What automatic payment means and how to start one
An automatic payment is an instruction you give to your bank or biller to move money on a schedule you set—usually monthly, but it can be weekly, quarterly, or any interval that matches your bill. Once it is set up, the money leaves your account on the date you choose without you having to log in or write a check each time.
You have two ways to set this up. You can authorize the biller directly (your electric company, mortgage lender, insurance company) to pull money from your account on a set date. Or you can tell your bank to push money out to the biller on a set date. Both work; the difference is who initiates the transfer each time.
Most people set up automatic payments through their biller's website or by phone, because that takes one call instead of two. But if your biller does not offer it, or if you want to control the timing from your bank's side, you can set it up in your bank's bill pay system instead.
Key Takeaways
- You can set up automatic payments directly with your biller (they pull the money) or through your bank (your bank pushes the money), and both methods protect you the same way.
- You will need your account number with the biller, your bank routing number, and your account number at your bank—have these ready before you start.
- The first automatic payment usually takes 3 to 5 business days to process, so set it up at least a week before your bill is due the first time.
- You can change the amount, pause, or cancel an automatic payment at any time through the same place you set it up, and you should do this before the payment date if you want to stop it.
- If a payment goes out by mistake or your account does not have enough money, contact your bank or biller within 60 days to dispute it and recover the funds.
Setting up automatic payments through your biller
Log into your account on the biller's website or call their customer service number. Look for a link or menu option that says "Auto Pay," "Automatic Payment," "Recurring Payment," or "Paperless Billing." Some billers combine it with paperless billing; others keep it separate.
You will be asked for your bank account information: your routing number (a nine-digit code that identifies your bank), your account number, and the account type (checking or savings). Your bank statement has both numbers, or you can call your bank to ask. Do not use a debit card number instead—automatic payments require a bank account, not a card.
Choose the payment date. Most billers let you pick any day of the month. If you choose a date after your bill is due, you will pay late and may face a fee or interest charge, so pick a date before the due date. If you get paid on the 15th and the 30th, pick a date shortly after one of those so the money is in your account.
Decide whether you want to pay the full statement balance each month, a fixed amount, or the minimum payment. If you choose a fixed amount and your bill changes (your electric bill in winter, for example), you will underpay some months and overpay others. Full balance is safest for most bills. For credit cards, paying the full balance avoids interest.
Setting up automatic payments through your bank
Log into your bank's website or app and find the bill pay section. This is usually under "Payments," "Transfer Money," or "Pay Bills." Click the option to add a new payee or set up a new payment.
Enter the biller's name and mailing address. Your bank needs to know where to send the money. If the biller is a large company (utility, mortgage servicer, credit card company), your bank may have it in a dropdown list, which is faster and more accurate.
Enter the amount and the date you want the payment to go out. Your bank will send it a few days before that date so it arrives on time. If you want the payment to arrive by the 15th, schedule it for the 12th or 13th.
Set it to repeat monthly (or weekly, quarterly, whatever your bill cycle is). Your bank will keep sending the payment on that schedule until you stop it. You can change the amount or date any time by going back into bill pay and editing the payment.
Timing: when your first payment will leave your account
If you set up automatic payment through your biller, the first payment usually takes 3 to 5 business days to process. This is because it uses the ACH network (Automated Clearing House), which batches transfers and clears them in overnight cycles. Set it up at least a week before your bill is due the first time.
If you set it up through your bank's bill pay system, timing depends on your bank. Some banks send the payment the same day you schedule it; others wait until the next business day. Check your bank's bill pay page or call to ask how long it takes for a payment to reach the biller.
Mark your calendar for the first payment date. Log into your bank account the day after it should have gone out and confirm it left. If it did not, contact your bank or biller right away. Do not wait until you get a late notice.
What information you need before you start
Gather these details before you log in to set up the payment. Having them ready takes 10 minutes instead of 30.
| Information | Where to find it |
|---|---|
| Your account number with the biller | Your bill, or log into the biller's website |
| Biller's mailing address | Your bill, or the biller's website |
| Your bank's routing number | Your bank statement, or call your bank |
| Your bank account number | Your bank statement, or log into your bank |
| The amount you want to pay | Your bill, or decide on a fixed amount |
| The date you want to pay | Your bill's due date, minus a few days |
Changing, pausing, or stopping an automatic payment
You can change the amount or date any time. Log back into the same place where you set it up (your biller's website or your bank's bill pay system) and edit the payment. The change takes effect on the next scheduled payment date, unless you are editing it less than 3 business days before that date—in that case, it takes effect the payment after next.
If you want to stop a payment, cancel it at least 3 business days before it is scheduled to go out. If you cancel it the day before, it may still process. If it does, contact your bank or biller within 60 days to dispute it and get your money back.
If you want to pause payments temporarily (for example, if you are paying off a loan early and do not want to make the next scheduled payment), cancel the automatic payment and set up a new one when you are ready. Do not just let it sit—if you forget to restart it, you may miss a payment and damage your credit.
What happens if there is not enough money in your account
If your bank does not have enough money to cover the automatic payment on the scheduled date, the payment will be rejected. Your bank may charge you an overdraft fee (usually $25 to $35), and the biller will not receive the money.
You will likely get a notice from your biller saying the payment failed. You then have to pay it manually—by phone, online, or in person—to avoid a late fee or service interruption. Some billers will try the payment again a few days later; others will not.
To avoid this, check your account balance a day or two before the automatic payment is scheduled. If you know it will be tight, move money into your checking account early, or contact your biller to change the payment date to a few days later in the month.
Fraud protection and security when setting up automatic payments
Automatic payments made through the ACH network (which includes both biller-initiated and bank-initiated payments) are protected by federal law. If someone sets up an unauthorized automatic payment using your account information, you can dispute it within 60 days and get your money back. Your bank or biller will investigate and reverse the charge if you are right.
To keep your account safe, never give your bank account number to someone who calls you claiming to be from a biller. Legitimate billers do not call asking for this information. If a biller needs your account details, go to their official website or call the number on your bill, not a number someone gave you.
Use a strong password on your bank and biller accounts. Enable two-factor authentication if it is available. This means you have to enter a code sent to your phone or email before you can log in, which stops someone from accessing your account even if they have your password.
Frequently Asked Questions
Can I set up automatic payments for bills that change every month?
Yes, but you have to choose between paying a fixed amount or paying the full balance. If you pay a fixed amount and the bill is higher, you will underpay and carry a balance. If you pay the full balance, your bank will send whatever amount the biller tells it to send. For utilities and credit cards, full balance is usually the better choice.
What if I need to stop an automatic payment right now?
Contact your bank or biller immediately by phone. Tell them you want to cancel the automatic payment and ask them to confirm it is stopped. If the payment has already been processed, you can dispute it within 60 days and get your money back. Do not wait for a bill or notice—call today.
Do automatic payments hurt my credit score?
No. Automatic payments do not hurt your credit. In fact, they help it because they make it nearly impossible to miss a payment. On-time payment history is the biggest factor in your credit score, so setting up automatic payments for loans and credit cards is one of the fastest ways to build credit.
Can I set up automatic payments for taxes or government bills?
Yes. The IRS lets you set up automatic payments for federal income taxes through their website or through a tax professional. Most state tax agencies and local governments also offer automatic payment options. Contact your tax agency or check their website for instructions.
What if the biller goes out of business or I switch to a different company?
The automatic payment will fail when the biller no longer exists or no longer accepts payments to that account. You will get a notice that the payment was rejected. Set up a new automatic payment with your new biller right away to avoid missing a payment.