Automated Clearing House (ACH) is an electronic funds transfer system commonly used in the United States. The ACH network is operated by the Federal Reserve and facilitates the transfer of funds between banks, credit unions, and other financial institutions. ACH transfers are often used for direct deposit of payroll, government benefits, and tax refunds, as well as for automatic bill payments.
ACH transactions are typically more cost-effective and efficient than traditional paper-based transactions like checks. They are also more secure, reducing the risk of fraud and errors. However, ACH payments can take several days to clear, so they are not ideal for urgent transactions.
Overall, the ACH system is an important part of the U.S. financial infrastructure, facilitating the movement of funds between individuals and businesses across the country.