ACH transaction codes

The Automated Clearing House (ACH) is the backbone of the nation’s electronic payments system. ACH moves billions of dollars every day from one bank account to another, and from bank accounts to vendors, at a tiny cost per transaction. Most transactions clear within one business day. ACH transactions are a fixture in all of our financial lives, in one form or another, whether in the form of a direct deposit, a tax refund, or a peer-to-peer payment.

Every ACH transaction submitted for processing must be accompanied by the correct two-digit ACH transaction code to mark it as a debit from one account and a credit to a different account.There are too many codes to detail in one post, but let’s explore the most common ACH transaction codes in several categories.

Before reviewing the codes, here are a few helpful acronyms and what they stand for:

  • NOC: A notification of change simply indicates something about a bank account has changed, such as an account or routing number.
  • CCD: A cash concentration or disbursement is a business-to-business (B2B) transaction. It can be either a credit or a debit used to make transfers internally and to external suppliers.
  • CTX: Businesses and government entities use the corporate trade exchange system to make recurring payments to a number of parties with a single funds transfer.

ACH transaction codes

Banks initiate entries into the ACH network by coding the transaction as a debit or credit to a merchant’s account. Other typical account types include consumer and loan accounts. The most frequently used codes are listed below.

Checking credits

CodeDescription
21Automated return or NOC for a checking credit (codes 22, 23, and 24)
22Automated deposit (checking credit)
23Prenotification for a checking credit
24Zero dollar entries with remittance data (for CCD and CTX entries only)

Checking debits

CodeDescription
26Automated return or NOC for a checking debit
27Checking withdrawal (debit)
28Prenotification for a checking debit
29Zero dollar entries with remittance data (for CCD and CTX entries only)

Savings credits

CodeDescription
31Automated return or NOC for a savings credit
32Savings credit
33Prenotification for a savings credit
34Zero dollar entries with remittance data (for CCD and CTX entries only)

Savings debits

CodeDescription
36Automated return or NOC for a savings debit
37Savings debit
38Prenotification for a savings debit
39Zero dollar entries with remittance data (for CCD and CTX entries only)

Financial institution general ledger (GL) credits

CodeDescription
41Automated return or NOC
42GL credit
43Prenotification of a GL credit
44Zero dollar entries with remittance data (for CCD and CTX entries only)
This article is originally published on May 18, 2020, and updated on Jun 18, 2020
AUTHOR
Finance expert. Interested in economics, payment & specialized in online payment methods. Guilty of liking too many puppy photos on Instagram.

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