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If you’ve ever paid a bill online, received your paycheck via direct deposit, or moved money between bank accounts, chances are you’ve used an ACH transfer. The Automated Clearing House (ACH) network quietly powers billions of electronic payments each year, making it one of the most common — and convenient — ways money moves in the U.S.
But what exactly is an ACH transfer, how long does it take, and when should you use one? Read on to learn how ACH transfers work and why it matters to you.
What is an ACH transfer?
An ACH transfer is a payment processed by the Automated Clearing House network. This is a nationwide network that financial institutions use to exchange batches of electronic credit and debit transactions. In 2025, the ACH processed an average of 141 million transactions per day, totaling $93 trillion in value.
ACH payment types
There are several types of ACH payments, and they all differ depending on the purpose of the funds and the time it takes to arrive. This includes:
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Same-day ACH: Payments that are sent, received, and posted to a recipient’s account on the same day.
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Business-to-business (B2B) ACH: Electronic payments sent from one business to another.
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Direct deposit: Paychecks, government benefits, tax refunds, and other payments that get deposited directly into your bank account.
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International ACH (IAT): Used to facilitate payments across national borders.
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Healthcare electronic funds transfer (EFT): These types of payments make it easier for your healthcare providers to be paid in a timely manner and process benefit claims.
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Consumer payments: These include electronic bill payments such as your monthly student loan payment, utility bill, and mortgage payment. It also includes peer-to-peer payments through platforms such as Venmo, PayPal, or Zelle.
How do ACH transfers work?
ACH transfers require a series of steps:
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Payment is initiated. The individual or organization making the payment must provide the necessary information for the transfer, including the recipient's bank account details, the amount to be transferred, and the date of the transfer.
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Payment instructions are sent to an ACH operator. There are two ACH operators: the Federal Reserve Bank and the Electronic Payments Network (The Clearing House). These operators sort the transactions and route them to the recipient's bank. During this step, the details of each transaction are verified, ensuring that the accounts involved are valid and the initiating party has the necessary funds or authorization for the transfer.
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Funds are settled. Once the transaction has cleared, funds are debited from the sender's bank account and credited to the recipient's bank account.
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Account holder receives their money. The funds are posted to the receiver's account.
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ACH transfer fees and timelines
ACH transactions are collected by financial institutions throughout the day and processed in batches. This means all ACH transactions initiated during a specific timeframe are grouped together and processed at predetermined intervals throughout the business day.
ACH transfers typically take 1-3 business days to complete. However, the exact timing can vary depending on factors such as the banks or credit unions involved, the time of day the transfer was initiated, and any holidays or weekends that might affect processing times. Many financial institutions have cut-off times that determine whether your ACH transfer is processed that day or the next business day.
Nacha, or the National Automated Clearinghouse Association, which manages the ACH network, estimates that 80% of ACH payments settle in one banking day or less (by regular and same-day ACH).
You likely won’t pay any fees for ACH transfers, but this depends on your financial institution. In some cases, your bank might charge a fee for expedited ACH transfers or international ACH transfers. Refer to your account’s terms and conditions to determine whether or not you’ll incur a fee.
ACH vs. wire transfers
ACH and wire transfers are both methods for sending money electronically, but they differ in a few ways.
A wire transfer is a direct, real-time transfer between banks, processed through networks such as Fedwire (or SWIFT for international payments). Here are some other ways wire transfers differ from ACH transfers:
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Wire transfers come with extra fees: Unlike ACH transfers, incoming and outgoing wire transfers often incur fees. Wire transfer fees typically cost around $35 for domestic wires and can be higher for international wire transfers. Fees can also vary depending on the amount being sent.
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Wire transfers may be processed more quickly than ACH transfers: ACH transfers are processed in batches, while wire transfers are processed individually and can happen on the same day or even instantly in some cases.
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A wire transfer could make more sense depending on the purpose of the money transfer: If you’re making a one-off or time-sensitive payment, a wire transfer ensures your money arrives quickly and securely. ACH transfers are more commonly used for routine payments.
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