What is an ACH withdrawal & how does it work?

Adam Rozsa
3 minute read

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.

ACH withdrawals are often not available when paying in a foreign currency. To help you save when you’re sending money internationally, check out Wise and save up to 6x compared to old-school banks.

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

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💡 New to the ACH network? Get a full guide to ACH payments here.

How Does ACH Withdrawal Work?

All ACH transfers¹ are overseen by NACHA - 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 direct 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 here.

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.

Is ACH withdrawal 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.

ach withdrawal

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.

ACH Withdrawal: Pros & 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

Wise - Send money abroad fast & with low fees

Many banks won’t support ACH payments for international transactions. Instead, they offer customers international wire payments - which can be expensive, and come with some sneaky fees that are hard to spot. Wise is different.

Wise isn’t a bank. But the Wise multi-currency account still uses bank level security, and follows all the same rules your regular bank does. So you know your money is safe, no matter what currency you’re holding it in.

Open a 6x cheaper Wise account to hold 50+ currencies, send payments to 80 countries using the real exchange rate, and get your own local account details for 10 currencies. You can also get a linked Wise debit card to make payments and ATM withdrawals - or to make mobile payments on the go with Apple Pay or Google Pay. Easy.

Learn more about Wise

ach withdrawal


1]NACHA - what is ACH?
2]NACHA - how direct payment works

All sources checked on 21 October 2021

This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.

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