Are ACH and Zelle the same? (2024)

FAQs

Are ACH and Zelle the same? ›

Are ACH and Zelle the same? No, ACH and Zelle are not technically the same thing, although Zelle utilizes the ACH network. Basically, all Zelle payments are (instant) ACH payments but not all ACH payments are Zelle payments.

An ACH transfer is an electronic transfer of funds from one bank account to another over the ACH (Automated Clearing House) network. This includes everything from person-to-person transfers and bill payments to direct deposits. Common uses of ACH bank transfers include: Payroll.

An ACH transfer is one of the main ways to send or receive money online. ACH, or Automated Clearing House, transfers account for the online bill payments you make and the direct deposits you receive, along with other transfers.

ACH Processing Examples:

Direct deposit from an employer (your paycheck) Paying bills with a bank account. Transferring funds from one bank account to another (Venmo, PayPal, etc.) Sending a payment to the IRS online.

Zelle is a peer-to-peer money transfer app that allows users to move funds from one bank account to another. It's among a growing number of mobile payments apps that allow you to pay another person with the click of a button, even if they have an account at a different bank.

Basically, all Zelle payments are (instant) ACH payments but not all ACH payments are Zelle payments. The primary difference between Zelle and regular ACH payments is related to speed—whereas a standard ACH payment can take 2-5 days to clear, Zelle payments tend to clear in minutes.

Most US banks and other FIs (financial institutions) including credit unions allow ACH transfers.

When a bank account is connected directly to a user's Venmo account, Venmo uses ACH processing—bank-to-bank transactions—to drive the transaction. ACH also carries only a nominal flat fee. Because these fees are comparatively small, Venmo absorbs the costs as an incentive for more customers to join the platform.

There are two types of ACH payments. ACH debit transactions involve money being “pulled” from your account. ACH credit transactions let you “push” money to different banks (either your own or to others).

Why is Zelle so much faster than ACH? ›

Because of Zelle's direct relationship with its network banks, funds are usually available immediately, whereas a traditional ACH transfer can take up to three days to process.

Zelle works by linking to a U.S. checking or savings account and transferring money to another U.S. bank account. The payer and payee don't need to have accounts at the same financial institution, but they both need to be enrolled with Zelle.

Your direct deposit needs to be an electronic deposit of your paycheck, pension or government benefits (such as Social Security) from your employer or the government. Person to Person payments (such as Zelle^®) are not considered a direct deposit.

Banks use ACH transfers to move money between different accounts or to transfer funds to another bank, to process recurring bill payments, business-to-business payments, ecommerce payments, and even peer-to-peer transactions.

If you're not sure whether your account is ACH-enabled, contact your bank. You can use any checking account provided your account is a personal account located at a branch in the U.S. Savings accounts are not eligible.

EFT: What's the difference? The terms “ACH transfers” and “EFT” are not interchangeable, but they are strongly related. ACH transfers are a type of EFT, and EFTs include ACH transfers but are not limited to them. While wire transfers are processed individually in real time, ACH transfers are settled in batches.