ACH Credit

ACH credit is a type of electronic payment that pushes money into a recipient’s bank account through the Automated Clearing House (ACH) network. It works like a digital check—without the paper—allowing one party to deposit funds directly into another’s account.

What Is ACH Credit

An ACH Credit is an electronic payment method that allows a sender to transfer funds directly into a recipient's bank account using the Automated Clearing House (ACH) network. Unlike ACH Debit, where the recipient pulls money from the sender’s account, ACH Credit is a “push” transaction — the payer initiates and authorizes the payment. 

Common examples include direct deposit of salaries, government benefits, and business-to-business payments. It’s a secure, cost-effective alternative to paper checks and wire transfers, typically taking one to two business days to process.

How Does ACH Credit Work

In ACH payments, ACH credit is a type of electronic bank-to-bank payment made through the Automated Clearing House (ACH) network in the U.S. It’s commonly used for direct deposit of payroll, government benefits, vendor payments, and tax refunds.

Here’s how it works:

1. Payment Initiation

The payer (originator)—usually a business, government agency, or bank customer—initiates the payment by submitting an ACH credit request to their financial institution.

2. Originating Bank Sends Funds

The payer’s bank, called the Originating Depository Financial Institution (ODFI), sends the payment instruction to the ACH network.

3. ACH Network Processes

The ACH network batches the transaction with others and delivers it to the Receiving Depository Financial Institution (RDFI)—that is, the payee’s bank.

4. Funds Delivered

The payee (receiver) sees the funds deposited into their bank account, usually within 1–2 business days. Some banks also offer Same Day ACH, where funds arrive the same day.

What Is the Fee for an ACH Credit

The fee for an ACH credit depends on who is initiating the payment and which bank or payment processor is used. Here’s a quick breakdown:

For Businesses (Sending ACH Credits):

• Typical fee: $0.20 to $1.50 per transaction
• Monthly fee (if any): Some banks charge $5 to $25/month for ACH services
• Same Day ACH: May cost extra—around $1 to $2.50 per transaction

Businesses usually pay these fees when sending payroll, vendor payments, etc.

For Individuals (Receiving ACH Credits):

• Usually free. If you're receiving money (like a paycheck, refund, or government benefit), there’s typically no fee.

Example:

If a company sends 100 ACH credit payments for payroll:

• Cost could be $50 to $100 total for that batch, depending on the provider and whether it's standard or same-day.

What Is the Difference Between ACH Credit and ACH Debit

Here's a clear breakdown of the difference between ACH credit and ACH debit:

ACH Credit = You Push Money

• Who initiates it? The payer (originator)
• How it works: You tell your bank to send money to someone else.
• Example:
  
  
  
  • Your employer sends your paycheck to your bank account.
  • You pay a vendor or a freelancer via your business bank account.

You’re pushing money from your account to another account.

ACH Debit = You Pull Money

• Who initiates it? The payee (receiver)
• How it works: You authorize someone to pull money from your account.
• Example:
  
  
  
  • A utility company pulls your monthly bill payment from your checking account.
  • You set up automatic payments for your mortgage.

You’re giving permission for someone else to pull money from your account.