How ACH payments move money between bank accounts

What an ACH payment is

An ACH payment is an electronic instruction to move money from one US bank account to another over the ACH Network. It identifies the accounts by their bank routing and account numbers, not by a card number, and it travels between banks in batches with other payments rather than on its own.

Each payment is called an entry. A business or a person starts it, their bank sends it on, an ACH Operator sorts it and settles it between the banks, and the receiving bank posts it to the account. None of this is instant or real-time. Entries settle on a schedule, and some can be returned after they settle.

How ACH payments work: the five participants

Nacha describes five core participants in every ACH payment, including two banks, the ODFI and RDFI. The payment passes through them in this order.

1. OriginatorStarts the payment and instructs its bank
2. ODFIThe Originator’s bank sends the entries
3. ACH OperatorFedACH or EPN sorts and settles
4. RDFIThe Receiver’s bank posts the entry
5. ReceiverAuthorized the credit or debit

• Originator: the business or person that starts the payment and sends the instructions to its bank. When your platform sends ACH entries for your customers, your customers are the Originators.
• ODFI (Originating Depository Financial Institution): the Originator’s bank. It takes the instructions and sends the entries to an ACH Operator. See the ODFI definition in our payments glossary.
• ACH Operator: FedACH or The Clearing House’s EPN. It receives files from ODFIs, distributes entries to RDFIs and settles between the banks.
• RDFI (Receiving Depository Financial Institution): the Receiver’s bank. It posts each entry to the right account.
• Receiver: the person or business whose account is credited or debited. The Receiver must have authorized the Originator to credit or debit that account.

Your platform does not appear in this chain by name, even when the payment starts on one of its screens. Where it fits depends on its agreements: see where a software platform fits.

Who runs the ACH Network

Nacha is the organization that writes the Nacha Operating Rules and administers the ACH Network. It is not a government regulator, and it does not process, clear or settle payments itself.

That work belongs to the two US ACH Operators: the Federal Reserve Banks, which run FedACH, and The Clearing House, which runs EPN (the Electronic Payments Network) as its private-sector ACH service. The clock times in this guide come from the FedACH schedule.

Federal law applies too. Regulation E, issued by the Consumer Financial Protection Bureau (CFPB), covers electronic transfers to and from consumer accounts and has its own requirements and deadlines, so consumer ACH payments must meet both the Nacha rules and Regulation E.

ACH credit vs ACH debit

An ACH credit pushes money from the Originator to the Receiver. An ACH debit pulls money from the Receiver’s account into the Originator’s account. Nacha says debits make up just over half of ACH payments and credits just under half.

On a software platform, debits are the usual way your customers collect from the people and businesses who owe them, such as a tenant paying rent or a client paying an invoice. Credits are how money goes out, such as wages or a payment to a supplier.

SEC codes in brief

Every ACH entry carries a Standard Entry Class (SEC) code. It tells the banks whether the entry touches a consumer or a business account and how the payment was authorized, which decides the authorization rules that apply.

• PPD (Prearranged Payment and Deposit): credits or debits to consumer accounts under a standing arrangement, such as payroll direct deposit or recurring bill pay.
• CCD (Corporate Credit or Debit): payments to business accounts, such as vendor payments, cash concentration and funding payroll accounts. It carries at most one addenda record.
• CTX (Corporate Trade Exchange): business payments that carry full remittance data for trading partners, with up to 9,999 addenda records.
• WEB: consumer debits authorized or initiated over the internet or a wireless network, plus person-to-person (consumer-to-consumer) credits.
• TEL: consumer debits authorized orally over the telephone.

A PPD debit needs the consumer’s authorization in writing, signed or similarly authenticated, and the consumer must get a copy. CCD and CTX rest on an agreement between the two businesses, with no consumer-style form. WEB debit Originators must also use a commercially reasonable fraud detection system that includes validating the account. Our guide to ACH authorization requirements by SEC code covers what to collect for each.

Two Company Entry Descriptions are now required. Since March 20, 2026, PPD credits for wages and similar pay must use PAYROLL, and WEB debits for online purchases of tangible goods must use PURCHASE.

When ACH entries settle

Settlement is the point where money moves between the banks, through the ACH Operator. As of October 2026, Nacha rules set these limits on ACH settlement times:

• An ACH debit settles the next banking day, or the same day only if it is sent as Same Day ACH.
• An ACH credit can settle the same day, the next banking day or two banking days later.

