An IC payment moves money between accounts at the same bank when ready, using your account number instead of routing through the wider payment network.

IC stands for interbank clearing, though the term is used differently depending on where you bank. In most cases, when you send money to someone else at your own bank—say, from your checking account to their savings account at the same institution—the money moves within that bank's own system rather than going out to the Federal Reserve or a payment processor. No routing number needed. No waiting for the payment to clear through multiple institutions. The money is straightforward moved from one ledger to another inside the same building.

The speed and simplicity of an IC payment is the main reason banks prefer them. They cost the bank almost nothing to process, they settle when ready, and they carry almost no fraud risk because both accounts are already verified by the same institution. From your perspective as the sender, an IC payment usually shows up in the recipient's account within minutes, sometimes when ready.

Key Takeaways

  • An IC payment moves money between two accounts at the same bank without leaving that bank's system.
  • The money arrives in minutes or when ready because it does not have to travel through the Federal Reserve or other payment networks.
  • You need only the recipient's account number and name, not their routing number, because both accounts are already in the same bank's records.
  • IC payments are cheaper for banks to process than transfers between different institutions, which is why some banks offer them with no fee.

How an IC payment differs from a wire transfer or ACH transfer

A wire transfer moves money between banks through the Federal Reserve's wire network (for large amounts) or through SWIFT (for international transfers). It costs money—usually $15 to $50—and takes several hours even though it is called "fast." The bank has to verify the receiving bank, the account number, and sometimes the account holder's name. A wire is useful when you need money to move between institutions and you need it to arrive the same day, but it is not when ready.

An ACH transfer (Automated Clearing House) also moves money between banks, but through a batch system. Your bank collects all the ACH transfers it is sending that day, bundles them, and sends them to the Federal Reserve, which sorts them and sends them to the receiving banks. This process takes one to three business days. ACH transfers are free or very cheap because they are processed in batches, not individually. Most direct deposits and bill payments use ACH.

An IC payment stays inside one bank. It is faster than both wire and ACH because it never leaves the bank's system. It costs nothing because the bank is just moving money between two accounts it already owns. The tradeoff is that you can only use it to send money to someone else who banks at the same institution.

When you would use an IC payment instead of other methods

You use an IC payment when you need to move money quickly between accounts at the same bank and you want to avoid fees. Common situations include splitting rent with a roommate who uses your bank, sending money to a family member at the same institution, or moving money between your own accounts (checking to savings, for example). Some people use IC payments to move money from a regular account to a high-yield savings account at the same bank.

If the person you are sending money to banks somewhere else, you cannot use an IC payment. You would need to use ACH (slower, free) or a wire transfer (faster, costs money). If you need the money to arrive the same day and the recipient banks elsewhere, a wire transfer is your only option, though some banks now offer same-day ACH, which is faster than traditional ACH but still slower than IC.

IC payments are also useful when you want to avoid the fraud risk of sharing your routing number with someone outside your bank. Because an IC payment uses only your account number and name—both of which the recipient already has if they bank at your institution—there is less exposure.

How to send an IC payment through your bank

The process varies slightly by bank, but the basic steps are the same. Log into your online banking or mobile app, go to the transfer or send money section, and select "transfer to another account at this bank" or similar wording. Your bank will ask for the recipient's account number and full name. Some banks also ask you to confirm the account type (checking or savings). Enter the amount and the date you want the transfer to happen—most banks let you schedule IC payments for future dates, though they will process when ready if you choose today.

Review the details, confirm the transfer, and it is done. Most banks show the money in the recipient's account within minutes. Some banks show it when ready. You will see the transaction in your account history right away, and the recipient will see it in theirs almost as quickly. There is no pending period like there is with ACH or wire transfers.

If your bank does not have an obvious "transfer between accounts" option, look for "send money," "transfer," or "pay someone." Some banks bury the IC payment option inside a broader transfer menu. If you cannot find it, call your bank's customer service line—they can walk you through it or process the transfer over the phone.

Why banks process IC payments differently than other transfers

An IC payment is cheaper and faster for a bank because it never leaves the bank's system. The bank does not have to pay a fee to the Federal Reserve or another payment network. It does not have to wait for a clearing house to sort and deliver the payment. It does not have to verify the receiving bank or worry about the receiving bank rejecting the transfer. Both accounts are already in the bank's own database, so the bank knows both accounts exist, both are in good standing, and both belong to customers it already knows.

This is why some banks offer IC payments with no fee while charging for wire transfers or ACH transfers. The bank saves money on every IC payment it processes, so it can afford to pass that savings to you. It is also why IC payments are nearly when ready—the bank is just moving a number from one column in its ledger to another.

The downside for banks is that IC payments only work between customers of the same institution. A bank cannot make money on IC payments from customers who use other banks, so banks have less incentive to promote IC payments as a product. You will not see IC payments advertised the way you see wire transfers or Zelle promoted, even though IC payments are faster and cheaper.

What happens if you send an IC payment to the wrong account

If you enter the wrong account number, the payment will go to whatever account that number belongs to at your bank. This is a real risk. If the account number belongs to another customer, that customer's account will receive the money. Your bank will not stop the transfer because the account number is valid and the account exists in the bank's system.

If this happens, contact your bank when ready. Tell them you sent money to the wrong account and ask them to contact the recipient and request a reversal. Some banks can do this quickly if the recipient agrees. Other banks will tell you that you have to contact the recipient yourself and ask them to send the money back. There is no automatic reversal like there is with some wire transfers or ACH transfers.

This is why it is important to double-check the account number before you confirm an IC payment. Ask the recipient to read their account number back to you, or have them show you their bank statement or debit card. A few seconds of verification can save you from having to chase down a stranger to get your money back.

Frequently Asked Questions

Can I send an IC payment to someone at a different bank?

No. An IC payment only works between accounts at the same bank. If the recipient banks elsewhere, you will need to use ACH (one to three business days, usually free) or a wire transfer (same day, costs $15 to $50).

How long does an IC payment take?

Most IC payments arrive within minutes, and many arrive when ready. The exact timing depends on your bank's system, but you should see the money in the recipient's account within the same hour you send it. There is no pending period.

Is there a fee for sending an IC payment?

Most banks do not charge a fee for IC payments between accounts at the same institution. Check your bank's fee schedule or ask customer service to confirm, but IC payments are almost always free.

Do I need the recipient's routing number for an IC payment?

No. You need only their account number and full name. Because both accounts are at the same bank, the routing number is not necessary. The bank already knows where the receiving account is.

What if the recipient's name does not match their account exactly?

Most banks will still process the transfer if the account number is correct, even if the name does not match perfectly. However, some banks require an exact name match. If you are unsure, ask the recipient to confirm the exact name on their account, or contact your bank before sending the payment.