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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.
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.
Other differences center around availability, security, and convenience.
| Traditional ACH | Zelle | |
|---|---|---|
Transfer Speed | 2-5 business days | In minutes |
Availability | Most US banks offer ACH | Zelle is not available at all banks but transfers can be made in the Zelle app |
Security | The ability to return/reverse ACH payments boosts security | A rising number of Zelle users have been victims of fraud and reversals are rare |
Convenience | First-time ACH transfers require account and routing numbers | Zelle transfers require email or phone number |
Direct deposits (an ACH credit often used for payroll) and automatic recurring payments (ACH debits for services like utilities) are common examples of ACH payments.
Whereas an ACH payment can be either a credit (adding money) or debit (withdrawing money), direct deposit is always an ACH credit payment.
Most US banks and other FIs (financial institutions) including credit unions allow ACH transfers. To send and receive ACH payments, an FI must be part of the ACH (Automated Clearing House) network, which is governed by Nacha.
The biggest reason to use ACH instead of a wire transfer is cost. ACH payments are usually much less expensive than wires.
The maximum ACH transfer limit varies depending on your financial institution and account type. Potential limits range from $3,500 per day (Bank of America) to $25,000 per day (JPMorgan Chase) for personal checking and savings accounts.
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