what is an 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. ACH direct deposits are most commonly used for payroll, tax returns, government benefits, bonuses, reimbursements, and other employee payments. When making a direct deposit by means of electronic funds transfer, the payer normally enters reference information to make it easy for the payee to recognize who made the deposit and which account to credit. The direct deposit facility is often better known by country-specific payment systems used to action these payments such as the ACH Network in the United States. Direct deposit via ACH is a simple wire transfer that is typically received in 1-2 business days.