ACH Operator Settlement

ACH operator settlement is the process by which an ACH operator moves money between banks for the ACH entries it has cleared. After sorting entries, the operator works out what each participating bank owes or is owed for a given settlement date and window, and posts those amounts to the banks' accounts at the Federal Reserve, or to the accounts of their correspondent banks that settle for them. For the Federal Reserve's FedACH service this happens directly in Federal Reserve accounts, while The Clearing House's network settles its members' net positions through the Federal Reserve's National Settlement Service. Settlement occurs at fixed times, including separate times for each Same Day ACH window. It is a form of deferred net settlement, and banks must manage their balances so they can cover net debits, a key part of their intraday liquidity planning.