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Same-Day ACH is an improvement to the ACH network that allows the processing of credit, debit, and return transactions several times a day. The Originating Depository Financial Institutions (ODFIs) can send and settle Same-Day ACH transactions to accounts at any Receiving Depository Financial Institution (RDFI).
In 2015, as a result of customer demand and lobbying from industry experts, NACHA added more windows to provide faster, same-day processing and settlement for ACH transactions. Until then, ACH transactions traditionally took 2 - 3 days to process. Dive deeper into how ACH works with this guide.
What are the Use Cases for Same-Day ACH?
NACHA outlines 63 potential use cases for Same-Day ACH. Notable use cases include the following:
- Payroll—faster payroll payments for hourly or temporary workers, and faster options for off-cycle payments such as bonuses or emergency payments
- Urgent claims payments and refunds—quick payout of insurance claim payments, disaster assistance payments, and other rebates, refunds and reimbursements
- Bill Payment—faster payment of bills on or after the due date
In 2021, over 600 million transactions and over $900 billion were processed over Same-Day ACH (Source).
What are the Cutoff Times and Transaction Limits?
Financial institutions submit ACH transactions to the clearing house in bulk, multiple times a day. With Same-Day ACH those transactions are submitted and expedited in batch for processing that day.
Effective March 19, 2021, Same-Day ACH operating hours were extended by 2 hours. Now an ODFI can submit Same-Day files by 4:45 p.m. Eastern Time (1:45 p.m. Pacific Time) for same-day processing.
Each ODFI can institute additional cut-off times for customers so payments are submitted on time.
On March 18, the limit for Same-Day ACH was raised from $100,000 to $1,000,000 per transaction to offer flexibility and more use cases. With this expansion the ACH Network now settles payments four times per business day. The increase in dollar amount will contribute to adoption of Same-Day ACH by businesses and consumers as a safe and secure way to move money.
How does Same-Day ACH Compare to Other Payment Types?
| Payment method | Cost per payment | Settlement time | Payment direction | Bank coverage |
|---|---|---|---|---|
ACH | $0.20 - $1.50 | 2-3 business days | Credit & Debit | Every Bank |
Same-Day ACH | $1 - $5 | Same business day | Credit & Debit | Every Bank |
Wire Transfers | $25 - $50 | Within minutes | Credit | Most Banks |
RTP | $0.25 - $1 | Instant | Credit | Some Banks |
To learn more about ACH, timing, and speed, check out these articles:
Learn
ACH (Automated Clearing House) is a payment processing network that’s used to send money electronically between banks in the United States.
ACH APIs enable companies with high transaction volumes to write software that automates payments over the ACH network.
An ACH credit refers to the process of electronically depositing, or “pushing,” funds into a bank account using ACH.
In an ACH debit, funds are electronically withdrawn, or “pulled,” from a bank account using ACH.
A Notification of Change (NOC) is used to notify the sender of an ACH payment to correct or change information related to a customer’s bank account.
A return is a credit or debit entry initiated by the Receiving Depository Financial Institution (RDFI) that returns a previously originated payment to the Originating Depository Financial Institution (ODFI).
ACH return codes identify the reason an ACH payment was returned by the recipient's bank. They make it easier to spot and resolve payment failures.
An ACH reversal refers to an erroneous ACH payment that a payment originator requests to take back, or reverse.
Credits and debits are two kinds of ACH transactions. Whereas a credit involves depositing, or “pushing,” funds into a bank account, for a debit, funds are withdrawn, or “pulled,” from an account.
FedACH is the automated clearing house (ACH) service of the Federal Reserve Banks.
Part of the FedACH system, FedGlobal ACH offers low-cost and efficient cross-border ACH payments.
The two kinds of financial institutions in the ACH network are ODFIs (Originating Depository Financial Institution) and RDFIs (Receiving Depository Financial Institutions).
A Standard Entry Class or SEC code is a three letter code that describes how a payment was authorized by the consumer or business receiving an ACH transaction.
US companies moving money internationally will likely weigh the pros and cons of SWIFT vs. Global ACH when it comes to attributes like speed and cost.
Payment rails are the underlying systems and networks that facilitate the movement of funds between parties in financial transactions.
ACH (Automated Clearing House) is a payment processing network that’s used to send money electronically between banks and financial institutions in the United States.
An electronic funds transfer (EFT), also known as a direct deposit, is the digital transfer of money between bank accounts. As digital transfers, they reduce the need for manual input and paper documents.
Global ACH can help companies move money from US-domiciled accounts across borders using local rails. Learn how and when to use this payment rail.
A Request for Payment (RFP) is an ACH Network message that can be used by businesses to send electronic invoices to their customers.
Same-Day ACH is an improvement to the ACH network that allows the processing of credit, debit, and return transactions several times a day.
A pre note or prenotification is a zero dollar payment to validate the account and routing details of a bank account before debiting or crediting it.
An International ACH Transfer—also known as Global ACH—is an ACH payment made cross-border from a US-domiciled account.