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Comment by zheng | Hacker News Reader

Tangent to the article, but what I really want is a bank that allows me to do funds transfers immediately. I understand they make a lot of money off of the floating period, but there's got to be a way to place some other kind of restriction on me so that I can transfer funds quickly. Or, just find a bank that offers both a checking account and a high interest rate...

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FWIW, USAA does fund transfer immediately, at least perceptively. When I transfer from a BoA account to USAA, funds are available within 10 minutes (close enough to "immediate" for me).

USAA also does interest on checking accounts, debit-card-as-credit points, and ATM fee kickbacks.

I use USAA for my general banking, but their savings interest rates just aren't competitive. I've had smaller transfers go that quickly, but larger ones still seem to take a couple days.

I've noticed that while funds show as arrived/available in USAA, the originating account stills shows the funds available as well. This tells me it might be a convenience offered by USAA, even if the transaction hasn't processed yet. This is similar to cashing a check that the bank hasn't collected from yet. They take your good standing with them into account, and give you the money.

That's what they do with deposit@home. I don't think USAA cashes the checks immediately when you cash your checks online. That's why they require you to have a line of credit with them. When you cash a check they give you an interest free loan for the amount of the check. When the check clears the loan is paid off. And if the check doesn't clear they have the ability to take the money out of the account, or they actually give you a loan to cover the check if you have drained your acccounts.

I use deposit@home and have no formal line of credit with USAA. It may be something they're doing internally, but my only products with them are debit accounts. (My credit and insurance is done elsewhere due to non-competitive rates charged by USAA).

Yeah, I think its done internally, but according to the requirements you need to have either an active property insurance or an active line of credit, and you need to be qualified for both. So I don't know what's going on there. But I have noticed some of the bank's rates are not competitive. https://www.usaa.com/inet/pages/bank_deposit

You basically have to be P&C eligible to use deposit @ mobile / home. To be P&C eligible you need to be military or spouse / child of military.

Delays in fund transfers are due to ACH network rules and processes, not float.

Some institutions only process ACH files once or twice a day.

I've waited > 1wk before for middle-sized transfers. What network rules are there? I wasn't aware of anything other than float causing delays in inter-bank transfers.

Banks generally delay ACH transactions longer if the respective clearing houses are in different federal reserve districts. When I worked with them, 7 business days was the max.

In my opinion, 7 business days is excessive, even in the mainframe/batch world of banking.

Why does it take 7 business days? Even if they run a batch process once per day, then shouldn't it take a max of two days, one day to export and one to import?

There are two answers as far as I know.

1. The sending bank can reverse an ACH (electronic transfer) within a certain period of time due to fraud, death of the recipient, etc. (Up to 90 days in some cases.) By holding up the money, a bank protects itself from losing money on a reversal. If anything seems fishy, the receiving bank might hold the money for a few days.

2. The bank can get a little more float. Back when WAMU was going down, they started taking a week or more to clear large ACH's and deposits.

Most banks don't hold innocent-seeming transfers for more than a day. The larger than usual transfers are the ones that often are delayed.

I currently work at an all student run credit union that has the same rules as any other bank in regards to ACH transactions so I think I can clarify some points here. Institutions are allowed up to 5 business days to accept or reject an ACH based debit or credit if it is between non-local banks. However, business days are really the days in which the Fed are open. So there are days when you could potentially have to wait up to 8 days for a transfer to be completed (ie 5 business days + weekend + holiday). If it is between local banks which is defined as being in the same Fed region, the rule is 3 business days.

These rules are very outdated and need to be updated. I think this is one of the most hindering rules in the current financial system. Back in the day, I could see the need for there to be different time allotments between local and non-local transactions, but today it is pretty much instantaneous. However, I don't see these regulations being changed in the near future and the reason is very simple. Big banks have more time to use this "float" money to make money, as well as to secure the money via overnight loans if they are short. Thankfully, most banks process ACH twice daily (morning and night), but not all. And some even delay transactions on purpose. Also if anyone is curious how much money it really costs a bank or credit union to do a ACH transfer, it is $0.000133 per transaction. So when your institution charges you $5 or $15 or even $25 to do a incoming or outgoing transfer, they are literally making bank.

In the UK, pretty much all of our banks have this now, so it is technically feasible (it's almost instant between banks participating in the scheme).

I'll get downvoted for this, but Bitcoin transfers are immediate. There are so many things wrong with the current financial system that the best solution is a new system altogether.

They're not immediate. They need to be validated by the network, and that takes time.

Compared to ACH, they are pretty fast (hours in the worst case). If you pay a small fee, like 0.01BTC, they are pretty much immediate.

Comparatively sure, but can that scale? The transactions can happen quickly know, but if the volume was comparable to ACH volume, could it keep up?

It depends on how many transactions are there compared to how many people mining. The people who mine are the ones who spread the transactions across the network. The mining computing power is increasing way faster than the people using bitcoins.

Paying 20 cents for a faster transaction (assuming a value of around $20/BTC) isn't really a small fee, that's in the ballpark of what credit card gateways charge.

Or a case of iteration and improvement. As mentioned in a previous comment - most UK banks participate in a scheme which allows instant transfer between accounts.

Here's the other thing about UK banking for consumers. It is free - and most ATMs are part of a 'Link' scheme which means that you can use any ATM from any bank with any bank card and get out cash without being charged a fee.

Oh, and of course I forgot the other great thing about UK and Europe - Chip & Pin. Instead of signing for every transaction in a restaurant etc - the server brings a device to your table where you then have to enter your pin number - it drastically cuts down on fraud - your card never leaves your sight and you need a PIN rather than a signature which no one ever checks or cares about.

Not so much a new system, just a better one - which many places already have

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