The ACH Funding Cycle

As noted at the beginning of this section, each ACH (E-check) transaction moves through a 5 stage funding cycle: Initiation Day, Effective Date, Funding Time, Settlement Date and Posting Day. (See above for definitions.)


Determining the exact funding date for individual ACH transactions depends on the following key components which affect when the transaction reaches each stage:


Each of these components is described in detail below. Specific funding examples are provided in the next section.



Paper Checks or ACH Processing: Which is the Fastest Way to Get Your Money?

When you deposit a paper check at your bank, you often see the deposit posted on the same day or on the next day. So, you may wonder why ACH transactions processed electronically seem to take quite a bit longer.

The answer lies in the difference between “Posting” date and “Settlement” date.

The “Posting” date is simply the day the bank's computer system reports on a transaction in your account. It is not related to the day the bank actually makes funds available to you.

The “Settlement” date is the day the bank releases funds for your use.

With a paper check deposited at your bank, the “Posting” date is often many days (sometimes up to 30!) prior to the “Settlement” date.

With ACH transactions processed via ADP Payments, the “Posting” date actually occurs after the “Settlement” date. Thus as soon as you see a deposit from your ACH processor, you know that the funds are available to you immediately.

So, when you factor in the time it takes for a paper check your customer mails to reach you, the time it takes for you to actually get to the bank to deposit it, and the time the bank holds your money—you'll see that processing ACH Transactions electronically can be significantly faster!


Your ACH Funding Time

When your ACH merchant account is approved you will be provided with your funding time. Most ADP Payments customers use 3-day funding. Other funding times are 5-day, 10-day, and 30-day. Typically, higher-risk businesses will have longer funding times.


Your ACH Batch Cut-off Time

The batch cut-off time is when an ACH transaction file is closed and submitted into the ACH Network for processing. Batches can be closed once per day, or multiple times per day. Transactions are placed in the batch open at the time they are entered. The ADP Payments ACH batch close time is 5:00 PM Eastern Time.


Non-Banking Days

No transaction processing takes place on these days. They should be skipped in all bank-related funding time calculations. ADP Payments updates transaction statuses on these days.

NOTE: The exact date of bank holidays change each year. For a list through 2017, see the table from the Federal Reserve Bank of Atlanta (


The Time and Date a Transaction was Entered

The time and date a transaction was entered into ADP Payments is used to determine the batch in which it is included. The batch date is the Initiation Day for the transaction.

A transaction's Effective Date is the first bank business day after the Initiation Day. This is typically the day after the Initiation Day. However, weekends and bank holidays can delay the Effective Date.

The ADP Payments application will provide the transaction date and time on the Transaction Details screen.

NOTE: If the Void function is available, the transaction is in an open batch.


Your Bank's Policy for Posting Funds to Your Account

Each bank has a different policy for when it makes funds available to its customers. ACH Processors typically send deposits to your bank in the afternoon, and your bank posts them to your account on the next business day. Some banks will post the deposit immediately upon receipt; and others may wait several days before posting it.

ADP Payments will display a status of “Settled” for a transaction the day after the deposit is made to your bank account but it will use the deposit date as the Settlement Date recorded in the system.In most cases you will see the status update to “Settled” in ADP Payments on the same day you see the deposit posted to your bank account. If you are concerned that your bank account is not accurately reflecting ADP Payments reporting, contact your bank and ask about its funds posting policy.


Detailed examples follow in the next section.


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