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How long does an ACH transfer take?

A small business owner leaning towards her laptop to send an ACH transfer to a vendor.

If you’re looking into ways to transfer money online, ACH transfers likely came up as an affordable and reliable option. But you’ve probably also realized it may not be the fastest payment method.

With same-day or even instant payment options, you may be wondering why ACH payments, which take a few days to process, are gaining so much traction.

In this article, we’ll discuss ACH payment processing time and ACH cutoff time. We’ll also quickly walk you through what ACH means and what the payment process looks like.

Let’s dive right in! 

💡ACH can take up to 3 business days

ACH payment processing time: key takeaways

  • The value of ACH is derived from its low price and reliability but speed isn’t its strong suit.
  • A standard domestic ACH transfer takes one to three business days to process.
  • Fast ACH options, delivered on the same day, are available for a higher fee. 
  • International ACH payments can take up to five business days.

What is ACH?

An ACH payment is a type of electronic funds transfer (EFT). In other words, it’s a way to digitally send money from one bank account to another using a network of banks and financial institutions referred to as automatic clearing houses (ACH).

The network is governed by a nonprofit organization called Nacha and overseen by the Federal Reserve, which functions as a central clearing facility (or ACH operator). Member institutions use the ACH network to communicate with each other, validate information, and, if all goes well, transfer money between bank accounts.

There are two main kinds of ACH: ACH credit and ACH debit. ACH credit is a standard bank transfer initiated by the payorPayorAll transactions have at least two players–the payor is the one who’s paying, and the payee is the one who receives the payment.. ACH debit is initiated by the payeePayeeAll transactions have at least two players–the payor is the one who’s paying, and the payee is the one who receives the payment. who sends a request to withdraw funds from the payor’s account, assuming they gave prior permission. This is useful when you have recurring payments to the same recipient with varying sums, for example, utility bills. 

Thanks to the low cost and safety measures enforced by Nacha and the Fed, businesses are increasingly choosing ACH for business-to-business (B2B) transactions. In fact, over the past ten years, the volume of ACH payments between businesses more than doubled, from $26.6 trillion in 2014 to $54.2 trillion in 2023.

How does ACH work?

Every ACH transfer starts when a payment is initiated by either the payor (if it’s an ACH credit) or the recipient (for ACH debit). 

The money and an ACH data file then move through the ACH network.

Once the ACH operator validates the information, the money is sent to the recipient’s bank and deposited in their account.

How long does ACH take?

Speed, or lack thereof, is one of the main disadvantages of ACH payments compared to wire transfers, which arrive on the same business day. So, why not just choose wires every time? It all comes down to cost. Wires are quick but expensive while ACH is slow and steady but much more affordable.

An illustration showing processing times for the various kinds of ACH.

How long does it take for ACH to clear, you ask? Well, a standard ACH transfer within the U.S. takes between one and three business days. Both ACH credit and ACH debit work within this time frame.

An international ACH transfer can take up to five business days to complete. 

ACH cutoff times vary depending on your bank or payment service so be sure to check the terms in advance if you’re on a schedule.

Are there faster ACH options?

Until recently, the only way to send urgent payments was with a wire, which is typically much more expensive, costing up to $30 in fees for every transaction. This makes wires a far less viable option for everyday payments, especially for small businesses that need to make every penny count to preserve cash flow.

Over the past few years, fast ACH has become a common alternative offering same-day payments at a more affordable price. It’s especially attractive for lower-value transactions as the fee for fast ACH is often calculated as a percentage of the total sum, not a flat fee.

The average cost of ACH transfers

The fees for ACH payments vary greatly depending on your bank or payment platform. 

Here’s what the various kinds of ACH typically cost: 

  • Standard ACH: up to $1.5
  • Fast ACH: 1%-2% of the transaction
  • International ACH: 1.5%-2% of transaction

When to choose ACH payments

We’ve already covered that ACH payments aren’t the fastest payment option out there. Still, their reliability and competitive pricing make them a great choice for: 

  • Less urgent payments
  • Paying vendors and suppliers
  • Rent and utilities
  • Other recurring payments
  • Lower-value international or fast payments

Send ACH payments to your vendors and suppliers

Now that you know how long ACH transfers take, you can make the right choice for your business payments every time. For a smart and cost-effective B2B payment solution, use Melio to send ACH bank transfers to all your vendors and suppliers.

Don’t have an account? Sign up for Melio today!Start now

*This blog post is intended for informational purposes only and is not intended as financial advice.
**Melio does not provide legal, tax or accounting advice, and you should consult with a professional advisor before making any financial decisions.