How Does a Bank Account Debit Work?

A debit to your bank account occurs when you use funds from the account to buy something or pay someone. When your bank account is debited, money is taken out of the account. The opposite of a debit is a credit, in which case money is added to your account.

Some examples of a debit are when you set up a direct debit and money is automatically taken out of your account to pay a bill, you write a check and it is cashed, or you use a debit card, which enables you to take money from your bank account and use it to purchase goods and services, like an electronic check. Learn more about the steps that take place when a bank account is debited.

How a Debit Card Works

The step in the process of using your debit card to make a purchase is that your bank is notified of the purchase electronically. This occurs instantaneously when you swipe your card or enter it on a website to make an online purchase.

Data is also sent to the card-processing network, Visa or Mastercard, for example, which verifies the transaction data and checks that the debit card hasn't been reported lost or stolen.

The processor also confirms that funds are available in the cardholder’s account and whether the transaction has been approved. The transmitted data includes the card number, transaction amount, and date. The data will also include the merchant’s name and merchant category code, or MCC, plus any rewards program information.

Because a transaction generally takes at least 24 hours to complete, the bank puts a hold on your account for the amount of the transaction. This action prevents you from using the money. Ideally, the hold lasts long enough to earmark the funds until the transaction is complete.

Next, the retailer from which you made your purchase sends the details of the transaction through the network to your bank. Your bank reviews the details and, if everything is verified, electronically transfers the purchase price to the retailer, effectively removing those funds from your account. Essentially, the bank debits the purchase price from your account.

How a Check Works

When you write a check, the payee deposits the check to their bank, which sends it to a clearing unit such as the Federal Reserve Bank. The clearing unit then debits your bank’s account and credits the payee’s account. Checks are deposited electronically using an app, or they are deposited by mail or in person.

How Automated Bill Payment Works

With automated debit transactions, you allow a creditor to deduct money from your checking or savings account on a regular basis. The payee has access to your bank account information and bank routing number, so it can execute the transaction. As such, there's a risk in giving another party that information.

Also, if you don't monitor your account, you could become overdrawn and rack up overdraft fees. Another option is to pay bills yourself through a bill payer. That way, you maintain control over what amounts are taken out and when.

The Bottom Line

A debit to your bank account happens when you use funds from the account for a payment. When your bank account is debited, money is taken out of the account. The opposite of a debit is a credit, when money is instead added to your account.

Debits can occur when you set up a direct debit order and money is automatically taken out of your account to pay a bill, when you write a check and it is cashed, or if you use a debit card, which lets money be taken from your bank account to pay for goods and services.

Several steps happen to complete a bank account debit. For instance, if you're using your debit card, your bank will be notified once you swipe the card and it will hold the amount of the transaction. Then your bank will send the transaction details and eventually payment to the merchant you're paying.