How Long Does ACH Transfer Take?


ACH transfers are one of many popular payment methods used today. If you’ve ever wondered how long an ACH transfer takes, the answer is not as simple as you might think. Depending on the type of ACH transfer, it can take anywhere from a few days to a few weeks for the funds to be transferred.
In this article, we will discuss everything you need to know about ACH payments, including how long they take.

What Is an ACH Transfer?

ACH transfers are a type of electronic funds transfer that is made through the Automated Clearing House network. Financial institutions use this network to process transactions between banks.

ACH transfers can be used for various online payments, including direct deposit of paychecks, bill payments, invoices, and tax refunds. Many banks also offer ACH transfers as a way to send money to friends and family.

Companies like Venmo and PayPal also use ACH transfers to process payments because they are efficient and typically have lower fees than other methods.

A few common uses for ACH transactions include:

External Fund Transfers

These are ACH transfers that occur between two different financial institutions. For example, if you transfer money from your bank account to your friend’s PayPal account, that would be an external fund transfer.

Internal Fund Transfers

These are ACH transfers that occur within the same financial institution. For example, moving money from your savings account to your checking account would be an internal fund transfer.

One-Time Payments

These are ACH transfers that are made as a one-time payment. For example, if you pay for an online purchase, that would be a one-time payment.

Recurring Payments

These are ACH transfers that are made regularly. For example, if you have a subscription to a service that charges your credit card monthly, that would be a recurring payment.

Business-to-Business Transfers

Business-to-business transfers are ACH payments that are made between two businesses. For example, if you are a contractor and you need to pay your workers, you would make a business-to-business transfer. Similarly, if you are a business owner who pays an agency for services, you would also make a business-to-business transfer.

Employer Direct Deposits

Perhaps the most common use for ACH transfers is employer direct deposits. This is when your employer electronically deposited your paycheck into your bank account.

Government Benefits

Another common use for ACH transfers is government benefits. This includes Social Security payments, disability payments, and veteran’s benefits.

Tax Refunds

Tax refunds can also be directly deposited into your bank account via an ACH transfer.

Types of ACH Transfers

There are two main types of ACH transfers, each with its own purposes and timelines.

Direct Deposit

It is the most common type of ACH credit transaction. This kind of transaction is initiated by a payer and sent to a payee’s bank account.

The most common example of this is when your employer electronically transfers your paycheck into your bank account. Most direct deposits are processed within one to two business days.

However, some banks may hold onto the funds for longer, especially if you have just opened an account or if the deposit is large.

If you need access to your paycheck immediately, you may consider signing up for a payroll card. This type of debit card allows you to access your earnings as soon as they are deposited.

Other ACH payments with direct deposit include:

  • Invoice payments
  • Tax refunds
  • Government benefits
  • Pension payments
  • Social security payments

Direct deposit is the most convenient way to receive payments because you don’t have to worry about cashing a check or going to the bank. The funds are automatically deposited into your account, and you can usually access them immediately.

Direct Payment

It is the second type of ACH transfer. This kind of transaction is sometimes automated but can also be initiated manually.

In direct payment ACH transactions, the payee initiates the transfer, and the funds are sent directly from their account to the payer’s account.

This type of transfer is most commonly used for embedded payments in businesses, such as utility bills, entertainment subscriptions, or gym memberships.

Direct payment ACH transfers can also be used for one-time payments, such as when you pay someone back for dinner or split a bill with a friend.

So, How Does an ACH Transfer Work?

An ACH transfer is an electronic funds transfer that allows you to send or receive money between financial institutions. ACH transfers are processed through the ACH network, which is a nationwide system that the Federal Reserve oversees. 

This network is made up of banks, credit unions, and other financial institutions that have agreed to participate. When you initiate an ACH transfer, your bank will send a batch of transactions to the ACH network. This means that ACH transfers can take a few days to process, but they are usually faster and less expensive than other types of transfers, such as wire transfers.

