What Does the "ACH Memo" Entry Mean on a Bank Statement?

ACH is short for Automated Clearing House and is a widely used national system to process electronic fund transfers. The network serves thousands of financial institutions, including the Federal Reserve and credit card companies such as Visa. ACH transactions are not the same as wire transfers as they do not have immediate funds transmittal. Funds for ACH transactions usually take at least 24 hours for funds availability if a credit or funds removal if a debit.


Administration of the ACH network is by the National Automated Clearing House Association or NACHA, which is the electronic payment association responsible for operating rules, enforcement and risk of the ACH clearing system. NACHA works closely with the Federal Reserve and the Department of the Treasury on regulatory matters, and common belief is that the ACH system is one of the safest ways to transfer money.

Common Credits

A transaction entry of "ACH memo" in an account is either an electronic debit or credit determined by the positive or negative money value on the memo. Common ACH deposits are Social Security payments, payroll, government benefits and tax refunds. Banks will differ in how an ACH transaction actually reads on a statement, in that one bank transaction may state "ACH memo" and another may state "Social Security" for the same type of transaction. The posting description depends on how the individual bank receives the ACH.

Common Debits

With electronic fund transfers gaining popularity, many people are using ACH for payment of their bills. It is actually cheaper for a bank to process items through ACH than it is to process paper checks, which is why so many web bill pay services offered by financial institutions have no fee associated with the service. Frequent use of ACH occurs in business-to-business and e-commerce transactions for the same reasons.

Memo Specific

If the term “ACH memo” appears on a statement with no other description, it is possible that an error occurred in the bank processing of the ACH file and manual posting of the entry occurred instead of electronic. If a bank customer sees this transaction description and the amount is correct, then no problem has occurred. If the expected transaction amount appears to be incorrect, it would be prudent to contact the financial institution for an explanation of the transaction.