ACH Authorization

Once you give someone ACH Authorization, they can deposit or withdraw money directly to or from your bank account. They can only deposit or withdraw dollar amounts that you have approved, and they can only do so on dates that you have agreed to. Giving ACH Authorization can help you avoid missing payment deadlines.

ACH authorization simply means an account owner has given permission for funds to be either extracted from or credited to their bank account. Also known as an automated clearing house authorization, or just ACH for short, ACH authorizations are a way for people to receive money without having to go to a bank or financial institution.

Since ACH authorizations are connected to an individual’s bank account, you should be careful about who you give ACH permissions to. If someone untrustworthy has access to your bank account information, they then have the power to request a debit or Credit entry on your behalf without your permission. Therefore, it is important to keep track of what people and companies have ACH authorization for any account you may own.

What Do I Need To Set Up ACH Authorization?

Depending on how and why you are giving permission for money to either enter or leave your bank account, there are a few different pieces of information required for ACH authorization.

When you get a new job and your employer wants to set up a direct deposit payment system, the money will come into your account via ACH authorization. When an employer sets up an ACH direct deposit, they will typically require your bank account and routing number.

Your bank routing number is a series of nine digits that indicates the financial institution you bank with. Your bank account number is a series of eight to twelve digits indicating your unique account within the financial institution you bank with. Once your employer has your bank account number, routing number, and your written permission (usually in the form of signed documentation), you can receive your paycheck payments directly to your bank account.

Other kinds of ACH authorizations just require verbal permission, and the payee’s financial account or card information. For example, have you ever returned an item you bought at a store and had the balance transferred back to the credit or debit card you used to make the original transaction? If so, you’ve given verbal ACH authorization.

When it comes to giving permission for ACH authorizations, it’s usually best to have documentation on file even though it is not always required. Keeping track of who has permission to withdraw or credit money into your account can help your finances stay organized and under control.

What Are ACH Authorization Alternatives?

In order to give ACH authorization, you will need some kind of banking or financial account. But how do you get the money you need without a bank account or credit card? If you do not want to give ACH authorization, here are a few alternatives to consider.

The first option for getting money without giving ACH authorization is to receive your funding via a physical check or money order. With a check, you can go to a currency exchange and cash your check in for money on the spot. While you do have to physically go to a currency exchange location, you don’t need a bank account in order to cash a check or money order. However, be aware that there are sometimes fees when you work with a currency exchange or other financial institutions to cash a check or money order.

You can also avoid an ACH authorization if you are paid directly in cash. Some jobs like babysitting, dog walking, certain cleaning services, etc., are jobs that can come with direct cash payments. With cash payments, your employer gives you cash directly instead of a check or direct deposit payment. But keep in mind that if you are receiving an abundance of cash payments, it might be a good idea to get a bank account to safely store your money.

Who Could Ask For ACH Authorization?

Who might need information from you for an ACH authorization? Here are some entities that may ask your for ACH authorizations.


As previously stated, employers require ACH authorization to set up direct deposit payments. This way, you can receive funding from your paychecks into your checking account.


Lenders may also request ACH authorization so they may distribute approved loan funding. You can also use the same information to set up automatic payments, so you never have to worry about missing payments for online installment loans.


Stores also sometimes need ACH authorization in order to send funding from a return to your bank account or credit card. ACH authorization isn’t required if you are receiving cash however, since the cashier will pay you back with money directly from the store’s cash register.

Banking Applications

Banking applications and other financial mobile apps require ACH authorization to enable you the ability to send and receive money. Online banking and financial applications can offer speed and convenience when it comes to dealing with your money.

Certain Financial Institutions

If you would like to set up automatic payments to pay your monthly bills, the financial institutions who receive those bill payments will need an ACH authorization. To prevent your bank account from going into the negative, always make sure you have enough money in your checking account to cover the cost of any automatic payments you may have set up.

Subscription Services

Other than bills, automatic payments for subscription services like Netflix, Spotify, or Amazon Prime also require ACH authorization. Automatic payments for services you’ve subscribed to allow you to maintain access to all the services’ benefits without having to worry about losing access due to a missed or late payment.

Benefits of ACH Authorizations

There are a few advantages of an ACH authorization over other methods of receiving money. Here are some great benefits you could enjoy with ACH authorizations.

Quick Money

Unlike checks sent in the mail, an ACH authorization allows you to receive money almost instantly. When a person or company sends money via an ACH authorization, funds may be available to the payee as soon as the ACH is confirmed and sent. While funds may appear in a bank account as pending at first, you can still usually utilize and start spending your money right away.

Other forms of funding, like checks sent in the mail, can take days or even weeks to reach their destination. So, if you are looking to receive your money quickly and efficiently, you may want to set up an ACH authorization for direct deposits.

Financial Convenience

Convenience is another great benefit of an ACH authorization. When you receive payment via ACH, you don’t have to worry about going to a currency exchange and cashing a check. In fact, you don’t have to do anything to receive your money via ACH because it’s all done electronically.

You can also use an ACH authorization to set up automatic payments for your bills, subscriptions, and other financial commitments. When you have automatic payments established, you can rest assured knowing your bills and payments will be on time, every time.

If you have a bank account and are looking to receive money regularly, it may be smart to consider an ACH authorization. You deserve to have access to your money right away without dealing with any hassles or obstacles!

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