On the receiving end of an ACH payment is a bank holding the account that gets credited or debited. That bank is the RDFI. After an ACH operator routes the entry, the RDFI is responsible for posting it to the right account by the required time, and for sending a return if something is wrong, such as the account being closed or, for a debit, the customer saying it wasn't authorized. The RDFI is identified by the routing number on the entry.
In a flow
In an ACH payroll run, each employee's bank is an RDFI: it receives the pay entry routed through the ACH network and posts the credit to the employee's account on the settlement date.
Common misconceptions
Myth: The RDFI checks and approves each ACH entry before it posts, the way a card authorization works.
Reality: ACH typically has no real-time approval step. The RDFI receives entries in batches and posts them; if an entry is bad or unauthorized, the fix usually comes afterward as an ACH return within the allowed return window.
Myth: Once the RDFI posts an ACH debit, the money is gone for good.
Reality: Posting and finality aren't the same. An RDFI can return a debit within the rules' timeframes, and consumer debits in particular carry extended return rights, so a posted entry can still be reversed.
Related terms
See it in a guide
Sources
- ACH Network rules, returns, and RDFI obligations ↗ · Nacha. Defines RDFI posting duties, return reasons, and return timeframes.
- Automated Clearing House (ACH) services ↗ · Federal Reserve (operator). Federal Reserve as an ACH operator routing entries to receiving banks.
Educational, plain-English explainers. Not legal, compliance, tax, or financial advice. These cover fundamentals, not current fees, limits, or rates (which change). Rails and parties vary by program and country, so verify specifics against primary sources. Last reviewed June 2026.