The Receiving Depository Financial Institution (RDFI) is the financial institution that receives the ACH transfer. The RDFI then credits the account of the Receiving Customer and debits the account of the Originating Depository Financial Institution (ODFI). RDFIs are typically banks, credit unions, or other financial institutions. To receive an ACH transfer, the RDFI must have an agreement in place with the ODFI. 

You will need the recipient’s bank’s routing and account numbers to make an ACH transfer. You will also need to provide your bank with the name and address of the recipient.

Once the transfer is processed, the funds will be deposited into the recipient’s account within a few days.

The ACH network is secure and efficient, handling billions of transactions per year with a very low error rate. If you need to make a payment quickly, you can typically do so through the ACH network with same-day or next-day processing. However, there may be a fee for this service.

How Long Do ACH Transfers Take?

ACH transfer times can vary from a few hours to several days, and the ACH bank transfer time for any specific transaction can depend on a number of criteria:

  • The time of day the transaction took place: ACH transfers initiated before the cutoff time set by the Originating Depository Financial Institution (ODFI) will typically be processed that day. Transactions initiated after the cutoff time will usually be processed the next business day.
  • The originator’s bank: Some banks may have different processing times for ACH transfers.
  • The receiving bank: The time it takes for an ACH transfer to be processed can also depend on the RDFI.
  • The type of transaction: Some types of ACH transfers may take longer to process than others. NACHA, the governing body for the ACH network, has set standards for processing times for ACH credit and debit transactions.

Holidays and weekends can also impact the ACH timeline. Transactions initiated on a holiday or over the weekend will usually be processed the next business day.

To ensure that your ACH transfer is processed quickly, you should initiate the transaction during your bank’s processing window. You can typically find this information on your bank’s website or by contacting customer service.

So, how long does ACH take to process? And how long does it take to receive a payment? Let’s break it down.

Credit transactions must be processed within one business day. For debit transactions, the processing time is two days.

After this, RDFIs will often hold payments for an additional one to two business days before making the funds available to their customers. This allows them to verify that the transaction is legitimate and that the account holder has sufficient funds to cover the transfer amount.

So, in most cases, you can expect an ACH payment to be processed and deposited into your account within three to five business days. However, some banks may have different processing times for ACH payments.

For an extra charge, some financial institutions provide same-day ACH transfers. Because same-day transfers can still occur on a business day if the transfer is begun after a bank’s regular hours (for example, if it’s initiated after 5 PM), they might arrive in the recipient account on the following business day.

ACH Transfers vs. Wire Transfers

ACH transfers are not the only way to send or receive payments electronically. Wire transfers are another option, and they can be used for domestic or international transactions.

Wire transfers are typically processed more quickly than ACH transfers. For domestic wire transfers, the funds are usually available within one business day. International wire transfers may take a few days to process.

Wire transfers can be more expensive than ACH transfers. For domestic wire transfers, banks typically charge a flat fee, while international wire transfers may have a flat fee plus a percentage of the transaction amount.

Take a look at some of the key differences between ACH transactions and wire transfers in the table below:

Examples of ACH Fraud

It is a type of fraud that occurs when someone uses your bank account information to make unauthorized transactions.

Unauthorized ACH debits can be made without your knowledge or permission. This can happen if your bank account number and routing number are stolen, for example, through a data breach or phishing scam.

Once the perpetrator has your account information, they can use it to make ACH debits from your account.

You may not see these unauthorized transactions on your bank statement for several days, making it difficult to detect the fraud. If you do notice unauthorized debits from your account, you should contact your bank or credit union immediately.

A few examples of ACH fraud include:

Employee fraud

One type of fraud is when an unauthorized person uses someone else’s bank account information to set up direct deposits. This can happen if an employee’s W-2 is stolen and the thief uses the information to file a false tax return and deposit the refund into their own account.

Another type of ACH fraud is when an authorized user makes small payments to themselves from an organization’s account. This can happen if an employee has access to the organization’s banking information and initiates a series of small transfers that may go unnoticed.

ACH fraud can also happen when an unauthorized person creates a fake check using someone else’s account information. This can happen if a thief obtains someone’s bank account information and uses it to create a fake check that they then deposit into their own account.

