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What is an ACH?

An ACH is an electronic fund transfer made between banks and credit unions across what is called the Automated Clearing House network.

ACH is used for all kinds of fund transfer transactions, including direct deposit of paychecks and monthly debits for routine payments. Merchants often enable consumers to pay bills via ACH by providing an account number and bank routing number. A number of online payment services also conduct transactions via ACH, including most banks and credit unions’ online bill payment services.

While many ACH payments clear quickly, because of the way in which an ACH is processed and precautions against fraud and money laundering, transactions can sometimes take several days to complete.

ACH transactions can trigger a return notification if there are insufficient funds in the account.