On FedACH, standard entries, the ones not sent as Same Day ACH, settle at 8:30 a.m. ET on their settlement day. Banks can send FedACH files of these entries by six deadlines:

• 10:30 a.m. ET
• 2:45 p.m. ET
• 4:45 p.m. ET
• 8:00 p.m. ET
• 10:45 p.m. ET
• 2:15 a.m. ET, overnight, the last of the six

These are Operator deadlines; your provider’s cutoff is earlier.

Settlement between banks is also not the same as a business being funded. When your customers see the money from debits they collect depends on their provider’s funding schedule, not on the settlement date alone.

When receivers see the funds

Funds availability is a separate question from settlement. It is the deadline for the Receiver’s bank to let the account holder use money from an ACH credit.

Since September 18, 2026, an RDFI must make non-Same Day ACH credits available by 9:00 a.m. RDFI local time on the settlement date, whenever the file arrives. Before that date, the 9:00 a.m. deadline applied only to credits the RDFI had by 5:00 p.m. local time the day before, and later credits could wait until the end of the settlement date. Removing that condition brought credits from FedACH’s last overnight file, the one with the 2:15 a.m. ET deadline that reaches RDFIs around 6:00 a.m. ET, under the 9:00 a.m. deadline.

A companion rule, approved July 27, 2026 and also effective September 18, 2026, covers RDFIs located east of the Atlantic Time Zone and west of the International Date Line, such as banks in Guam and the Northern Mariana Islands. They are not fully exempt. They get alternate deadlines: the end of the settlement date for entries received after 8:00 a.m. local time, or 9:00 a.m. on the next banking day for entries received after processing is complete on the settlement date.

Same Day ACH credits have their own availability deadlines, shown in the table in the next section.

Same Day ACH windows, cutoffs and limits

Same Day ACH lets an entry settle between banks on the day it is sent instead of on a later banking day. It is faster settlement, not instant payment. Entries still travel in batches and settle in set windows, so Same Day ACH is not a real-time system like the RTP network or FedNow. A same-day entry can also be returned under the usual return rules.

As of October 2026, Same Day ACH has three processing windows each banking day, shown in the table below. The third window started on March 19, 2021. Counting the 8:30 a.m. ET settlement for standard entries, ACH now settles four times a day. To settle the same day, an entry must meet a same-day deadline and must not carry a future effective date.

As of October 2026. These are ACH Operator deadlines, not your provider’s cutoff. The funds availability column applies to Same Day ACH credits; RDFIs in the Atlantic time zone may use Eastern Time for the 1:30 p.m. and 5:00 p.m. deadlines.

Why your provider’s Same Day ACH cutoff times are earlier

The FedACH deadline is the moment the Operator must have the ODFI’s file. Before then, the ODFI has to receive entries from its customers, process them and send its own file, so it sets an earlier cutoff for the entries it accepts. If a provider sits between your platform and the ODFI, its cutoff can come earlier still.

Plan same-day flows around the cutoff your provider gives you, not the Operator schedule. An entry that misses the cutoff for the last window cannot settle that day.

The Same Day ACH limit: $1 million now, $10 million in 2027

As of October 2026, the Same Day ACH limit is $1 million per payment, in effect since March 18, 2022. Nacha has approved raising it to $10 million per payment, effective September 17, 2027.

The limit has risen in steps. Same Day ACH launched for credits on September 23, 2016, with a $25,000 limit per payment, and same-day debits followed in 2017. The limit rose to $100,000 on March 20, 2020, and then to $1 million. Nacha lists invoice and tax payments, payroll funding and cash concentration among the expected uses of the higher limit.

What cannot go same day, and what it costs

International ACH Transactions (IAT) and Automated Enrollment Entries (ENR) cannot be sent as Same Day ACH. For each same-day entry, the ODFI pays the RDFI a Same Day Entry Fee. The 2016 rule that launched Same Day ACH set it at 5.2 cents per entry, and as of October 2026 the amount is unchanged. A sponsor bank or processor may pass the fee on to your platform. Our guide to ACH processing fees, including the Same Day Entry Fee explains how this and other ACH costs reach your platform.

