Echeck

What is an echeck?

An echeck, or electronic check, is a way to make payments online or over the phone by providing your bank routing and account number, similar to providing a paper check. It allows the funds to be pulled directly from your checking account

Is an echeck safe?

Echecks can be a secure payment method as long as you take proper precautions. Here are some tips on using echecks safely:

• Verify the recipient is trustworthy before providing your banking information. Only use echecks for established, reputable merchants and companies you know and trust.
• Check for "https" in the URL and a padlock security icon. These indicate the payment page is encrypted for safe transactions. Avoid sites that look unsecure.
• Never provide banking details via email, as this is unsafe. Legitimate merchants will direct you to a secure checkout page.
• Review your account activity frequently to check for any unauthorized withdrawals. Report suspicious transactions right away.
• Consider using a credit card for higher dollar online purchases. Credit cards provide additional fraud protection and allow you to dispute charges.
• Never image or email a physical check. Only provide details electronically via a secured checkout form.
• Shred any voided physical checks to prevent manipulation of your account details.

How long do echecks take?

Echecks can take a few days to clear.

Echecks, or electronic checks, are processed through the Automated Clearing House (ACH) network. This is a slower system than traditional debit and credit card networks.

It typically takes 2 to 3 business days for an echeck to clear after you deposit it. But in some cases, it can take up to 5 business days.

The processing time depends on several factors, like if the echeck was drawn from an out-of-town bank, the volume of transactions that bank is processing, etc.

While an echeck is processing, the funds are usually placed on hold. The hold period can range from 1 to 10 business days. Once the echeck clears, the hold is removed and the funds are deposited into your account.

If an echeck bounces or is returned for insufficient funds, the funds will be deducted from your account and you may incur a returned check fee from your bank.

With physical paper checks, there is generally a longer clearing time of 5 to 7 business days. So echecks do offer a faster clearing process.

Can an echeck bounce?

Yes, echecks can bounce just like regular paper checks. Here are some reasons why an echeck may bounce:

• Insufficient funds - The sender does not have enough money in their bank account to cover the echeck amount. This is the most common reason echecks bounce.
• Closed account - The sender's bank account was closed before the echeck cleared.
• Stop payment - The sender placed a stop payment on the echeck, preventing it from being paid.
• Fraud - The echeck was created fraudulently and the bank detects and rejects it.
• Bank error - The sender's bank made a mistake and rejects the echeck.

If an echeck bounces, you'll typically be notified by your bank with a returned check notice. The funds that were on hold while the echeck was clearing will be deducted from your account, and you may incur a returned check fee.

It's a good idea to wait until you're notified that the echeck has cleared before spending the funds. That way you can avoid issues if it ends up bouncing.

Are there fees for echecks?

Yes, there are often fees associated with echecks. Here are some common echeck fees:

• Deposit fee - Some banks charge a small fee each time you deposit an echeck. This is most common for business accounts. Fees typically range from $0.25 to $2 per deposit.
• Returned check fee - If an echeck bounces, your bank will likely charge you a returned check fee. This fee can be as high as $10 to $35.
• Stop payment fee - If you request your bank to stop payment on an echeck you wrote, you'll usually be charged a stop payment fee. This is typically around $15 to $35.
• Expedited fee - Some banks offer expedited echeck processing for a higher fee. This can speed up funds availability.
• Extended overdraft fee - If an echeck deposit puts your account into overdraft, many banks charge extended overdraft fees in addition to the regular overdraft fee.
• Monthly service fee - Some banks charge a monthly service fee for business echeck accounts. This can range from $5 to $20 per month.