ACH (Automated Clearing House) transfer is one of the most popular ways to send USD throughout the United States of America. Money can be sent between US bank accounts at a minimal cost thanks to ACH transfers. There are no middlemen involved; these are direct transfers between bank accounts.
It is the US version of IMPS and NEFT.
What do I need to provide for the ACH transfer?
The sender requires your full name, account number, recipient address, routing number, and account type i.e. checking/savings for an ACH Transfer.
How does ACH Transfer work?
In an ACH payment, the payer instructs the bank to make a local transfer; this transfer is then processed later, at a predetermined time, in a batch with other payments. By doing so, banks can control the system and minimise expenses.
Since they are inexpensive and simple to start, ACH payments are widely used.
How much is the ACH Transfer fee?
ACH transfer is free of cost in most cases. However, some banks do charge an extra processing fee.
The cost of ACH payments is determined by the bank or payment processor you choose. Some banks or payment providers impose a set fee on each transaction, which generally runs from $0.20 to $1.50.
Even after this very small fee, it remains the cheapest method to move money across the US.
What is the Time Taken by ACH Transfer?
ACH transfer takes up to 2 days to settle the payments in the local bank account in the USA.
Yes, these transfers are not as fast as local bank transfers in India, which are completed in a few minutes or hours.
How to accept USD Payments in India through ACH Transfer?
Mulya Finance is one of the best ways to accept international payments in India through ACH transfer. It does so by helping you open a virtual USD account that accepts ACH easily.
Firstly, give your client the information for your Mulya USD Account. Then your client will initiate an ACH Transfer from their bank's application.
Soon, you will receive USD in your Mulya USD account. Finally, Mulya will convert this to INR through their forex partner and deposit it in your Indian bank account through NEFT.
After the transaction is complete, FIRC will get issued.
Time taken for ACH transfers on Mulya
Normal ACH payments take about 2 days to reach the local bank account. Then, Mulya takes up to 1 day to convert that payment and deposit it in your bank account.
So, it takes usually around 3 days for the complete transfer.
Fees charged for ACH transfers on Mulya
As mentioned above, there are no fees for ACH local bank transfers in the US. So, if the client sends $1000 through ACH, you will usually receive the complete $1000 in your Mulya virtual account.
Then, Mulya charges a 1% flat fee (inclusive of everything) while settling the money into your Indian Account.
There are no additional forex fees, as Mulya does all the conversions at Google Rate.
Try Mulya for accepting ACH Transfers
Thus, Mulya is one such platform that utilises ACH transfers to help you accept international payments with ease. So, if you are looking for an efficient platform to accept ACH transfers in India, click here to know how to get started on Mulya.
Tax Implications and Legality of Using US Virtual Accounts in India
It is completely legal to have a USD virtual account and accept international payments in India through ACH.
Speaking about the taxes, there are no tax implications to accepting ACH transfers through virtual accounts in the USA. You only need to pay taxes in India according to your tax slabs.
Samarth Srivastava has spent few years honing their skills and knowledge in the field of international payments. With a deep passion for finance and a keen eye for global business trends, the author has become a trusted authority on all things related to international payments.