ACH withdrawal: what it is and how it works (2024)

ACH withdrawals are a type of Automated Clearing House direct payments. They can be helpful for recurrent transactions, so you don't have to set them up every month.

Although this type of payment is usually helpful on a day to day basis, it's not always available when it comes to paying in a foreign currency.

If you're looking for a way to make your payments go further than USD accounts, you'll want to check out Wise, for fast, low cost and secure international payments.

We’ll cover how Wise can help you — and all you need to know about ACH withdrawals — in this handy guide.

💡 New to the ACH network? Read our full guide to ACH payments

What is an ACH withdrawal?

ACH withdrawals are electronic payments often used for recurring bill payments. In an ACH withdrawal, the customer authorizes an organization to collect a payment by pulling money from their bank account.

This means there’s no need to remember to send money for recurring payments like utility bills.

The organization getting paid confirms the amount you owe, lets you know the date they’ll be initiating the ACH withdrawal from your account, and the transfer proceeds automatically.

How does ACH withdrawal work?

All ACH transfers are overseen by NACHA¹ — the National Automated Clearing House network. An ACH withdrawal is a form of ACH direct payment².

In an ACH withdrawal, you’ll give permission to an organization — your gym or your internet provider for example — to collect their regular payments directly from your bank account.

The organization will then inform both you and the financial institution holding your account of the amount and date of the payment, and the transfer will happen automatically.

ACH withdrawals are controlled by the organization getting paid, and can be of varied amounts.

The customer should always be informed of the payment amount and date, but the organization is in charge of the details of the transfer.

That means ACH withdrawals are handy for regular payments which can vary in value, like utility bill payments.

This guide will focus on ACH withdrawals — you may also come across ACH credit transactions, which are somewhat different and suit recurring fixed payments such as rent or subscriptions.

💡 Learn more about ACH credit payments

How long does an ACH withdrawal take?

ACH withdrawals can be set in advance to occur on an agreed date. Processing an ACH payment usually takes one or two business days, but the organization getting paid should always confirm with the customer the bill amount and expected payment date.

Are ACH withdrawals safe?

ACH withdrawals are a safe way to keep on top of your regular but variable bills. You’ll always know your payment has arrived safely, and there’s no chance it can be lost or delayed in the mail, as it could be when paying with a paper check.

Because ACH withdrawals can be used for payments which vary in amounts, you’ll need to make sure there’s enough in your account to cover the costs before the payment date, to avoid delays, fees or other issues.

Send money abroad the easy way with Wise

Global ACH transfers are technically possible these days, but only select US banks have a system in place that’s able to provide international ACH services.

If your bank can’t facilitate an overseas ACH, you can save when you send your money overseas, by choosing a specialist like Wise.

Wise processes international payments through its own payment network. That means you can fund your transfer with a local USD ACH transfer, and Wise will pay out from their account in the country and currency you need, with the mid-market exchange rate, and a low, transparent fee.

Because no money actually has to cross any borders, it’s also super fast — 45%+ of Wise payments are instant³.

Make international paymentswith ease

Please see Terms of Use for your region or visit : only pay for what you use for the most up to date pricing and fee information

How do I set up ACH withdrawals?

To get started with ACH withdrawals, you must authorize an organization to collect payment from your account.

First you’ll need to complete an ACH withdrawal subscription often known as an ACH payment mandate, which will be provided by the organization you need to pay.

Complete your account details on the form, and make sure you understand the full terms and conditions before you submit the paperwork to get started.

Unauthorized ACH withdrawals: what can you do?

If you notice an unauthorized debit from your account, make sure to notify your bank immediately. They will be able to guide you through the process of reporting the transaction and might be able to help recover the money.

Also be aware of subscription services. Sometimes when you make a purchase through a new platform or add your details for "free trials" you might be inadvertently authorizing recurrent debits from your account once the trial period ends.

ACH withdrawal: pros and cons

Not sure about whether an ACH withdrawal is the right way to cover your recurring payments?

Take a look at these advantages and disadvantages of ACH withdrawals to help you decide:

  • With ACH withdrawals you can set it and forget it — no need to remember to pay bills every month, and no need to mail in paper checks

  • Electronic payments like ACH debit and ACH credit transfers are safe, efficient and usually cheap or free to send and receive

  • ACH withdrawals can be used for bills which change month by month, like utility bills

  • With ACH withdrawals the organization getting paid is in control of transactions — you’ll be notified of the amount and date of payment, and you must make sure there’s enough in the account to cover it

  • Many banks do not allow international ACH transactions, offering international wire payments instead — these can be significantly more costly


  1. NACHA - What is ACH?
  2. NACHA - How direct payment works
  3. The speed of transaction claim depends on funds availability, approval by Wise's proprietary verification system and systems availability of our partners' banking system, and may not be available for all transactions

All sources checked on 10.21.2021

*Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information.

This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.

We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.

ACH withdrawal: what it is and how it works (2024)
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