When I use ACH to move money between banks, do they keep my money for 3 days before crediting it to my account

Question

When I request the transfer, the money always disappears from one account three days before it shows up in the other. Since it's an electronic transaction, shouldn't it be immediate? Are they just sitting on my money, collecting interest for three days before giving it back to me and keeping the interest?

Answer 1

Basically, you are correct. Banks usually group ACH transactions and process them periodically in large batches. Many banks transfer funds from your account as soon as they set up the the transaction into a clearing account. They may indeed be getting interest on these funds before they send them to the clearinghouse. Some banks have changed their practices and now just charge your account on the day the transaction actually takes place without regard for the waiting period.