I thought they were one in the same. I guess I'm confused. Isn't direct deposit the same as a wire transfer?
No, actually the process for lay people seems the same but:
a) [FONT="]Direct deposit goes through the Automated Clearing House (ACH) system where as a
b) [/FONT][FONT="]Wire transfers are accomplished between U.S. banks using the Federal Reserve's Fedwire system.
It's kinda like the difference when , you use your debit card w/ the Visa logo. To you it's the same money coming from the same account but actually one transaction uses Visa's system (and can take a few days to settle) where the other uses an ATM network (like PLUS or Allpoint and the money actually deducts right then)
To the public, money moving is money moving but how the money transfers, very different hence different cost.
Bottom line, the bank wires deal with the Fed directly and are a more little secure and the money is moving in "real time" that's why they cost so damn much vs using the privately held ACH Clearing House[/FONT] which isn't "real-time". (That's why less than 5% of money moved is really a "Wire")
But the word "Direct" in the term direct deposit makes the public"feel" like it's a wire but it really isn't.
(Kinda like FINAL EXPENSE sounds better than "small life insurance policy w/ little to no underwriting" or Mortgage Protection sounds better than saying "30 year term and you figure it out"
Direct Deposit is more like writing a post dated "electronic check" whereas WT is a "right now" movement of verified secured funds.
Sorry, you asked and I'm thorough
(Worked @ State of Maryland Credit Union while @ UofMd)
