ACH (Automated Clearing House)
The US network banks use to move money between accounts in batches, settling the same day or within one to two business days.
What ACH is
ACH is the Automated Clearing House network, which moves electronic credits and debits between US bank accounts. Nacha writes the rules, and two operators run the network: the Federal Reserve's FedACH and The Clearing House's EPN. Payroll, bill payments and many account-to-account transfers run on ACH.
How it works
The sender's bank batches payment files and sends them to an ACH operator. The operator sorts the files and passes each payment to the receiving bank. Credits settle within two business days and debits within one, while same-day ACH settles within hours.
- 01 · ORIGINATE The business's bank sends a batch of ACH credits or debits to an operator.
- 02 · CLEAR The operator sorts the batch and routes each payment to the receiving bank.
- 03 · SETTLE Banks settle the totals, and the receiving bank posts funds to the account.
| Same-day window | Submission deadline (ET) | Settlement (ET) |
|---|---|---|
| Morning | 10:30 a.m. | 1:00 p.m. |
| Afternoon | 2:45 p.m. | 5:00 p.m. |
| Evening | 4:45 p.m. | 6:00 p.m. |
Deadlines apply to banks submitting to the operator; each bank sets earlier cutoffs for its own customers.
When businesses use it
- Payroll direct deposit and benefit payments
- Bill payments, subscriptions and other recurring debits
- Business-to-business payments for invoices and vendors
- Payouts to sellers, contractors and customers
- Funding digital wallets and verifying accounts with microdeposits
Cross River moves ACH and same-day ACH payments through COS, its API-driven bank core, with a direct connection to the Federal Reserve. Partners can send credits and debits, receive transaction data and webhooks by API, and process after hours. See ACH at Cross River.