Automated Clearing House

Automated Clearing House (ACH) refers to a network used for electronically moving Money between bank accounts in the United States. It enables the transfer of funds through direct deposits, direct payments, and electronic Checks.

ACH transactions are processed in batches, allowing for efficient, low-cost transfers. Common examples include:

• Direct Deposit: Employers use ACH to deposit salaries directly into employees’ bank accounts.
• Bill Payments: Consumers use ACH to set up automatic payments for recurring bills, such as utilities or mortgages.
• Peer-to-Peer Payments: Services like Venmo or Zelle utilize ACH to facilitate Money transfers between individuals.

ACH is governed by the National Automated Clearing House Association (NACHA) and is widely used due to its reLiability and cost-effectiveness.