Automated Clearing House (Ach)
| An automated clearing house (ACH) is an electronic transaction processing network that is used to facilitate debit and credit transactions. ACH is used by businesses and individuals to make payments or transfer funds electronically. ACH transactions are processed through a clearing house, which is a financial institution that acts as a middleman between the payer and payee. ACH transactions are typically processed within one to two business days. ACH transactions are made up of two types of payments: direct deposits and direct payments. Direct deposits are payments that are made into a bank account, such as a paycheck or Social Security benefits. Direct payments are payments that are made from a bank account, such as a mortgage payment or utility bill. ACH transactions are processed through the Federal Reserve Bank's ACH network. The ACH network is made up of a series of banks and financial institutions that are connected to each other electronically. When a payer initiates an ACH transaction, the payer's bank will send a message to the ACH network. The message will then be routed to the payee's bank. The payee's bank will then deposit the funds into the payee's account. ACH transactions are typically processed within one to two business days. However, there are some types of ACH transactions that can take longer to process. For example, if an ACH transaction is sent on a holiday or weekend, it may take an additional day or two for the transaction to be processed. ACH transactions are safe and secure. ACH transactions are processed through the Federal Reserve Bank, which is a government-regulated institution. ACH transactions are also subject to the Electronic Funds Transfer Act, which provides consumers with protections against unauthorized transactions. |
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