About ACH Transactions

ACH is an electronic network and system in the United States used for the secure and automated transfer of funds between financial institutions, offering a cost-effective and efficient alternative to paper-based methods. The ACH Network is run by NACHA, formerly the National Automated Clearing House Association. ACH is used for financial transactions such as direct deposits, bill payments, and electronic transfers. There are two main types of ACH transactions—ACH credits (such as paychecks) and ACH debits (such as auto-payments for bills.)

The ACH network is not a real-time system. Transactions are processed in batches at specific times and only when the Federal Reserve's settlement service is open. This is why ACH transactions may take days to settle.

There are two schedules in which ACH transactions are processed: Regular (Next Day) ACH or Same Day ACH. Additionally, Narmi offers a feature called Real-Time Posting (RTP). All three are explained in this article.

Regular (Next Day) ACH

For Regular ACH, the Effective Entry Date for each transaction in the generated NACHA file is set to the next business date. This instructs the Federal Reserve to settle those transactions on the next business date as long as the file is received by them before the next-day cutoff time. The transaction is then processed on the next business date, and funds are made available if there are no returns. 

Narmi only generates a NACHA file once per business day. This process is governed by the ACH Cutoff Time specified in the Admin Platform under Configurations > Institution Settings. Both institution settings below must be configured in the Admin Platform for Regular ACH functionality: 

• ACH Cutoff Time –The cutoff time used for automated NACHA file generation, if configured. The value entered must be a whole integer representing the start of the hour in your financial institution's timezone. This setting only accepts integers from 0 to 23, representing a 24-hour day. For example, if your desired cutoff time is 6:00 pm, the value entered should be 18. There is no default value.

• ACH File SFTP Delivery URL – The URL of the SFTP server to automatically deliver the NACHA file shortly after the ACH cutoff time. Please contact your Narmi Relationship Manager to configure this URL.

Same Day ACH

For Same Day ACH, the Effective Entry Date for each transaction in the generated NACHA file is set to the current day instead of the next business date. This instructs the Federal Reserve to settle those transactions on the same day as long as they receive the file before the same-day cutoff time. The transaction is then processed the same business day and funds are made available if there are no returns. 

Narmi only generates a NACHA file once per business day. This process is governed by the ACH Cutoff Time specified in the Admin Platform under Configurations > Institution Settings. Please see below for details on all the settings required for ACH Same Day.

As of March 18, 2022, there is a $1,000,000 limit per transaction on same-day ACH entries. Transactions over this limit will still be processed if permitted by the user’s segment limits in Narmi but will be processed as a regular (next day) ACH by the Federal Reserve. 

Future scheduled ACH payments will be processed same day on the chosen date. 

The following institution settings must be configured in the Admin Platform for Same Day ACH functionality:

• ACH Use Same Day – This determines whether all ACH transactions that originated in the Narmi platform should be sent via Same Day ACH. The default value is false. Set this value to true to enable Same Day ACH.

• ACH Cutoff Time – The cutoff time used for automated NACHA file generation, if configured. The value must be a whole integer representing the start of the hour in your financial institution's timezone. This setting only accepts integers from 0 to 23, representing a 24-hour day. For example, if your desired cutoff time is 6:00 pm, the value entered should be 18. There is no default value.

• ACH File SFTP Delivery URL – The URL of the SFTP server to automatically deliver the NACHA file shortly after the ACH cutoff time. Please contact your Narmi Relationship Manager to configure this URL.

Please contact your Narmi Relationship Manager with questions about enabling Same Day ACH.

NACHA Cutoff Times

The cutoff time for Narmi ACH processing (specified by the “ACH Cutoff Time” setting described above) is separate from the system-wide ACH cutoff times defined by NACHA. For the NACHA cutoff times, go to ACH Schedules and Funds Availability on NACHA's website.

Real-Time Posting (RTP)

Narmi offers a feature called Real-Time Posting (RTP) in our Digital Banking product that allows users to see the activity in their Ledger much faster. RTP is the process of posting the ACH transaction to the user's account after an ACH push or pull request is initiated but before the NACHA file is generated. When an external transfer request is made, Narmi places a hold on the transaction, posts the transaction to the user's account, and offsets it to a General Ledger (GL) account in the financial institution's core banking system. For instructions, go to Use ACH Manager for Real-Time Posting.