Phishing scams

These are a type of fraud that occurs when someone uses email or text messages to trick you into giving them your personal or financial information.

One type of phishing scam that can lead to ACH fraud is when a thief sends you an email or text message that appears to be from your bank. The message may say that there is a problem with your account and ask you to click on a link to update your information.

If you click on the link, you may be taken to a fake website that looks like your bank’s website. The website may then prompt you to enter your bank account number and routing number. Once the thief has this information, they can use it to make ACH debits from your account.

Data breaches

When a company experiences a data breach, this can lead to ACH fraud if the thief obtains your bank account information from the breached data.

One example of a data breach that led to fraud is the Equifax data breach that occurred in 2017. This breach exposed the personal information of over 145 million people, including their Social Security numbers, birthdates, and addresses.

If your bank account information was exposed in the Equifax data breach, this could have led to ACH fraud. For example, the thief could have used your bank account information to set up direct deposits or make ACH debits from your account.

ACH Fraud Prevention Tips

There are a few things you can do to prevent ACH fraud:

  • Keep your computer and mobile devices up to date with the latest security updates.
  • Be cautious of email and text messages that ask you to click on a link or provide personal or financial information.
  • Only enter your personal or financial information on websites that you know are secure. You can tell if a website is secure if it has “HTTPS” in the address and a padlock icon.
  • Monitor your bank account for unauthorized transactions.
  • You can also take steps to protect your organization from ACH fraud.
  • Educate your employees about the dangers of phishing scams and data breaches.
  • Implement security measures, such as two-factor authentication, to prevent unauthorized access to your organization’s banking information.
  • Monitor your organization’s bank account for unauthorized transactions.

If you suspect that you or your organization has been a victim of ACH fraud, you should immediately contact your bank or credit union. You may also want to report the fraud to the Federal Trade Commission and the Consumer Financial Protection Bureau.

The Benefits of ACH Payments

ACH payments offer a number of benefits for both individuals and businesses.

Some of the benefits of ACH payments for individuals include:

  • Convenience: You can set up automatic payments for your bills so that you don’t have to remember to make a payment each month. 
  • Savings: You may be able to get a discount on your bills if you set up automatic payments.
  • Security: ACH payments are processed electronically, meaning there is no risk of losing a paper check. And since your bank account information is not shared with the payee, there is less risk of fraud.
  • Fast payment time: ACH payments are typically processed within one to two business days.

Some of the benefits of ACH payments for businesses include:

  • Efficiency: Businesses can save time by setting up automatic payments for their employees’ salaries and expenses.
  • Cost savings: Businesses can save money on paper checks, wire transfers, and postage.
  • Improved cash flow: Businesses can better predict their cash flow since they will know when payments will be received or when funds will be withdrawn from their account.
  • Improved cash flow: Businesses can better manage their cash flow by knowing when funds will be withdrawn from their account.

Limitations of ACH Payments

While these payments offer many benefits, there are also some limitations to consider. Some of the limitations include:

  • Processing time: It can take one to two business days for an ACH payment to be processed. This is faster than other methods, but it can still be a hassle if you need the funds to be available immediately.
  • Fees: Some banks and credit unions charge fees for ACH payments. Savings accounts also incur fees on ACH transactions.
  • Minimum and maximum amounts: There may be minimum and maximum amount limitations for ACH payments. For example, your bank may only allow you to make ACH payments of $100 or more. ACH payments can only be made up to $100,000 as well.
  • Minimal support for foreign transactions: At this time, ACH payments can only be made within the United States. This means that if you want to send money to someone in another country, you will need to use a different method.

Conclusion: How Long Does ACH Transfer Take?

For most transactions, the ACH payment timeframe is anywhere from one to two business days. However, from start to finish, the process can take between three and five days depending on your bank’s policies, when the payer sends the payment, the time of the day, and the day of the week. ACH timing also plays a major role in when the end user receives payment.

Overall, the ACH time is fast and efficient with various benefits for users. However, there are a few things to keep in mind, such as potential fees, amount limits, and the lack of international support. Despite these limitations, ACH is still a widely used method for electronic payments in the US and offers many distinct benefits.

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