Investor's wiki

Automatic Transfer Service (ATS)

Automatic Transfer Service (ATS)

What Is an Automatic Transfer Service (ATS)?

An automatic transfer service (ATS) is a banking service, in both a generic and specific sense, offered to customers. On a general level, it can imply any automatic transfer of funds among customer accounts. For instance, bankers many utilize an ATS during a momentary transfer from a checking account to pay off a bank loan, as well as a month to month transfer from a checking account to a savings account.

All the more specifically, an automatic transfer service depicts the overdraft protection that a bank gives when it transfers funds from a customer's savings account to their checking account, on occasion when insufficient funds exist to cover unpaid checks or potentially keep a base balance.

Normally, a bank will transfer the specific amount of funds required to cover unpaid checks. Customers may in this manner stay away from any overdraft fees, alongside the issue associated with returned checks. Generally, a customer should proactively request to turn on overdraft protection on their account to ensure no fees are charged.

How Automatic Transfer Services (ATS) Work

Savings and loans and mutual savings banks first presented ATS accounts during the 1970s to rival traditional commercial banks. As per the U.S. Federal Reserve (the Fed), ATS offerings count toward the country's money supply (the full stock of currency and other liquid instruments, circulating in the U.S. economy at a given time). The M1 metric for money supply additionally incorporates explorers' checks, demand deposits, and other checkable deposits, for example, negotiable order of withdrawal (NOW) accounts and credit union share drafts.

Given the low rates of interest that checking accounts pay, these arrangements are the standard instead of the exception. This is especially the case with checking accounts at brokerage firms. Generally, individuals and sole owners are eligible for automatic transfer accounts, while organizations, units of government, and different elements are not eligible.

Extra Features of Checking Accounts

Numerous traditional financial institutions offer checking accounts, allowing customer withdrawals and deposits. Checking accounts contrast from savings accounts in that checking accounts generally offer unlimited withdrawals and deposits, while savings accounts limit these. Checking accounts can be available to commercial or business accounts, student accounts, and joint accounts, alongside numerous different types of accounts that offer comparable highlights.

Checking accounts are very liquid. Customers can access their accounts, utilizing checks, automated teller machines (ATMs), and electronic debits, among different methods. In exchange for this liquidity, checking accounts for the most part won't offer an exorbitant interest rate; nonetheless, in the event that a chartered banking institution holds this account, the Federal Deposit Insurance Corporation (FDIC) can guarantee funds by up to $250,000 per individual depositor, per insured bank.


  • Most normally, an auto-transfer service alludes to the overdraft protection service offered by most banks, in which funds are transferred starting with one customer's account then onto the next, (for example, from a savings account to a checking account) to stay away from fees on occasion when there are deficient funds.
  • Generally, individuals and sole owners are eligible for automatic transfer accounts, while organizations, units of government, and different substances are not eligible.
  • An automatic transfer service (ATS) alludes to the banking service that automatically transfers funds between an individuals' different accounts, for example, to pay off a charge.