What is ACH in banking?

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Types of operations​

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ACH transactions come in two forms:

1. Direct deposits are payments to a recipient, such as wages from your employer or Social Security benefits, paid into your checking account.
2. Direct payments are requests to withdraw funds from an account. For example, direct payments occur when billing agencies automatically deduct utility payments from your checking account.

Note: Currently, ACH transactions do not occur in real time. Instead, banks use “batch processing” to process the entire day’s worth of requests at once. As a result, you do not receive your paycheck immediately after your employer authorizes the payment. Instead, the transaction takes one or two business days to clear through the system. Plans are underway to speed up ACH payments, and same-day payment systems are already in place for select transactions.

Sources of the article:
1. Consumer Financial Protection Bureau (CFPB) -

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2. Office of the Comptroller of the Currency –

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3. Consumer Financial Protection Bureau (CFPB) -

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4. Nacha –

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5. Nacha -

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6. Federal Deposit Insurance Corporation (FDIC) -

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7. Nacha -

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8. Federal Financial Institutions Examination Council -

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9. Nacha -

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