What is ACH?
Posted by Checkbook on Jan 21, 2019
ACH or, Automated Clearing House, is a widely used digital technology for transferring funds from one bank account to another. It is the most common technology used to transfer funds in the United States. NACHA is the organization involved in the transfer of funds through ACH. NACHA stands for National Automated Clearing House Association.
What is a Clearing House?
A clearing house is an intermediary between parties exchanging goods, in our case, a check. When person X wants to send funds to person Y using a check, the clearing house is the middle man that executes the receipt and delivery of that check.
If ACH is being used, funds from the Sender's account are electronically transferred to the Recipient’s account. ACH doesn't require there be a physical exchange of cash or checks. Thus the term "Automated" in the title. The middle man in this case is intangible and automated. These transactions are typically settled within 3-4 business days.
Automation is the standard today. It is the expectation. “Automated” does not mean the same thing as instant, though. ACH does not guarantee funds in less than 3 business days, nor does it offer real time status updates on the check.
Digital Checks, however, provide instant bank verification and safer encryption.
About Author: Nicholas Bragg & The Checkbook Team
Related Posts
What is an eCheck?
eChecks (aka. Electronic Checks) are a payment tool that are used to send funds electronically.
Checkbook Delivers Faster Payment Disbursements For Government Age
Over the past two years, the fallout from a global pandemic has affected workers in every industry. For some – particularly those working in restaurants, bars, and other service sectors – restrictions and shutdowns have been especially difficult. As a result, government agencies have worked to address this problem, issuing essential grants and stimulus payments intended to help service workers, artists, and other at-risk sectors navigate the economic setbacks that they experienced.
How To Maintain The Security Of Your Bank Account
All money now is virtual and all of it is stored in the hands of our fiduciary partners, banks. Maintaining the security of your bank account is imperative now.