What is ACH?
When you wake up on a Friday and see that your salary was automatically deposited to your bank account, that’s ACH.
When you pay a bill online and save the hassle of writing and mailing a check, or set your mortgage, car loan and other recurring payments to automatically pay on the day of the month you choose, that’s ACH.
Those are just some of the ways that tens of millions of Americans use ACH, or the Automated Clearing House Network. Whether you know it as Direct Deposit, direct pay or electronic check, ACH is at your service handling everything from Social Security and salaries to mortgage and credit card payments and more. Just set it and forget it—no more worrying about getting payments in on time.
See ACH in Action
How Direct Deposit and Direct Payment Work
Direct Deposit
Direct Deposit is fast and reliable, and it’s the way 93% American workers get paid and it puts consumers in control of their finances. They can access their money quickly, pay no additional fees to receive their pay. In addition to payroll, Direct Deposit can be used to receive reimbursements, bonuses and more.
Split Deposit
Split Deposit allows your employees to direct a fixed amount or percentage of their pay into a savings or investment account each pay period.
Direct Payment
Direct Payment is the electronic transfer of funds to make payments – whether sending or receiving. Direct Payment allows consumers to pay their bills or tuition, donate to a favorite charity, make a purchase, or send money to a friend or family member electronically from a checking or savings account.
ACH Supports Religious Organizations, Nonprofits and Businesses
Direct Deposit and Direct Payment can help businesses save time and cut costs. And, for nonprofits and religious organizations, Direct Payment helps manage and increase automatic donations.
In 2019, the ACH Network processed 24.7 billion payments, marking the fifth consecutive year in which it added more than 1 billion new payments. Those include Direct Deposit via ACH of salaries, dividends and Social Security and other government benefits, and Direct Payment via ACH for bill payments including utilities and mortgages, as well as charitable giving, tuition, subscription services, and person-to-person (P2P) and business-to-business (B2B) payments. The total value of these payments exceeded $55.8 trillion.
In 1974 people carried dimes to make calls from payphones and copies were made on a mimeograph. A lot has changed, and so has Nacha and the ACH Network. The network continues to grow and provide greater services to consumers and businesses.
Network Administration Fees
One of the ways that financial institutions help sustain a healthy ACH Network is through Network Administration Fees.
Each depository financial institution that transmits or receives ACH entries is required to pay Nacha an Annual Fee and a Per-Entry Fee for costs associated with the administration of the ACH Network. The fee amounts are set to recover costs of the ACH Network administrative functions, which Nacha performs for the industry on an “at-cost” basis.