ACH mandate refers to an agreement between two parties to commit to a recurring payment.
In most cases, ACH mandates relate to streamlining fixed payments that will take place over a long horizon. That said there are other benefits, which we will share below.
Plus, we will also answer the most common questions we receive from our members on the topic of ACH mandates.
This article is part of our free series on banking, ranging from how to open accounts as a foreigner to NRI bank account opening, and everything in between.
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- ACH Mandate
- What Is an ACH Direct Payment Used For?
- Frequently Asked Questions
- Ready to Explore Your Options?
ACH Mandate
ACH mandate refers to a recurring payment agreement between two parties that involves automatic withdrawals from one account to another. In other words, an ACH mandate is a pre-authorized payment for a recurring product or service delivery. Depending on the country, you may need to complete a registration process to enable an ACH mandate for recurring payments.
What Is an ACH Direct Payment Used For?
An ACH direct payment is used for sending recurring payments. In many cases, these recurring payments are initiated by financial institutions, especially when the funds are destined for their own account, such as during periods of loan repayment.
It’s also important to note that there are different types of ACH mandates. And, depending on the specific use for the ACH mandate, one type of ACH mandate may be more suitable than others.
Benefits of an Automated Clearing House Mandate
The benefits of an Automated Clearing House mandate include greater convenience, low-cost transfers, and fast transaction processing. Additionally, setting up an Automated Clearing House mandate can result in significant time savings when dealing with long-term financial commitments like loan repayment.
In other words, Automated Clearing House mandates can save you time, money, and offer greater convenience than dealing with sending transactions manually on a recurring basis.
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Frequently Asked Questions
Below are three of the most common questions that we receive from people looking into the meaning of an ACH mandate. If you have further questions you would like answered, don’t hesitate to get in touch with us directly.
What Is the ACH Registration Process?
The ACH registration process will ultimately depend on where you plan to register and the type of ACH mandate you plan to register. For example, if you plan to register an ACH e-Mandate with a financial institution in India, you will need to ensure your bank is registered with NPCI, confirm your identification, and more.
What Is the Maximum Amount of ACH Mandate?
The maximum amount of an ACH mandate will depend on the type of mandate. For example, e-Mandates have a maximum limit of Rs. 10 Lac. However, paper mandates that are registered directly with a financial institution will allow significantly higher values to be sent and received.
What Is the Full Form of ACH?
The full form of ACH in banking is “Automated Clearing House”. Automated Clearing House refers to a network for clearing financial transactions in the United States. More specifically, it refers to an electronic network that processes credits and debits, usually in batched recurring orders. That said, ACH transfers can also include one-off payments to individuals and vendors.
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