What is an ACH transfer?

An ACH transfer refers to any electronic movement of money between different financial institutions that goes through the Automated Clearing House (ACH) network, one of the biggest U.S. payment systems that has been around for almost 40 years. ACH transfers are commonly used for online bill pay, direct deposit, and transferring funds between financial institutions. For example, PayPal and Venmo, both use the ACH network. ACH transfers are more convenient and less expensive than wire transfers, which typically incur fees from both the sending and receiving financial institutions.