What is Same-Day ACH?
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:
ACH
ACH (Automated Clearing House) is a payment processing network that’s used to send money electronically between banks in the United States.