On-us items may have quicker processing times than off-us items because the bank or credit union performs both sides of the transaction—the drawing and the depositing. The financial institution doesn’t have to go through an interbank system (also called an “off-us” transaction).
Alternate name: On-us transaction, on-us check, in-house on-us payment
For example, imagine that two sisters, Sarah and Hillary, both use the same financial institution. When Sarah writes Hillary a check and Hillary deposits it into her account, that institution completes the transaction as an on-us item. Because this money is still held at the financial institution, it doesn’t need to go through an outside network to deposit the funds into Hillary’s account. But if Hillary used a different financial institution than Sarah, the financial institution would have to use a clearing network to complete the transaction—making it an “off-us” item.
How an On-Us Item Works
On-us items offer benefits to customers and institutions alike. Since banks can’t hold on-us items longer than one business day, customers get quicker access to funds. Institutions save money by not using an outside network to process the transaction. For instance, let’s say you bank with Chase, and you make a purchase at a local store that also uses Chase to process its terminal payments. Because the issuing bank and acquiring bank are the same, Chase can process this as an on-us item. It doesn’t need to pass through another credit card network, such as Mastercard or Visa. Think about what happens when you withdraw money from a bank-owned ATM. That bank can instantly see that you have the money; therefore, it processes your withdrawal as an on-us item and doesn’t charge you for using the ATM. On the flip side, if you were to withdraw cash from an international or non-network ATM, it would be processed as an off-us item and you would likely be charged associated fees.
On-Us vs. Off-Us Items
On-us items are drawn and deposited internally, without ever having to leave the bank’s system. The money simply moves from one account to another. Off-us items, on the other hand, must be sent to another institution using an external banking system.
