How do banks make online funds transfers?

Banks use the Automated Clearing House, or ACH, to transfer funds. It’s the same system the Federal Reserve uses, and if you have direct deposit at work that’s how your employer pays you.

As an online bank, we send your request for an online funds transfer immediately to ACH. ACH usually reports your transfer request to your external account bank the same day we send it. But most banks process ACH transfers during a particular window of time each day. If your request arrives after your external account bank has closed its window for the day, your bank won’t begin processing your request until the following day. That’s why an online funds transfer typically takes three business days. If you make your request on or near a weekend or holiday, however, it can take up to five days.