Finality Of Payment

Filed Under »
Dictionary Says

Definition of 'Finality Of Payment'

Refers to the instant that a payment to another party is completed, at which point the receiving institution has irrevocable access to the money. This is more commonly referred to as the moment when funds are "good" in an account.

The concept and definition are especially important in an environment where one or more banking institutions could cease operations at any given moment. By having a strict operational definition of the finality of payment, a receiving institution does not have to worry about recently received funds disappearing from its account because the transferring institution suddenly became insolvent.
Investopedia Says

Investopedia explains 'Finality Of Payment'

With the rise of online bill payment services, many consumers have gotten a practical lesson in the finality of payment. Since many online banking and bill payment services use the Automatic Clearing House (ACH) system to process payments, which doesn't result in an immediate transfer, many companies do not consider a bill paid until after they're assured of the finality of payment. Of course, that has taught many people the painful lesson that initiating an automatic bill payment on the due date usually results in a late payment.

Articles Of Interest

  1.

    Get To Know The Major Central Banks

    The policies of these banks affect the currency market like nothing else. See what makes them tick.

  2. Inside National Payment Systems

    The global interconnection of U.S. payment systems makes commerical and financial transfers possible.

  3. Demystification Of Bank Accounts

    Find out which type of account suits your specific needs.

  4. The Federal Reserve

    Few organizations can move the market like the Federal Reserve. As an investor, it's important to understand exactly what the Fed does and how it influences the economy.

  5. How New Offshore Bank Rules Will Affect Americans

    FATCA is being implemented in 2013. Here is how it will affect the personal banking and taxes of Americans who hold offshore bank accounts.

  6. 6 Biggest Millionaire Flops

    If you have lost money, you're not alone, but at least you can put some blame on the market.

  7. If two people own a securities account, listed as joint tenants-in-common, it means:

    A. They each have an undivided interest in the propertyB. If one dies, that person's interest does not automatically pass to the otherC. They do not necessarily have equal interests ...
comments powered by Disqus
Marketplace
Hot Definitions

  1. Yield Elbow

    The point on the yield curve indicating the year in which the economy's highest interest rates occur. The yield elbow is the peak of the yield curve, signifying where the highest interest rates occurred.

  2. Xenocurrency

    A currency that trades in markets outside of its domestic borders.

  3. Wanton Disregard

    A standard of severe negligence. Wanton disregard is a very serious accusation that indicates that a person behaved extremely recklessly.

  4. Ultra ETF

    A class of exchange-traded funds (ETF) that employs leverage in an effort to achieve double the return of a set benchmark.

  5. Toehold Purchase

    A purchase of less than 5% of a target company's outstanding stockmade by an acquiring company. A toehold purchase of just under 5%, while not a significant stake in a firm, allows the shareholders a "toe-holds" grip on the company and its decision making.

  6. Samurai Bond

    A yen-denominated bond issued in Tokyo by a non-Japanese company and subject to Japanese regulations.
Trading Center
http://sp.fastclick.net/ad/tr/10858-64082-15546-0?mpt=aa6fba12dd7f4edf5a2f406c1a3070f7