ACH stands for the Automated Clearing House — the network US banks use to move money electronically between accounts (direct deposit, bill payments, transfers). Here is how it works and when to use it.
What ACH Is
It is a batch-processed payment network connecting banks. Money moves as an electronic transfer settlement rather than paper — typically the backbone of payroll and billing.
Common Uses
- Direct deposit of salaries and benefits.
- Bill payments (utilities, subscriptions, loans).
- Internal transfers between your own accounts.
ACH vs Wire
ACH is cheaper, batched and slower (usually same/next business day); wires are immediate, fee-based and for time-critical or large payments.
Why It Matters
Knowing whether a payment is ACH or a wire explains timing and fees — and whether it will sit pending.
FAQ
How long does an ACH transfer take?
Usually 1–2 business days, sometimes faster.
Is ACH the same in Nigeria?
Nigeria uses NIP/EFT instead — the concept (electronic clearing) is similar.
Related: ABA Transit Numbers and Nigerian Sort Codes.