An ACH transfer is an electronic transfer of funds from one bank account to another over the Automated Clearing House (ACH) network. It is a way to transfer money between bank accounts, rather than going through card networks or using wire transfers, paper checks, or cash. ACH transfers are processed by a network operator in batches only seven times a day, unlike the real-time processing of wire transfers. ACH transfers include external funds transfers, person-to-person payments, bill payments, and direct deposits from employers and government benefit programs. There are two main categories of ACH transactions: direct deposits and direct payments. Direct deposits are used for payments from businesses or the government to a consumer, particularly for payroll, as well as government benefits, tax refunds, interest payments, and more. Direct payments are initiated by the payer and include payments such as direct deposits, payrolls, retail payments, and vendor payments. ACH direct debit collections are initiated by the payee with pre-authorization from the payer; ACH direct debits include consumer payments such as utility bills, insurance premiums, mortgage loans, and other types of bills. ACH transfers can be more cost-efficient and user-friendly than writing checks or paying with a credit or debit card, and they are often free, depending on where you bank and the type of transfer involved.