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ACH (Automated Clearing House)

Banking

An electronic network for financial transactions in the United States that processes large volumes of credit and debit batches.

ACH (Automated Clearing House) is a computer-based electronic network for processing transactions, usually domestic low-value payments in the US.

Common Uses:

  • Direct Deposit: Payroll, tax refunds, and social security payments.
  • Direct Payment: Paying bills (utilities, loans) directly from a bank account.

While SWIFT is used for international wires, ACH is the primary system for domestic transfers within the US. It is typically slower than a wire transfer (taking 1-3 business days) but is much cheaper or even free for the user.

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This definition of ACH (Automated Clearing House) is part of our comprehensive financial and accounting processing glossary. Understanding banking terms is crucial for accurate bookkeeping, auditing, and automated data entry workflows. If you regularly work with PDF bank statements or financial documents, consider using SmartBankStatement's professional converter to securely extract, validate, and reconcile your transaction data into Excel or CSV format effortlessly.