ACH Fundamentals
Same Day ACH vs Standard ACH & Cut-off times
Understanding the differences between same-day and standard ACH processing, including benefits and timing requirements
Same-Day ACH processing allows merchants to send ACH charges (API charges) and payouts (API payouts) faster than standard ACH processing.
Historically, ACH payments have always been batched at the end of each business day (7pm ET) and sent to the Federal Reserve for overnight processing. Charges would show on the customer’s bank account the next banking business day.
Same-Day ACH processing was introduced by Nacha to allow charges and payouts to be effective on the same day they are submitted by a merchant, rather than the next day. Early processing cut-off windows were setup and new ACH banking rules were created to make this possible.
Same-Day ACH makes the effective date of a payment the same day, but it does not mean funding events occur the same day.
Standard ACH
With standard ACH, each ACH transaction is cleared overnight. The sending institution (Straddle’s sponsor bank) sends the transaction to the receiving institution (customer’s bank aka RDFI). When the customer’s bank receives the transaction, it has until the end of the next working day (48 hours) to send a rejection to our sponsor bank. If our sponsor bank does not receive a return from the customer’s bank by the morning of the third business day, then the transaction is deemed to be successful.Same-day ACH
With same-day ACH, the effective date of the charge can occur the same day (rather than overnight/next day) as long as you hit one of the same-day ACH windows (noted below). The customer’s bank still has two business days in which to send a return, but the effective date being the same day speeds up the funding event by a day.Benefits of Same-Day ACH processing
- Faster payouts: Pre-funded payouts can be delivered to your customer, employees, sales agents, vendors, etc on the same day they are submitted to ACHQ.
- Priority access to funds: Charges are deducted from your customers accounts sooner than standard ACH processing, ensuring you have higher priority and faster access to the promised funds as well as shortening the ACH return window.
- Accelerated funding: Funding events for Same-Day ACH charges hit the merchant’s bank account one day sooner than standard ACH charges.
ACH cut-off times
| Processing Window | Cut-off Time |
|---|---|
| Same-Day ACH Window #1 | 9:00 AM EST |
| Same-Day ACH Window #2 | 11:15 AM EST |
| Same-Day ACH Window #3 | 2:15 PM EST |
| Standard (overnight) ACH Window | 7:00 PM EST |
The earlier a Same-Day ACH payment is delivered to the Federal Reserve, the sooner the payment will post to the receiver’s bank account that day.