Rules for an ACH Debit

You can transfer funds from your bank account to an account owned by another person or entity if you set up an ACH, or Automated Clearing House, debit. These electronic transfers are processed more quickly than other types of transactions, bu,t as with transactions involving checks and cash, ACH debts are subject to certain rules and regulations.

Account Number

In an ACH debit transaction, the party receiving the money must initiate the transfer. This means the recipient must have your account number and the routing number of your bank. Routing numbers are special codes assigned to banks by the American Banker's Association. The routing number serves as an identifier, and the recipient's bank uses it to locate your bank. Clearing houses act as intermediaries during debit transactions, and a bank or clearing house will reject a transaction that involves a missing or incorrect account or routing number.


Under federal regulations, ACH transfers are next day availability items. This means that when you authorize a debit from your account, the recipient's bank must credit those funds to the recipient's account no later than the business day following the day of the transfer. Many banks actually credit electronic transfers the same day the transfer occurs. By comparison, banks can place deposit holds on transactions involving checks and other types of negotiable instruments. ACH transactions are processed similarly to cash.


While check deposits are subject to holds, businesses can convert your check payments into ACH debits. The check recipient scans the item to record the amount of the check, the account number and your bank's routing number. The check payee's bank then receives that information and uses it to complete the payment electronically. The check payee can destroy the physical check or even give it back to you once the payment has been converted into electronic form.

Regulation E

ACH debits are subject to federal Regulation E which governs electronic transfers. Under Regulation E, you have the right to dispute unauthorized debits by completing a fraud affidavit. You must file the dispute within 60 calendar days of receiving the bank statement that first listed the disputed charge. Your bank must investigate the dispute, and you receive a full refund if your dispute claims are upheld. Prior to a disputed charge posting to your account, you also have the option of placing a stop payment on an ACH transaction. A stop payment remains in place for six months. Your bank may assess a fee for placing the stop payment.