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9 November 2022

ACH vs RTGS | Difference | Comparison

The key difference between RTGS and ACH is that both methods and procedures are used to transfer funds. The automated clearing house transfers the funds or money in 2 to 5 business days using its network. RTGS is a quick method for sending money in just 24 hours or even earlier, depending on the bank server. Both ACH and RTGS are secure methods for transferring money but they each take a different period of time.  

What is ACH?

ACH stands for Automatic Clearing House. In the 1970s the United state of America implemented this payment system. The ACH transaction method carries various potential dangers related to funding settling. The major purpose of this money transfer process is to make payments that don't need to be made right away. ACH is a convenient method for transmitting money in a few business days, thus it may be used for all monthly payments. 

What is RTGS?

RTGS stands for real-time gross settlement, it refers to the process through which funds are moved instantly and without delay from one bank account to another. If you need to transfer a sum equal to greater than 2 lakhs in real time, RTGS turns out to be the ideal payment option. Contrary to NEFT, RTGS does not adhere to any particular processing methodology, as a result, the money is settled instantly and without any delays. Every transaction and instruction are executed using RTGS, which streamlines and expedites the money transfer procedure. 

ACH Vs RTGS | Difference between ACH and RTGS:

  • ACH stands for the automated clearing house, while RTGS stands for real-time gross settlement. 
  • The RTGS  is all about the instant or immediate fund transfer method, While the ACH would transfer the funds in a few business days.
  • The entire sum could not be transferred in a single transaction via ACH fund transfer. While the RTGS fund transfer would be able to clear the whole amount in just one go.
  • ACH allows electronic payment between banks over a centralized network. but RTGS allows a real-time settlement of funds between banks. 
  • The ACH fund transfer method was developed to deal with the chaos of bank processes. While the RTGS fund transfer was introduced to support economic growth and transfer money on an urgent basis. 
  • ACH money transfer gets affected by the net balance of the accounts, while the RTGS  fund transfer has nothing to do with the net balance of the account. 
  • The system of ACH settlement is dependent on the net credit/debit balance system, while RTGS is independent of the system.
  • The ACH transfer system requires no charges or fees for transactions, whereas the RTGS fund transfer would require some amount of charges or fees for the processing of the transaction. 
  • Payment for ACH is usually settled within 2-3 business days, while RTGS settlement happens within 1 day.
  • Settlement of payment in the case of ACH, happens in bundles, while RTGS settlement is dealt with independently.
  • ACH payments are normally fees of cost, hence they are suitable for high volume low value payment. RTGS payments, on the other hand, are typically charged; as a result, they are appropriate for little but valuable payments.


There are a couple of suitable methods if you need to transfer money electronically. banks offer a variety of mechanisms or facilities for financial transactions to meet the public expanding demand. Depending on their demands, people can choose a comfortable fund transfer system. The major difference between RTGS and ACH fund transfers is that they provide various payment types. Both of these techniques for transmitting money use different mechanisms and banking procedures. 

Thanks for reading the article. Still, if you have any questions or queries in your mind on the Difference between ACH and RTGS then please ask us in the comment section below.

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