Buying Bitcoin with ACH – A Beginner’s Guide
Last updated: 4/21/19
ACH is one of the fastest and cheapest ways to transfer money inside the US. In this post I’ll cover the different exchanges that accept ACH transfers in order to buy Bitcoin.
ACH allows for faster and cheaper transfers than a wire transfer. There are 3 popular options for buying Bitcoins with ACH – eToro, Coinbase and Gemini. The fastest and cheapest option would be eToro, however you will not be able to withdraw you coins (only sell them back to USD).
That’s it! If you want a detailed review about the benefits of ACH and find out about other exchanges that accept it keep on reading. Here’s what I’ll cover:
ACH (Automated Clearing House) is an electronic funds-transfer system that is used for payments inside the U.S. The ACH is run by the National Automated Clearing House Association (NACHA). Recent rule changes are enabling most credit and debit transactions made through the ACH to clear on the same business day.
When you use a wire transfer it can take several days for it to show up on an exchange. Alternatively if you use an instant payment method like a credit card you usually end up paying a hefty amount in fees. ACH allows you the speed of credit transactions at the cost of a wire transfer.
eToro recently opened up their services to over 30 states around the US and are accepting ACH transfers. eToro is a trading platform that allows users to easily start buying and selling Bitcoins. The main difference between eToro and other exchanges is that deposits and withdrawals can be done with USD only.
In other words, you can’t withdraw the Bitcoins you buy, only speculate on their price and sell them for USD. There are no deposit fees for ACH transfers with eToro. You can read my eToro review for a complete overview of what eToro offers (including which countries it supports)
Established in 2012 Coinbase is one of the oldest exchanges around. Coinbase is a brokerage service which is more suitable for beginners but it also has a trading platform called Coinbase Pro for more experienced traders.
ACH transfers are completely free of deposit fees (unlike wire transfers). The transfer typically takes 3-5 business days (which may be as many as 7-10 calendar days, depending on the timing of weekends and other bank holidays) to complete after initiating a purchase.
You may see the funds immediately debited from your bank account when you initiate the transfer, but the funds will not be transferred to your wallet until your payment has finished moving between the banks and clears in Coinbase’s bank account.
The main bottleneck is how much time it takes your bank account to approve the transaction as can be seen below:
If you want a detailed review about each service you can read my Coinbase review which includes information about both the brokerage service and trading platform.
Established in 2015 by Tyler and Cameron Winklevoss Gemini is one of the leading exchanges for buying Bitcoins in the US.
ACH transfers are completely free of deposit fees on Gemini. The Transfers (ACH) typically clear in 4-5 business days. This is the time it takes for your bank to confirm the funds are available to transfer. Although your bank balance may show your funds have left sooner, it typically takes at least 4-5 business days for a bank to communicate this to Gemini.
If you want a detailed review about Gemini’s trading platform you can read my Gemini review.
While at the moment the range of options for buying Bitcoin with ACH is a bit limited I’m sure that as more exchanges expand into the US they will also support ACH transfers.
For now, the exchanges listed above should give you a good enough solution as all of them are reputable and well established exchanges.
If you know about additional exchanges that accept ACH transfers or have had some personal experience with ACH transfers yourself I’d love to hear about it in the comment section below.
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