How Long Do ACH Transfers Take? Speed & Timing Explained

An ACH (Automated Clearing House) transfer is a type of electronic payment where funds are moved from one financial institution to another through the ACH network. Governed by the National Automated Clearing House Association (NACHA), the ACH Network links United States-based financial institutions and facilitates transfers between these institutions. ACH payments are commonly used for payroll, bill payments, loan payments, and government benefits. 

In this article, we will take a deep dive into ACH processing time, as well as tips to speed up your transfer.

• Standard ACH transfers typically take between 1 to 3 business days to be processed. ACH debit transfers are processed quicker than credit transfers.
• Same-Day ACH is available for urgent payments, but it comes with a processing fee higher than the standard transfer.
• Wire transfers have a faster processing time than ACH transfers. However, ACH transfers are still more secure.

How long do ACH payments take to clear?

The typical ACH transfer time takes 1-3 business days to process. However, the exact processing time may vary depending on factors such as the time or day the transfer was requested, holidays, errors, and the type of transfer.

• Time or day of transfer: ACH payments are processed in batches. This means that transfers initiated outside banking hours are usually processed on the next business day, including those made on weekends and holidays.
• Errors: Issues concerning account details verification or insufficient funds may result in payment returns, causing further delays to your ACH transfer.
• Type of transfer: ACH credit transfers, or “push” transactions, take longer to process than ACH debit transfers, or “pull” transactions. This is because the NACHA requires debit transactions to be processed within one business day.

Here’s a detailed explanation of how ACH debit transfers are processed at most banks:

1. You submit an ACH file to your bank, which must include the other party’s bank account number and routing number. Your bank processes it and sends it to the ACH Network.
2. The file is available to the RDFI. After they receive it, the funds are credited from the RDFI.
3. If there is a problem, the RDFI must notify the ACH Network within 48 hours of the transaction date.
4. As soon as the ACH Network sends a notification detailing a problem, your bank may contact you. If there’s no problem, the funds are debited to the ODFI.

The ACH Network processes payments for 23¼ hours each banking day, settling payments four times during that period.

The involvement of so many parties is one of the reasons ACH payment processing is a bit slower than other payment methods. Payment data is sent to the ODFI, which then sends it to the Federal Reserve. Once the Federal Reserve receives and processes the data, it sends the ACH transaction to the RDFI.

Unfortunately, instant ACH payments are not possible. However, Same-Day ACH transfers are available if you wish to accelerate the transfer time. While not exactly instant, the funds will arrive within a few hours on a business day. This option comes with a fee that’s higher than the standard ACH transfer.

ACH transfer vs Wire transfer — Which is faster?

Wire transfers are faster than ACH transfers. Domestic wire transfers are usually cleared in less than 24 hours after initiating the payment, as compared to ACH payments, which take 1 to 3 business days to process. 

Basically, when it comes to processing time, wire transfers are superior. However, it’s important to consider the pros and cons of each payment type before making a decision. Below is a summary of the differences between ACH transfers and wire transfers:

What’s the average ACH transfer fee?

The flat fee for both ACH debit and credit transfers ranges from $0.20 to $1.50 per transaction. On the other hand, the percentage fee per transaction is between 0.5% and 1.5%.

Besides the flat fee and percentage fee, there are other types of ACH fees you should be aware of. For example, if a customer disputes a transaction, you will be charged a chargeback fee.

Can you track an ACH payment?

You can track an AHC transfer using a 15-digit trace ID. Each AHC transaction is assigned two trace numbers – one for the sender and another for the receiver. If you are the recipient, you’ll need to obtain the trace ID from the sender and contact your bank with that information. If you are the sender, you can reach out to your bank directly. They may also ask you to confirm details such as the date of transaction and the amount sent.

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Best Practices for ACH Transfers

While there’s no option to expedite an ACH transfer, there are ways to ensure a smooth transaction and avoid further delays:

• Ensure accurate account information: Double-check and verify that the account details you provided are correct to avoid verification issues.
• Schedule appropriately: Plan the day and time to initiate your ACH transfer, ideally during business hours. Remember to take account for weekends and holidays.
• Confirm that you have sufficient funds: Making an ACH transfer with insufficient funds may result in payment returns, causing delays in your transaction.

Wrapping Up: ACH Transfer Time Insights

Due to their convenience and notably low processing fees, ACH transfers are an excellent way to move funds electronically between banks in the United States. While ACH transfers may take longer than other forms of payment they’re still one of the most secure payment methods, especially when compared to alternatives like wire transfer. For urgent payments, Same-Day ACH is available. However, if you opt for the standard transfer, you can make the whole process smoother by planning your transfer schedule and ensuring accurate account information.