The Automated Clearing House (ACH) Network is a highly reliable and efficient nationwide batch-oriented electronic funds transfer system governed by the NACHA Operating Rules that provide for the interbank clearing of electronic payments for participating depository financial institutions. The Federal Reserve and Electronic Payments Network act as ACH Operators, central clearing facilities through which financial institutions transmit or receive ACH transaction entries.
An ACH debit is also known as an electronic check transaction. There is a slight delay in processing these types of transactions to bank accounts. Think of it as writing a check, but it happens electronically. These types of transactions typically take 1 - 3 business days to post to your bank account.
Examples of ACH payments include:
- Direct deposit of payroll, tax refunds, Social Security and other government benefits
- Direct payment of consumer bills such as mortgages, loans, utility bills and insurance premiums
- Business-to-business payments
- E-commerce payments and Federal, state, and local tax payments