to early Tuesday morning, the money should be available first thing Wednesday morning."

Banks then wait another day or two to ensure that the funds are good and have cleared.  According to the article, depositing money into an online account took even longer- 5 business days, as ING wanted to make sure the funds were good.

Here are some tips for speeding up the transfer process:

  • Plan ahead if you know you need the money.
  • See if your money market account ccount has check-writing privileges.  Paper checks can actually clear faster than electronic transfers.  
  • Compain if the transfer takes more than 2 business days to receive money you "pushed" from another bank.  NACHA, the organization thatruns the ACH system can levy fines on banks if they hold your money for too long.

The article states that Europe has a faster transfer system and that enhancements to speed up the transfer process are under development.  That's good news for consumers.  In the meantime, if you've done a transfer and it takes more than 2 business days, call your bank and complain.  

So, if you need your funds from an online account, plan ahead.


ING Direct Bucks Rate Trends and Raises Rates on CDs and Electric Orange Account

Rate information contained on this page may have changed. Please find latest savings rates.

ING has joined the rate raising crowd. Even though interest rates are projected to drop, banks are keeping their rates steady, or even raising them. I'm not complaining.

ING Direct has bucked the prevailing wisdom like many other banks and raised the rates on severa of its certificate of deposit terms and its Electric Orange Savings Account.  While the market is still assigning a greater than 50% probability that the Fed will cut rates again after its emergency cut of 50 basis points (half a percentage point) two weeks ago, banks have mostly held their rates steady or have even increased them.  This analysis shows that savings account yields have actually held up relatively well as the market and economy has fallen apart. 

That trend seems to be continuing.  ING Direct raised the rates on its 12 month CD and its 18 month CD by 25 basis points (quarter of a percentage point)  making them more competitive.  It also raised the rate on the top tier (above $100,000 in balances) of its Electric Orange Account.   

The parent company of ING Direct, ING was recently bailed out by the Dutch goverment to the tune of $13 billion.    ING has major insurance and commercial banking operations.  The retail bank has $338 billion euros in savings and current-account deposits at the end of last year, making it one of the world’s largest retail banks.


GMAC Bank Raises Online Savings Rate to 3.75% APY

Rate information contained on this page may have changed. Please find latest savings rates.

Even though the Fed dropped rates last week by 1/2 percent, GMAC raised the rate on their online savings acccount from 3.5% APY to 3.75% APY.

Even though the Fed dropped rates last week by 1/2 percent, GMAC raised the rate on their online savings acccount from 3.5% APY to 3.75% APY.  This places their account amongst the Top 10 best online savings account rates according to the BestCashCow rate tables. 

From all accounts, opening an account at GMAC is easy and straight-forward.  You can fund your account via an account-to-account transfer and they use an initial trial deposit to verify your ownership. 

GMAC is rated 3 1/2 starts according to the latest Bauer Financial analysis but the company has come under stress due to the credit meltdown.  It's residential mortgage arm, Residential Capital (ResCap) is relying on the Treasury Bailout plan to keep it solvent. 

It's this pressure which probably led it to raise rates in its efforts to keep and attract new deposits.

Remember, as with any institution to keep your deposits amounts below the FDIC insurance limits.