An ACH transfer moves money electronically between U.S. bank accounts through the Automated Clearing House network — the same system behind direct deposit, bill pay, and most payroll. Transfers typically settle in 1–3 business days, though same-day ACH is widely available.
The Automated Clearing House (ACH) is a nationwide electronic network for moving money between U.S. bank accounts. It's governed by Nacha (the National Automated Clearing House Association), which sets the rules, while the Federal Reserve runs FedACH as one of the two main clearing operators. When your employer deposits your paycheck, when a utility pulls a monthly bill payment, or when you initiate a bank-to-bank transfer in your mobile app — that's almost always an ACH transaction.
An ACH credit pushes money from the originator's account to a recipient's account — direct deposit is the textbook example. An ACH debit pulls money from a consumer's account with their authorization — a gym membership auto-pay is a common example. Both move through the same network; the difference is the direction of flow and who initiates the transaction.
To initiate an ACH transfer, the originating institution needs the recipient's bank routing number (a 9-digit number that identifies the financial institution) and account number. Some banks let you link external accounts through micro-deposit verification — they send two small test deposits and you confirm the amounts. The CFPB explains electronic fund transfers and your protections under federal law.
Wire transfers settle in real time or within a few hours and are generally final (irrevocable). ACH transactions batch-process and can, in some cases, be returned or reversed within a few business days. Wires typically cost $15–$50 per transfer. ACH is usually free or minimal-cost. For routine domestic payments, ACH is the default; wires are used when speed or international reach is required.