What an ACH payment is and how it works

An ACH payment is an electronic transfer of money from one bank account to another through the Automated Clearing House network. The ACH is a system run by the Federal Reserve and a private organisation called Nacha that processes millions of transfers daily — everything from payroll deposits to bill payments to person-to-person transfers.

When you initiate an ACH payment, your bank sends your account information and the amount to the ACH network. The network then routes the money to the receiving bank, which deposits it into the recipient's account. The whole process typically takes one to three business days, depending on when you send it and your bank's processing schedule.

ACH payments are different from wire transfers, which move money faster (usually same-day) but cost more and cannot be reversed once sent. ACH payments are slower but cheaper, and you can cancel most ACH transfers before they settle if you catch an error in time.

Key Takeaways

  • You need the recipient's full name, bank routing number, and account number to send an ACH payment.
  • ACH transfers take one to three business days to complete, not minutes or hours.
  • You can send ACH payments through your bank's website or app, or by giving your bank account details to a business that pulls the payment from your account.
  • Most banks allow you to cancel an ACH payment before it settles, but you must act quickly once you spot an error.
  • ACH payments are free or very low-cost, making them cheaper than wire transfers or checks for regular bill payments.

Information you need to send an ACH payment

Before you start, gather the recipient's banking details. You will need their full legal name exactly as it appears on their bank account, their routing number (a nine-digit code that identifies their bank), and their account number (which varies in length by bank). The routing number and account number usually appear at the bottom of a check, or the recipient can get them from their bank's website or by calling customer service.

You will also need to know the amount you want to send and the reason for the payment — most banks ask you to enter a memo or description, which helps both you and the recipient track what the money was for. Some banks limit the memo to 10 characters; others allow longer notes.

Double-check the recipient's name and account number before you send. A typo in the name or account number can send your money to the wrong person, and recovering it is difficult and time-consuming.

How to send an ACH payment through your bank

Log into your bank's website or mobile app and look for a link labeled "Send Money," "Transfer Funds," "Pay Someone," or "ACH Transfer." The exact wording varies by bank. Click that link and select the option to send money to an external account (not between your own accounts at the same bank).

Enter the recipient's name, routing number, and account number. Your bank will verify the routing number to make sure it belongs to a real bank. Some banks also offer a verification step where they deposit two small amounts (usually under $1 each) into the recipient's account, and the recipient confirms the amounts to prove they own the account. This takes an extra few days but reduces fraud risk.

Enter the amount and a memo, review all the details for accuracy, and submit. Your bank will show you a confirmation number. Save this number in case you need to track the payment or cancel it. The money will leave your account within one business day and arrive in the recipient's account one to two business days later.

When a business pulls an ACH payment from your account

You may also encounter ACH payments in the opposite direction: a business or person you owe money to asks for your bank account details so they can pull the payment directly from your account. This is called an ACH debit or ACH pull. Utility companies, insurance providers, landlords, and subscription services often use this method.

When you give a business your account details for an ACH pull, you are authorizing them to withdraw money on a schedule you agree to — for example, $150 on the 15th of each month. The business sends the withdrawal request to the ACH network, which pulls the money from your account and deposits it into theirs.

Before you authorize an ACH pull, confirm the amount, the date, and how long the authorization lasts. Some authorizations are one-time only; others repeat until you cancel them. If the business charges the wrong amount or charges you after you cancel, you can dispute the transaction with your bank within a set window (usually 60 days) and request a refund.

How long an ACH payment takes

Standard ACH transfers take one to three business days from the time you send them. The exact timing depends on when you submit the payment and your bank's processing schedule. If you send a payment on a Friday evening, it may not enter the ACH network until Monday, so it could take until Wednesday or Thursday to arrive.

Some banks offer same-day ACH, which processes transfers the same business day you send them, but this service usually costs extra and has lower limits on how much you can send. Check your bank's website to see if same-day ACH is available and what it costs.

Do not assume an ACH payment has failed if it does not arrive within 24 hours. One to three business days is normal. If more than three business days have passed and the money has left your account but has not arrived in the recipient's account, contact your bank with your confirmation number.

Canceling or disputing an ACH payment

If you realize you made a mistake — wrong amount, wrong recipient, or duplicate payment — you may be able to cancel the ACH transfer before it settles. Log into your bank's website or app, find the pending transaction, and look for a "Cancel" or "Recall" button. This option is usually only available for a few hours after you send the payment, so act quickly.

Once an ACH payment has settled (moved out of your account and into the recipient's), you cannot cancel it directly. Instead, you must contact your bank and file a dispute. Your bank will investigate and may reverse the transaction if they find an error on your side or fraud on the recipient's side. This process can take 10 business days or longer.

If a business pulled an ACH payment from your account by mistake or without your permission, you can dispute it with your bank within 60 days. Provide your bank with the transaction details and explain why you believe the charge was wrong. Your bank will contact the business and request a refund on your behalf.

ACH payment limits and fees

Most banks do not charge a fee for sending ACH payments to other people or businesses, though some banks charge a small fee (usually $1 to $3) for each transfer. Check your bank's fee schedule or ask a representative whether ACH transfers are free.

Banks often set daily or monthly limits on how much you can transfer via ACH. These limits vary widely — some banks allow $10,000 per day, others allow $25,000 or more. If you need to send more than your bank's limit, you can split the payment across multiple days or contact your bank to request a higher limit.

Businesses that pull ACH payments from your account may charge you a fee if you do not have enough money in your account when they try to withdraw. This is called an overdraft fee or insufficient funds fee, and it is separate from the ACH payment itself. Make sure you have enough money in your account on the date the payment is scheduled to pull.

Frequently Asked Questions

Can I send an ACH payment to someone at a different bank than mine?

Yes. ACH payments work between any two banks in the United States that participate in the ACH network, which includes all major banks and most credit unions and smaller banks. You only need the recipient's routing number and account number, not their bank's name.

What if I send an ACH payment to the wrong account number?

The money will go to whatever account matches that routing number and account number, even if the name does not match. Recovering money sent to the wrong account is difficult. Contact your bank when ready with your confirmation number and ask them to attempt a recall. If the money has already settled, your bank can contact the receiving bank and request a reversal, but the receiving bank is not required to comply.

Is an ACH payment safe?

ACH payments are reasonably safe if you send them yourself through your bank's website or app. The main risk is sending money to the wrong account or giving your account details to a scammer. Never share your full account number or routing number with someone you do not trust. If a business asks for your account details, confirm they are legitimate before you provide them.

Can I schedule an ACH payment for a future date?

Yes. Most banks allow you to schedule ACH payments to send on a specific date in the future. This is useful for bill payments you know are coming. Log into your bank's transfer page, enter the recipient and amount, and select the date you want the payment to go out. The money will leave your account on that date and arrive one to three business days later.

What is the difference between an ACH payment and a wire transfer?

Wire transfers move money the same day or next day and cost $15 to $50, while ACH payments take one to three days and are free or cost $1 to $3. Wire transfers cannot be reversed once sent, but ACH payments can usually be canceled before they settle. Use ACH for routine bills and transfers; use wire transfers only when you need money to arrive urgently.