Where platforms use Same Day ACH

Same Day ACH helps when a payment has to settle on a particular day. Common examples are payroll, bills paid close to their due date and urgent business-to-business payments. If your customers send or pay invoices, see how bank payments fit into B2B invoicing software.

ACH returns in brief

Settlement is not always final. The RDFI can send an entry back as a return, with a reason code, for reasons such as insufficient funds, a closed account, an invalid account number or an account holder saying the debit was not authorized.

As of October 2026, most returns must reach the ODFI by the opening of business on the second banking day after the settlement date of the original entry. That two-banking-day window also covers R29, the code used when a business account holder says a debit was unauthorized.

Consumer accounts get much longer. An unauthorized debit to a consumer account can be returned for 60 calendar days after the settlement date, using R05, R07, R10 or R11 with a Written Statement of Unauthorized Debit (WSUD) from the account holder. This Nacha window is separate from the error-reporting period under Regulation E.

Because of these windows, your platform has to handle returns that arrive after a debit settles. Our guide to ACH return codes and what to do with each covers the codes and deadlines in detail.

Where a software platform fits

Nacha calls any party that performs ACH processing functions for another party a Third-Party Service Provider (TPSP). A Third-Party Sender (TPS) is a TPSP that sends entries for an Originator that has no direct agreement with the ODFI.

A platform that holds the ODFI agreement and sends entries for its customers is a Third-Party Sender. If its customers hold the bank agreement, it is a Third-Party Service Provider. If it sends through another Third-Party Sender, it is a Nested Third-Party Sender. Which applies depends on whose name is on the bank agreement.

In each case, your customers are the Originators, not your platform. The role matters because it decides your duties. Since September 30, 2022, each Third-Party Sender must do its own ACH risk assessment and cannot rely on another party’s assessment or Rules Compliance Audit, and Nested Third-Party Sender relationships must be disclosed.

To see whether Nacha’s fraud monitoring rules cover your platform, read our guide to Nacha fraud monitoring rules for software platforms. If you are not sure which role fits your platform, agree on it with your provider and the ODFI before you build.

How big the ACH Network is

Nacha’s full-year figures for 2025, published January 29, 2026, show the ACH Network processed 35.2 billion payments worth $93 trillion. That was up nearly 5% in volume and almost 8% in value over 2024. Business-to-business payments grew almost 10% to close to 8.1 billion.

Same Day ACH carried 1.4 billion payments worth $3.9 trillion in 2025, up 16.7% in volume and 21.4% in value from 2024. Same-day volume has roughly doubled since 2022, when it was 697.5 million payments.

The growth continued into 2026. In Q2 2026 the ACH Network handled 9.3 billion payments worth $25.9 trillion, up 6.2% and 11.1% from a year earlier, and consumer internet-initiated (WEB) payments passed 3 billion in a quarter for the first time.

What’s next for ACH rules

Since January 1, 2026, a Banking Day in the Nacha rules means a day the ACH Network is open, with no reference to whether an individual bank is open. Nacha has now issued a Request for Comment, with comments due October 23, 2026, that proposes defining a Banking Day as any calendar day other than a Saturday, a Sunday or a US federal banking holiday, with a proposed effective date of June 18, 2027. The proposal says settlement would still occur when an ODFI or RDFI is closed.

As of October 2026, this is a proposal, not an adopted rule. The other dated change in this guide is already approved: the Same Day ACH limit rises to $10 million per payment on September 17, 2027. Check the rule source or ask your provider for the current status before you build around either date.

Sources

1. Nacha, How ACH payments work
2. Nacha ACH Developer Guide, How ACH works
3. The Clearing House, ACH (EPN)
4. Federal Reserve Financial Services, FedACH processing schedule
5. Nacha, Same Day ACH: moving payments faster (Phase 1)
6. Nacha, Raising the limit to $10 million reflects demand for Same Day ACH
7. Nacha, Providing faster funds availability
8. Nacha, Funds availability requirements for non-Same Day credit entries
9. Nacha, Third parties in the ACH Network
10. Nacha, Third-Party Sender roles and responsibilities
11. Nacha, Risk management topics (October 1, 2024)
12. Nacha, Differentiating unauthorized return reasons
13. Nacha, Request for Comment: definition of the term Banking Day
14. Nacha, Same Day ACH and B2B payments propel ACH Network volume growth in 2025
15. Nacha, Large gains in Same Day ACH help drive the ACH Network in Q2 2026