When setting up a bank account for ACH utility payments, is it better to use a ZBA or a funded account?

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There are a few considerations. If your utility is debiting your account, then you might want to consider a funded account, which provides more control than a ZBA. You can still use a ZBA but should put limits in place on ACH debits to the account. If, on the other hand, you are issuing an ACH file to your bank to draft your account to make the payment (ACH credit), then you have a measure of control there that’s lacking when the utility debits your account, so you may elect to use a ZBA.

Choosing to use a ZBA account or a funded account will depend on how comfortable you are with your controls over the disbursements. The ZBA is certainly easier since it does not require your daily intervention to move the funds from one account to this account to clear the payments. However, the ZBA is more efficient where it's clearing only checks presented without you having to move the money and the balance is always $0 at the end of the day.

So if you have good controls over what is going out of your account then the ZBA may prove more efficient. You also want to check with your bank on the cost difference to see if it still makes sense for your business. It sometimes depends on the volume of checks/payments clearing the account.

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