Same Day ACH Expansion and Limit Increases

Businessman completing bank transaction, Same Day ACH

As the volume of financial transactions increases through the Automated Clearing House (ACH) Network, the National Automated Clearing House Association (NACHA) continues to scale up its services to meet the demands of the market. NACHA recently announced the new dollar limit for Same Day ACH will now be $100,000. The increase quadruples the previous amount as Same Day ACH volumes continue to grow. Last year, there were 250.4 million Same Day ACH payments moving $247 billion. 

The new limit is expected to be even more useful for businesses and consumers, including direct deposit transactions for insurance claims and disaster relief. Now, 97 percent of all business-to-business payments are eligible for Same Day ACH compared to 91 percent under the $25,000 limit. Essentially, the limit increase will help with large dollar amounts that are time sensitive.

How Same Day ACH Works

When an ACH transaction is sent from one bank to another, there is a settlement window when the recipient bank has to process their backlog of digital instructions by a certain time every day. The window is the only time the originating bank can make sure the recipient bank has processed their ACH instructions. Prior to Same Day ACH, NACHA previously required one settlement window every day at 8:30 a.m. So, if you initiated an ACH credit at 9 am., you wouldn’t know the recipient bank processed it until the next business day.

Due to a major push from customers and the banking industry, NACHA decided to speed things up by implementing two new settlement windows:

  • Morning submission deadline at 10:30 a.m. EST = 1 p.m. settlement
  • Afternoon submission deadline at 2:45 p.m. = 5 p.m. settlement

With additional processing deadlines, it was finally possible to send a same-day transaction at 9 a.m. and have the request processed within the same day. 

Over the last five years, NACHA has worked in phases to transition financial institutions in the U.S. to process ACH credit and debit requests under $25,000 within all settlement windows. Banks are now required to make funds available by 5 p.m. local time for ACH credit transactions processed in the first two settlement windows. Funds for credit transactions went from a ‘pending’ status to being fully settled on the same day.

NACHA also announced a third Same Day ACH settlement window that expands processing by two hours. The new window will have a 4:45 p.m. submission deadline which will be extremely beneficial for West Coast financial institutions. That rule will go into effect on March 19, 2021. 

Benefits of Same Day ACH for Business

The new threshold for transaction amounts made by NACHA will help many companies improve their cash flow and allow for more same-day settlement of last-minute bill payments, such as medical insurance disbursements. The additional windows will also help companies settle invoices and pay freelancers, or other hourly workers, much faster. Same-day funds may not be available per se, but it does expedite the process.

The convenience of using ACH processing instead of paper checks will save on time and costs, as well as boost efficiency for your company. Keep your staff and customers happy by using a system that has a faster processing time. If you’re curious what ACH can do for you, contact us for a free analysis.