An ACH account is any bank account that can send or receive ACH transfers — which are electronic payments that move money between banks.

ACH stands for Automated Clearing House. It is a network that lets banks move money electronically from one account to another, usually within one to two business days. You do not need a special account type to use ACH — your regular checking or savings account at any bank can send and receive these transfers.

When you set up direct deposit for your paycheck, pay a bill online through your bank's website, or send money to a friend's account, you are using ACH. The bank does not move physical cash. Instead, it sends electronic instructions through the ACH network to the other bank, telling it to move the money.

Key Takeaways

  • Any checking or savings account at a bank or credit union can send and receive ACH transfers — you do not need to request a special account type.
  • ACH transfers are electronic and usually take one to two business days, which is slower than a wire transfer but cheaper and more find.
  • Common ACH uses include direct deposit of paychecks, paying bills online, and sending money between your own accounts at different banks.
  • ACH transfers are safer than checks or cash because the receiving bank verifies the account number before the money moves.

How ACH transfers move money between banks

When you start an ACH transfer, your bank collects your information: the receiving bank's routing number, the recipient's account number, and the amount. Your bank then sends this information to the ACH network, which is operated by two organizations called Nacha and the Federal Reserve.

The ACH network batches transfers together and sends them to the receiving bank. The receiving bank checks that the account number exists and that the account is active. If everything matches, the money is deposited. If the account number is wrong, the transfer bounces back to your bank, which returns the money to you.

This whole process takes time because the ACH network does not process transfers when ready. Banks batch them together and send them at set times during the day. A transfer you start on Monday morning might not arrive until Wednesday. Weekends and bank holidays add extra days.

The difference between ACH transfers and other ways to move money

ACH is not the only way to move money electronically. Wire transfers are faster — they usually arrive the same day — but they cost money (usually $15 to $30) and cannot be reversed once sent. ACH transfers are free or very cheap, but they take longer and can be reversed if there is a mistake.

Checks are slower than both. A check can take five to ten business days to clear, and you have to write it by hand and mail it. ACH is faster and requires no paper.

Debit card payments are when ready at the point of sale, but they work differently — the merchant charges your card directly rather than your bank sending money to their bank. ACH is better for paying bills or sending money to people you know, because it moves money between bank accounts.

Common uses for ACH transfers

Direct deposit is the most common ACH use. Your employer sends your paycheck to your bank account through ACH instead of handing you a paper check. You set this up once, and it happens automatically every payday.

Bill payments through your bank's website usually use ACH. When you log into your bank and pay your electric bill or credit card bill, your bank is sending an ACH transfer to the company that receives the payment.

You can also use ACH to move money between your own accounts at different banks. If you have a checking account at one bank and a savings account at another, you can transfer money between them through ACH.

Some people use ACH to send money to family or friends through their bank's transfer service, though apps like Venmo and PayPal are more common for this now.

What information you need to send an ACH transfer

To send money to someone else's account through ACH, you need four pieces of information: the recipient's full name, their bank account number, their bank's routing number, and the amount you want to send.

The routing number is a nine-digit code that identifies the bank. Every bank has one. You can find your own bank's routing number on the bottom left of your checks, or by calling your bank or visiting their website.

The account number is unique to that person's account at that bank. It is usually 8 to 12 digits long. You can find your own account number on your checks, your bank statement, or by logging into your online banking.

Make sure you have the correct account number before you send the transfer. If the number is wrong, the transfer will bounce back, though it may take a few days.

Limits on how much you can transfer through ACH

Most banks set a daily limit on how much you can send through ACH — often $1,000 to $5,000 per day, though this varies by bank. Some banks also set a monthly limit. These limits are meant to protect you if your account is hacked.

If you need to send more than your limit, you can call your bank and ask them to raise it temporarily. Some banks will do this over the phone, though others require you to visit a branch in person.

The ACH network itself does not set a limit on transfer size — theoretically you could send hundreds of thousands of dollars through ACH if your bank allows it. But most banks keep daily limits low for security reasons.

ACH transfers and account security

ACH is generally safe because the receiving bank verifies the account number before accepting the transfer. If you send money to the wrong account number, the transfer will bounce back instead of going through.

However, ACH transfers can be reversed if there is fraud. If someone steals your account information and sends money out through ACH without your permission, you can report it to your bank. Your bank can reverse the transfer and return the money to you, though this process takes time.

To protect yourself, never share your account number or routing number with people you do not trust. If a stranger asks for this information, it is usually a scam. Your bank will never ask you for your account number through email or text.

Frequently Asked Questions

How long does an ACH transfer take?

Most ACH transfers take one to two business days. If you start a transfer on Friday, it may not arrive until Monday or Tuesday because the ACH network does not process transfers on weekends. Holidays add extra time too.

Can I cancel an ACH transfer after I send it?

It depends on how fast you act. If you cancel within a few hours of sending it, before your bank submits the batch to the ACH network, the transfer can be stopped. Once the batch is submitted, you usually cannot cancel it. Call your bank when ready if you need to stop a transfer.

Is there a fee for ACH transfers?

Most banks do not charge a fee for ACH transfers between your own accounts or for receiving transfers. Some banks charge a small fee (usually $1 to $3) if you send a lot of transfers in one month, but this is uncommon. Check your bank's fee schedule to be sure.

What happens if I give the wrong account number?

The transfer will bounce back to your bank, and the money will be returned to your account. This usually takes a few days. The receiving bank checks the account number before accepting the transfer, so money cannot go to a wrong account by accident.

Can I use ACH to send money internationally?

No. ACH only works between U.S. banks. To send money to another country, you need a wire transfer or an international money transfer service. Wire transfers are faster but more expensive than ACH.