How Long Does an ACH Deposit Take

An ACH deposit is a method of electronically sending money through the Automated Clearing House network. More than 10,000 participating institutions utilize it to coordinate withdrawal and deposit requests incorporating bank accounts under their command.

When an employer needs to pay an employee, an ACH deposit is better than a physical check or cash. It transfers money from the employer’s bank account to the worker’s account in a low-cost and straightforward manner. The employer usually instructs their financial institution (or the payroll corporation) to inform the ACH network to withdraw funds from their account and deposit it to the employee’s account.

Similarly, ACH deposits enable users to make deposits elsewhere, whether a bill payment or a P2P transfer to a landlord or friend. Government agencies also use ACH deposits to send out unemployment and pension benefits.

Types Of ACH Transfers

The ACH transfers are usually processed in 2 ways, with different costs and delivery times:

  1. ACH Debit Transaction: Money is “pulled” from a bank account. When you create a recurring payment transaction, the corporation you are paying may withdraw the amount owed from your account every month.
  2. ACH Credit Transactions: Allow you to “push” cash online to different bank accounts, either your bank account or your family and friends’ bank account. 

What Are The Requirements For Making An ACH Payment?

The process of sending or receiving an ACH payment is relatively straightforward. To send, you must provide the bank name to which you are sending money, ABA routing number, and appropriate account number.

You can find the routing number and account number at the bottom of the receiver’s check. This information is contained in a string of numbers in the lower left. The routing number is the first nine digits, and the account number is the next 12 digits.

The last four digits are the check number, which is irrelevant for an ACH transaction. You may contact your bank to begin the transfer when you have this information.

You can set up automatic transfers via your bank whenever you need to transfer money to a financial institution rather than a person, provided the recipient is eligible.

How Long Does an ACH Deposit Take?

How Long Does An ACH Deposit Take

ACH transactions typically settle within 1 to 2 business days. However, most financial institutions make the funds available the following business day.

According to the National Automated Clearing House Association (NACHA), the trade body which controls the network, ACH credits should be processed within 1 to 2 business days. A single working day is required to process an ACH debit. However, the recipient financial institution may impose a holding period, so the transfer may take several days to complete.

Moreover, new regulations push for same-day delivery by mandating three network processing times daily rather than one. Some banks, however, may charge an additional fee for this premium plan. Nonetheless, it will reduce funding times, allowing you to send and receive ACH transfers more instantly than before.

Are ACH Transactions Secure?

In general, ACH transactions are safe to use. ACH fraud is pretty uncommon in summary. Nevertheless, to receive money, you must provide your bank account numbers.

If you do not trust the recipient, remember that they might utilize your bank details to withdraw money from your account. Also, if you are the victim of a fraudulent withdrawal, you will be charged a fee. If you don’t file a report within two days, you’ll be fined $50, and if you don’t report the matter within 60 days, you’ll be fined $500.

As a result, it’s critical to check your bank account regularly to ensure that all of your debts are correct. If you recognize anything unfamiliar, notify your bank right away to avoid any severe liability. 

How To Receive An ACH Transfer?

To get an ACH transfer, you must provide the sender with your routing number and bank account number. When establishing up direct deposit, some situations, like your employer, may require a voided check to extract that information directly.

Another alternative would be to utilize a third-party service such as PayPal. It is quick and straightforward, though processing times of three to five days may apply when transferring funds to your bank.

It is free to send money to family and friends in the United States. However, sending money outside the country costs a percentage of the amount sent. That usually depends on the receiver’s nation and how the transfer is funded.

How To Cancel An ACH Transfer?

In some cases, the sender may be able to reverse a transaction. Confirm with your bank to see how they manage this process, as it varies by location. Though unlikely, reversal may occur if your employer deposits the incorrect amount into your checking account.

Instead of the sender asking you to return the funds manually, they could reverse the funds. However, if there are no errors or you are not a victim of theft, you should not be concerned about this issue happening with your ACH credits. Also, it is something to keep in mind, especially if you get direct deposits from the employer.

Benefits And Drawbacks Of ACH Transfers


  • The most common benefit of using ACH transfers is convenience. Utilizing an electronic ACH payment to pay your utility bill, mortgage, or other regular monthly expense may be less time-consuming and more straightforward than writing a check. You will also save money by not having to purchase stamps. Furthermore, an ACH payment may be more secure than other payment types.
  • ACH payments are usually sent and received quickly. A transaction’s settlement, or the transfer of money from one bank to the other through the ACH Network, usually occurs the day after implementation. 
  • ACH transfers are frequently free depending on the type of transfer and where users bank. For instance, your bank may not charge you anything to transfer funds from your checking account to another bank’s account. If it does charge a fee, it may be a small fee.
  • Compared to wire transfers, which may range from 14USD to 75USD for international outbound transfers, ACH transfers are far more cost-effective. Wire transfers are acknowledged for their speed and are frequently utilized for same-day delivery, but they might take longer at times.


  • Transaction Limits On ACH Transfers: Several banks limit the amount of money you could send through ACH transfers. There might be transaction limits, weekly or monthly limits, and daily limits. Banks may also place restrictions on transfer destinations. 
  • Transferring Regularly From Savings Accounts May Result An A Penalty: Federal Reserve Regulation D governs savings accounts, limiting various withdrawals to 6 every month. If you exceed that limit by making multiple ACH transfers from your savings to another bank, you may be subject to an additional withdrawal penalty. If you make regular transfers from your savings account, the bank might convert your account to a checking account.
  • Timing: The time frame is essential when sending an ACH transfer. It is because not every bank sends an ACH transfer for bank processing at the same period. There might be a deadline by which you must submit your transfer for the transfer to be processed for the following business day. Initiating ACH transfers after the deadline may result in a delay, which might be an issue if you are trying to meet a due date for your bill to avert a late fee. ACH transfers take an average of 1 to 3 working days to complete.

Difference Between Direct And ACH Deposit

A Direct Deposit is a payment made through the ACH network. It is a colloquial term for common ACH deposits, whereby people receive money into their bank accounts directly. ACH-based deposits, also known as direct deposits, usually involve:

  • Tax refunds
  • Wages and salaries
  • Pension and Social Security benefits

Note that not all ACH deposits are known as direct deposits. Even though these deposit types utilize similar underlying ACH protocols, the term is usually not used when relating to transactions such as online bill payments and peer-to-peer transfers made via banking portals.

Bottom Line

ACH transfers might be a relatively simple way to send or receive money. In any case, take time to understand your bank’s direct payment and ACH direct deposit policies. Also, keep an eye out for ACH transfer scams. For example, a common scam may involve someone mailing you and claiming that you are owed money and that all you have to do to receive the cash is give your bank routing number and account number.