How to Make an ACH Payment to Another Bank
Navigate the process of making ACH payments between banks. Understand how to securely and accurately transfer funds.
An Automated Clearing House (ACH) payment is an electronic transfer of funds between bank accounts, operating through a dedicated network. This system serves as a common method for moving money, often between different financial institutions, providing a reliable and cost-effective alternative to traditional paper checks or more expensive wire transfers. Many everyday financial activities, such as direct deposit of paychecks or automatic bill payments, utilize this efficient network.
Information Needed for ACH Payments
Precise information from the recipient is necessary to initiate an ACH payment. The recipient’s full name, as it appears on their bank account, ensures funds are directed correctly. The recipient’s bank name identifies the financial institution.
The recipient’s bank routing number is a nine-digit code that uniquely identifies their financial institution within the United States banking system. This number is found at the bottom of a check (first set of numbers) or on the bank’s official website. The recipient’s account number, specific to their checking or savings account, is needed for accurate fund placement. This number is obtained directly from the recipient, as it is not printed on checks.
The recipient’s account type (checking or savings) is necessary for correct processing. This distinction helps the receiving bank categorize and apply the incoming funds appropriately. Accuracy across all these details is essential; even a single incorrect digit can lead to delays, misdirected funds, or payment rejection.
Initiating an ACH Payment
Once recipient banking details are collected, initiate an ACH payment through your bank’s digital platforms. Most financial institutions offer the ability to send these payments directly via their online banking portals or mobile banking applications. While various third-party payment services may utilize the ACH network in the background, the most direct approach involves your primary bank account.
To begin, log into your personal bank account using either the online portal or the mobile application. From there, navigate to a section commonly labeled “Transfers,” “Payments,” or “External Accounts,” as the exact terminology can vary between banks. Within this section, you will find an option to “Add External Account” or “Send to Another Bank” to set up a new recipient.
Input the recipient information into the designated fields. This includes the recipient’s bank name, routing number, account number, and the account type. After entering these details, specify the amount to send and select a payment date, which can be a one-time transfer or a recurring schedule. Before finalizing the transaction, review all entered information for accuracy. Confirming the payment will submit the transfer request to your bank.
Understanding ACH Processing and Confirmation
After an ACH payment has been initiated, the funds do not transfer instantaneously, unlike some other payment methods. Standard ACH processing takes one to three business days for funds to become available in the recipient’s account. This timeframe excludes weekends and federal holidays, as the network primarily operates on business days. Banks also have daily cut-off times; payments initiated after this time begin processing on the next business day.
Senders receive confirmation through various channels, such as email notification or online transaction history. The recipient will observe the funds appearing as a credit on their bank statement once the transfer is complete. While many banks offer outgoing ACH transfers with no or very low fees, some may apply a small charge, typically $0.20 to $3.00 per transaction. Check with your bank regarding any applicable charges.