What is an ACH transfer?


Quick Answer

An Automated Clearing House transfer is a method of transferring funds between banking units electronically, across a network. ACH is linked to the United States’ national banking system and acts as a central point where transactions made by financial institutions are processed, according to Tech Target.

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Full Answer

The ACH system is one of the most reliable and cost effective ways of making online payments, direct deposits and bank to bank transfers. The system is run by NACHA and funded by its affiliate institutions. Transactions carried out through ACH transfer may take a few minutes to several days of processing before they are completed. ACH offers a great solution to most financial transactions and has increased the effectiveness of business and government transactions in the United States, says Citizens Bank. According to the bank, payments can also be made outside the United States through platforms such as the accessGlobal ACH solution.

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