Grant Funds

ACH vs Checks vs Grant Payment Systems: Which is Best to Distribute Grant Funds?

When debating between ACH vs checks and ACH vs grant payment systems, it's important to weigh the pros and cons of each before making a final decision.

There are a variety of payment options available for those distributing grant funds, but which is the most secure and transparent option? When debating between ACH vs checks and ACH vs grant payment systems, it's important to weigh the pros and cons of each before making a final decision. Our goal with this post is to help you make a more educated choice.

ACH vs Checks - What’s the Difference?

The acronym ACH stands for automated clearing house, and it is an electronic network that allows financial institutions to send and receive payments. This method is often used for direct deposit of payroll or tax refunds. One advantage of using ACH is that it's a very efficient way to move money around.

Are ACH payments safe?

For the most part, ACH payments are considered one of the safest ways to send and receive money. The ACH network is a secure, reliable system that processes billions of dollars in payments every year. Because ACH payments are processed through the Federal Reserve system, they are subject to rigorous security checks and protocols. And because they are automated, they are typically faster and more cost-effective than traditional wire transfers.


Again though, that’s not to say it’s infallible. There are also some drawbacks. For example, ACH can be vulnerable to fraud and there have been instances of ACH payments being reversed without warning which can negatively impact both parties involved. It’s also worth noting that with the amount of phishing and malware attacks that have increased in recent years, there’s no guarantee your funds won’t be intercepted. Of course, the saving grace is that most of these funds are federally insured to a certain degree so you might not lose all of the funds. Again though, that’s not to say you won’t incur a headache or two if someone does intercept the money along the way.

Should you opt for paying grant payments with checks instead?

Checks are the traditional way of paying someone, and they're still in use today for a variety of reasons. They're easy to use and understand, and they're accepted just about everywhere. Essentially the way they work is a paying party writes or prints a paper check, and then signs it authorizing a financial institution to remove the funds from the account noted on the check and give it to the party that is cashing the check - i.e. the receiver of said funds.

The problem with checks is that they can be lost or stolen, and they're not always the most secure option. In the worst cases, a check can be used to not only intercept the funds intended to the designated “payee,” but they can also be used to decipher banking details and/or create duplicate checks to steal even more money.

ACH vs. Checks - Which is the best choice?

When it comes to ACH vs checks, opting to pay via ACH has generally been considered the “safer” way to transfer funds. Regardless of which of the two you choose though, there are some steps you can take to protect your program from the risks we’ve mentioned. For example, never write a check or authorize an ACH transfer for more than you have in your account at any given time. It’s also a good idea to keep track of your checks/ACH transfers so you can quickly spot any fraudulent activity. By taking some simple precautions, you can help keep your grant program and its finances safe when making grant payments.

Grant Payment Systems Are Better Than Only ACH or Checks

Grant payment systems offer your grant program a third option. Grant payment systems are designed specifically for distributing grant funds. These systems typically offer a higher level of visibility than other methods, and if you’re using good software they don’t have to be more complicated to use. Grant payment systems can also be very helpful in tracking where funds have been distributed and how they've been used.

So, which is the best option for distributing grant funds? It really depends on your specific needs and preferences.

Checks vs grant payment systems: Using a grant payment system such as SendGrant will be much easier to track than a check, and you can continue keeping an eye on the payment even after the money clears. It’s faster and more secure than mailing a check as well.


Only ACH vs grant payment systems: Grant payment systems utilize the principles of an ACH payment, but with more tracking capabilities. They are also more secure than ACH payments thanks to additional security protocols added in transit of your funds.  Additionally, grant payment systems such as SendGrant transmit your grant guidelines and automatically provide notifications of transfer status to all interested parties, such as the grant manager, finance manager, and receiving institution and/or individual.

Of all the options presented here today, grant payment systems are your best choice for the most secure and transparent way to distribute your grant funds. Learn more about what SendGrant can do for your grant program by visiting a Grants Payment Management System

About the author

Sign up now for SendGrant updates!

Get the latest SendGrant Information