On-Us Item: Transactions Paid and Deposited at the Same Bank

Key takeaways

• An on-us item is a check, draft, electronic debit, or transfer presented to the same bank that holds the payer’s account.
• Because the payer’s (drawing) account and the depositary account are at the same bank, the transaction can be settled internally without external clearing.
• On-us transactions reduce processing costs and can let the bank earn fees on both sides of the transaction.
• When banks differ, clearing networks or interbank processes are required, which can add fees and latency.

What is an on-us item?

An on-us item refers to any payment instrument (for example, a check or electronic transfer) that is deposited or presented at the issuing bank—the bank where the payer’s account is held. It’s also called a “house check” when referring to paper checks. The drawing account must have sufficient funds for the payment to be honored.

How it works

• If the bank of first deposit (BOFD) and the payer’s bank are the same, the bank can immediately verify and move funds internally.
• No outside clearinghouse or third-party settlement network is needed, so authorization, verification, and settlement happen within the bank’s systems.
• Electronic on-us items follow the same principle: both initiating and receiving accounts reside at the same institution.

Why banks prefer on-us items

• Lower operational costs—no interbank clearing or external fees.
• Faster settlement and reduced float time.
• Opportunity to earn revenue on both the acquiring and issuing sides of the transaction.
• Simpler fraud and risk controls because the transaction stays inside one institution.

On-us vs. not-on-us and other transaction types

• Not-on-us: The depositor’s bank and the payer’s bank are different. These transactions use interbank clearing or payment networks and can carry fees, longer settlement times, and more intermediaries.
• Cross-border/international: Acquirer and issuer are in different countries, requiring international payment rails and forex processes.
• Intra-regional: Transactions between banks in different regions but within a common payments framework (examples: SEPA in Europe, GIM UEMOA in West Africa).

Example (card payments): When a merchant’s bank (the acquirer) processes a card sale, it must route an authorization request to the card-issuing bank (the issuer) when those banks are different—this is a not-on-us flow.

Practical implications

• For individuals and businesses, on-us deposits and payments typically clear faster and with fewer fees.
• For banks, increasing on-us activity can improve margins and reduce dependency on external clearing networks.
• For regulators and payments planners, understanding the mix of on-us and not-on-us flows helps assess liquidity, settlement risk, and infrastructure needs.

Conclusion

On-us items streamline settlement by keeping authorization and payment within a single bank, reducing costs and processing time. When transactions cross bank boundaries or national borders, they require external clearing and settlement systems, which add complexity and expense.