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Why use ACH instead of wire transfer?

The biggest reason to use ACH instead of a wire transfer is cost. ACH payments are usually much less expensive than wires.

Another benefit of ACH is additional security. Whereas wire transfers move directly between banks, ACH payments pass through a clearing house before reaching the final recipient’s bank. This process means that ACH payments can take longer than wire transfers to clear—wire transfers usually clear within a day (and often within minutes) whereas ACH can take 2-5 days.

This additional time can be useful for catching errors or fraud. Wire transfers also cannot be returned or reversed, whereas ACH payments can.

Further, ACH payments can be either credit or debit—wire transfers, on the other hand, are only available for sending money (a credit).

Traditional ACHWire

Cost per payment

$0.20 - $1.50

$25 - $50


2-5 business days

1 day or less


Allows returns and reversals

No returns or reversals

Payment Direction

Credit and Debit

Credit only

Image for an example ACH payment

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ACH (Automated Clearing House) is a payment processing network that’s used to send money electronically between banks in the United States. It allows for automated, electronic debiting and crediting of both checking and savings accounts.

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Direct deposits (an ACH credit often used for payroll) and automatic recurring payments (ACH debits for services like utilities) are common examples of ACH payments.

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No, ACH and Zelle are not technically the same thing, although Zelle utilizes the ACH network. Basically, all Zelle payments are (instant) ACH payments but not all ACH payments are Zelle payments.

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Whereas an ACH payment can be either a credit (adding money) or debit (withdrawing money), direct deposit is always an ACH credit payment.

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Most US banks and other FIs (financial institutions) including credit unions allow ACH transfers.

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The maximum ACH transfer limit varies depending on your financial institution and account type. Potential limits range from $3,500 per day (Bank of America) to $25,000 per day (JPMorgan Chase) for personal checking and savings accounts.

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