Understanding your bill paying options during the pandemic

United States Postal Service data shows that the performance rate for delivering first class mail on time has fallen by more than 20% in the last year.  Their reasoning for the decrease in performance is the unprecedented volume increases and limited employee availability due to COVID-19.  With the current delays in our postal service, more and more Americans are paying the majority of their bills electronically.

The newer forms of payment such as bill pay and ACH transfers are faster and more convenient ways to pay bills. They are also safer!  Sending checks through the mail is risky because they have your account number and routing number, as well as your full name and home address.  With so many safer and more convenient forms of payment available, it is time to put away the checkbooks and start using an electronic form of payment.  Let’s take a look at two options, bill pay and ACH payments.  Both are convenient and will help to possibly avoid the late payments that are occurring due to delays in the postal service.

What is bill pay?

Bill pay is a service offered by many banks that allows you to manage your bill paying all in one place.  You can make individual or recurring payments electronically.

How it works is simple.  Log into your online bank account and look for its online bill pay feature.  At Jarrettsville Federal it is referred to as ‘Move Money’.  You will initially have to set up your payees/providers, including account number, billing address, etc.  Then each time you log in to make payments, you just select the provider you wish to pay.  You will also need to authorize the bank to send your payments for you after reviewing your entries.  You can delete payees or add new ones at any time.  Once you are familiar with it you will be surprised how quickly it makes paying your bills!

One of the important choices you will need to make when using bill pay is whether you want  your bills paid automatically on a regular re-occurring basis, or if you prefer to use the service for one-time payments as needed.  Some people prefer to pay each bill individually each time in order to keep a better handle on the money that is going in and out of their account.  This is also a good option if the amount you owe changes each time.

Bill Pay is electronic, but unfortunately, sometimes a check is sent and it isn’t up to the customer to choose.  It depends on the recipient and how they receive payments.  With the delays in the postal service, this can lead to possible late charges and fees.  Often times there is Expedited Check Option or an Overnight Bill Pay Check Option, both of which will come at a cost.  Please keep in mind that if you overdraw your account using bill pay, there will likely be a non-sufficient funds fee. As with a regular checking account, you also have the ability to stop payment on a bill pay, that will have a fee associated with it as well.

What are ACH payments?

Automated Clearing House (ACH) payments are electronic payments that pull funds directly from your checking account.  The money automatically moves from your bank account, avoiding the need to write a check or initiate a credit card transaction.  ACH is the largest payment network in the United States.

In order to pay with ACH, the biller must be authorized to pull funds from your account.  You will provide your bank account and routing number for your checking account and provide authorization.   The payments can be set up as automatic payments or on-demand payments.  If automatic recurring payments are chosen, your biller will pull money from your account every time your bill is due.  On-demand payments are made only when you specifically allow it.

There are many advantages to using ACH debit.  There is no need to remember to make payments using this method.  There is also no need to write checks or pay postage.  This also eliminates the frustration of waiting for the postal service to deliver payments on time or losing the mail altogether.  This method can help you save time as well as to make sure your payments are made on time, avoiding late fees.

Most banks offer free ACH transfers.  However, most do not allow for these transfers to accounts outside of the United States.  There are often limits to the amount that can transfer on a monthly and daily basis.  Be sure to check with your bank so that you are sure to stay within these limits.

So, in summary, thanks to technology, paying bills is faster and more convenient than ever.  As with all online banking, it is important to be cautious and diligent in avoiding financial scams.   Online bill paying does require customers to go online once receiving the bill to enter the bill amounts and authorize payments.  Direct payment with ACH transfers are automatic once they have been initially set up.  Bill pay sometimes requires the mailing of a check, which requires additional time and may also get caught up in postal delays of recent. Then a late payment may still occur.  ACH transfers avoid this problem and have also proven to be less susceptible to fraud than credit cards and checks, which make them a smarter option when working to minimize your exposure to risk.

Jarrettsville Federal offers checking, savings and loan products that meet our customers’ needs, technology that brings us into the future, and community service that gives back to not only our customers, but the local area in general.  Contact us at 410 -692- 5151 or visit our website at https://www.jarrettsvillefederal.com/.