what is a ach deposit

An ACH deposit is a type of electronic funds transfer made into a consumers checking or savings account from their employer or a federal or state agency. ACH stands for Automated Clearing House, which is the inter-bank system used by over 12,000 member institutions to coordinate funds transfer requests between bank accounts under their control. Direct deposits are most commonly made by businesses in the payment of salaries. ACH transfers have made paper checks obsolete and are typically received in 1-2 business days. Direct deposit via ACH is a simple wire transfer that is a great option for small businesses to save money and pay employees expeditiously. ACH direct deposits allow companies to pay their employees directly to their bank accounts, eliminating the need for paper checks. The most common types of ACH direct deposits include salary payment, tax returns, and government benefits.