What is the ACH?

The Automated Clearing House (ACH) was formed in 1978 to provide a nationwide network for distributing electronic transactions. The National Automated Clearing House Association (NACHA) has 23 participating regional associations, all of which use the same format for ACH transactions. Since all financial institutions are required to accept ACH, transactions can be posted to any bank, credit union, or savings and loan within the Federal Reserve System. Almost 8 billion transactions representing over $22.2 trillion flowed through the ACH system in 2001. Over 115 million people used direct deposits for payroll or government benefits. More than 80 percent of large companies with more than 100 employees offer Direct Deposit to their employees.