What is the difference between an automatic draft (for online bill payments) and ACH payments?
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What is the difference between an automatic draft (for online bill payments) and ACH payments?

Question by Genevie: What is the difference between an automatic draft (for online bill payments) and ACH payments?
I have recently set up a very basic savings account at my mothers credit union and yesterday when I called the credit union to ask if I could set up online payments to come out of this account, the teller told me that this account only accepts ACH payments. What does that mean?

Best answer:

Answer by Go with the flow
She might have meant ACH deposits only.
Like direct deposit from your employer.
All savings accounts I know do not allow debits to pay your bills.
For this, you would need a checking account.

*That’s the difference between a savings account and a checking.
If you could pay bills with a savings account, then there would be no difference between the two accounts.
They would both be called checking accounts.

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Comment (1)

  • Smokies Hiker - June 14, 2014

    Usually a “ACH” or Automatic Clearing House payment is only used by businesses with large amounts of money changing hands, or the government depositing money into your account. You would probably need to set up a checking account in addition to the savings account, so smaller amounts of money could be automatically deducted from the checking account for on line purchases. The nice thing about having both a checking and savings account at a banking institution, is the fact that you can keep the bulk of your money in the higher interest paying account ( usually the savings account ) and transfer it to the checking account when funds will be needed.