What is an ACH Account?

Can someone explain to me what an ACH account is and how it works...

5 Answers

  • 1 decade ago
    Best Answer

    ACH is a type of transaction... not account.

    An ACH is like a wire transfer, except it takes 2-3 days and is much less expensive.

    All your online payments for your bills are ACH payments..

  • 1 decade ago

    From Wikipedia:

    Automated Clearing House (ACH) is the name of an electronic network for financial transactions in the United States. ACH processes large volumes of both credit and debit transactions which are originated in batches. Rules and regulations governing the ACH network are established by NACHA-The Electronic Payments Association, formerly the National Automated Clearing House Association, and the Federal Reserve (Fed). In 2002, this network processed an estimated 8.05 billion ACH transactions with a total value of $21.7 trillion.[1] In the rest of the developed world, these rules and regulations are defined by each country's regulatory bodies. European Payments Council is currently implementing a PE-ACH, Pan-European ACH.

    ACH credit transfers include direct-deposit payroll payments and payments to contractors and vendors. ACH debit transfers include consumer payments on insurance premiums, mortgage loans, and other kinds of bills. Businesses are also increasingly using ACH to collect from customers online, rather than accepting credit or debit cards.

    Debit transfers also include new applications such as the Point-of-Purchase (POP) check conversion pilot program sponsored by NACHA. FedACH is the Federal Reserve's centralized application software used to process ACH transactions. Both the government and the commercial sectors use ACH payments. The Electronic Payments Network (EPN) is the only private sector ACH Operator in the United States.

    The Federal Reserve Banks are collectively the nation's largest automated clearinghouse operator and in 2005 processed 60% of commercial interbank ACH transactions. The EPN processed the remaining 40%. EPN and the Reserve Banks rely on each other for the processing of some transactions in which either the Originating Depository Financial Institution (ODFI) or Receiving Depository Financial Institution (RDFI) is not their customer. These interoperator transactions are settled by the Reserve Banks.

  • 1 decade ago

    The Automated Clearing House (ACH) is an electronic payment network that allows funds to be electronically debited or credited to a company's or individual's deposit account.

    Currently these deposit accounts include checking and savings accounts, & loan accounts

  • 1 decade ago

    This is a feature on many checking accounts. It is when you authorize to have automatic payments deducted from your checking account. Many creditors offer a discount in the Annual Percentage Rate on the interest.

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  • 1 decade ago

    Its like automatic payment. It would take to much brain cells for me to explain so I'll just give you a good link. Read up. It contains vital information.


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