ACH credits and debits explained
The Automated Clearing House quietly moves trillions of dollars a year between US bank accounts. Here is how it works and which routing number it expects.
What ACH actually is
The Automated Clearing House is an electronic network operated jointly by the Federal Reserve and a private cooperative called The Clearing House. It batches together routine, low-value-per-transaction payments — payroll direct deposits, recurring bill payments, tax refunds, vendor payments, person-to-person transfers, and so on — and settles them between member banks once or twice per business day. ACH is the system behind almost every electronic payment in the US that isn't a card swipe or a Fedwire transfer.
An ACH transaction is either a credit (someone pushing money into your account, like a payroll deposit) or a debit (someone pulling money from your account, like an automatic mortgage payment). Both rely on the same nine-digit ABA routing number — the one printed on your checks and listed on this site.
Same-day ACH
Until 2016, ACH transactions settled overnight, which is why an ACH bill-pay you scheduled on Monday wouldn't hit your biller until Tuesday or Wednesday. The system has since added same-day ACH windows that allow funds to settle within hours, provided the originator releases the file before the cutoff (currently three settlement windows per business day, with the last cutoff at 4:45 p.m. Eastern). Same-day ACH carries a small per-transaction surcharge that the originator usually absorbs, and not every bank supports it for every transaction type.
Why ACH is reversible
Unlike a Fedwire payment, an ACH transaction can be reversed if it was sent in error or without authorization. The receiving bank has up to 60 days for consumer accounts (and as little as 24 hours for some business accounts) to dispute and return a debit. This is why merchants treat ACH e-checks more cautiously than card payments: the funds can disappear from their account weeks after a sale closes.
Which routing number to give your originator
For all ACH purposes — direct deposit, bill-pay, IRS refunds, Venmo and Zelle linkage, brokerage transfers — give the originator the ABA routing number tied to the bank where you opened the account, plus your full account number. If you have multiple accounts at the same bank, the routing number is usually identical across all of them; only the account number changes.
For credit unions, the routing number is the credit union's own ABA number. If your credit union belongs to a shared-branching network, do not use the network's routing number for ACH; the originator will be unable to find your specific account.
What can go wrong
- Insufficient funds — an ACH debit attempted against an account without enough balance is returned with an "R01" code; your bank typically charges an NSF fee, and the originator may also charge a returned-payment fee.
- Wrong routing number — the receiving bank rejects the entry with an "R03" or "R04" code and returns it to the originator within 1–2 business days.
- Closed account — entries are returned with "R02" and stop recurring after the first attempt.
- Unauthorized debit — consumers can dispute and reverse with their bank, who returns the funds and recovers them from the originator.
Limits and rules
The standard ACH per-transaction limit is $1,000,000 for same-day ACH and is unlimited for next-day ACH, though most banks impose their own customer-level caps far below that. Recurring debits must be authorized in writing or by recorded phone call under NACHA rules, and the originator must be able to produce that authorization on demand for at least two years.