ACH (Automated Clearing House) payments are electronic bank transfers specific to the United States for transactions like deposits, bill payments, and other peer-to-peer transfers. They are used for local transactions involving US bank accounts and the transfer of funds between banks within the United States.
Some key terms you should know when paying international bills to the United States:
- Routing Number: This is a nine-digit number that identifies the financial institution where your account is held. It ensures that funds are routed correctly during ACH transfers. The routing number is sometimes referred to as an ABA (American Bankers Association) number.
- Account Number: This is the unique identifier assigned to your bank account. It is specific to your account at your financial institution.
- Checking Account: Designed for frequent transactions like bill payments or purchases. Checking accounts are the most widely used type of account for ACH payments.
- Savings Account: Primarily used to save money and earn interest. While savings accounts can also be linked for ACH transfers, they aren't used commonly for bill payments.