ACH (Automated Clearing House) payments go through several stages, and while the funds may move quickly, settlement (the official transfer of funds between banks) can take up to 6 business days, especially in cases of risk review or reserve policies.
Standard ACH
Submission to Funding: 1–2 business days
Settlement Timeframe: Typically within 2–4 business days, but can extend to 6 days depending on:
Merchant risk profile
Transaction type
Underwriting/hold policies
Used for most routine business transactions like payroll, rent collection, and vendor payments.
Same-Day ACH
Submission to Funding: Same business day if submitted before cutoff (typically 2:45 PM ET)
Settlement Timeframe: Usually 1–2 business days, can still extend if manual review is required
Ideal for urgent transactions like corrections, refunds, or time-sensitive customer payments.
Detailed Timeline Example (Standard ACH)
| Day | Action | Status |
|---|---|---|
| Day 0 | Merchant submits ACH file | Initiation |
| Day 1 | File processed by ACH network | In transit |
| Day 2 | Funds debited from customer | Pending settlement |
| Day 3 | Risk checks/fraud monitoring | Holding period may apply |
| Day 4 | Funds available to merchant | Settled (if cleared) |
| Day 5 | – | Reserve review (if any) |
| Day 6 | Final settlement completed (if needed) | Fully settled |
? Note: Days are business days only. Weekends/holidays don’t count.
What Can Affect Settlement Time?
Merchant risk category
Type of goods/services
High-ticket or high-volume processing
New account/merchant status
Funding policies by payment processor (e.g., CSG Forte)