Also called: RDFI
What an RDFI is
A Receiving Depository Financial Institution, or RDFI, is the bank or credit union that receives an ACH payment instruction for an account. The institution holds the receiving account and carries out the instruction: put money into the account for an ACH credit, or take money out for an ACH debit.
For example, when you collect an ACH payment from a customer, the customer’s bank is the RDFI. If you send an ACH credit to a supplier, the supplier’s bank is the RDFI. The RDFI is defined by its place in that payment, not by whether it serves a consumer or a business.
RDFI names the receiving bank in an ACH payment, not a standard fee on your merchant statement.
How an RDFI fits into an ACH payment
The payment starts with an originator, such as your business, and its Originating Depository Financial Institution (ODFI). The ODFI sends payment information through an ACH Operator, which sorts entries and forwards them to the correct RDFI. The two ACH Operators are the Federal Reserve and The Clearing House.
For an ACH credit, such as a payroll deposit, the RDFI receives instructions to credit the recipient’s account. For an ACH debit, such as a customer’s bill payment, it receives instructions to debit the account. About 80% of ACH credits and debits settle in one banking day or less.
What the RDFI role means for your business
The RDFI is the receiving bank in the ACH chain. It does not tell you the price your business pays to originate a payment, and the RDFI definition does not establish a standard merchant fee. Keep the RDFI separate from your ODFI when you review ACH costs: one receives the entry for the account, while the other originates it for the sender.
Timing matters for cash flow. ACH debits cannot have a settlement date more than one banking day in the future, while ACH credits can settle the same day, the next banking day, or in two banking days. If you collect an ACH debit, plan around the scheduled settlement date rather than assuming the funds move like a card authorization.
Where the RDFI appears in your payment records
RDFI describes a bank’s role in the ACH network, not a standard line item on a merchant processing statement. The research notes do not identify a standard RDFI fee or statement label. If a statement charges you for ACH, review the actual fee description and amount instead of treating “RDFI” as the charge.
For reconciliation, match each ACH credit or debit to the account and payment you expected. If you send payments to customers or suppliers, the recipient’s institution is the RDFI; if you collect from a customer, the customer’s institution is. That distinction helps you trace the destination without confusing it with your own bank or payment originator.
What you can actually change
- Separate the roles. When tracing an ACH payment, identify your ODFI as the originating bank and the RDFI as the bank receiving the entry for the account.
- Check ACH charges. Compare the fee description and amount on your statement. RDFI is a bank role, not a standard merchant fee label.
- Plan around settlement. Use the scheduled ACH settlement date when planning cash flow. ACH debits cannot be dated more than one banking day in the future.
Frequently asked questions
What does RDFI mean in ACH?
RDFI means Receiving Depository Financial Institution. It is the bank or credit union that receives ACH payment instructions for an account and carries out the requested credit or debit.
Is the RDFI my bank or my customer’s bank?
It depends on the payment. When you collect an ACH debit from a customer, the customer’s bank is the RDFI. When you send an ACH credit to a supplier, the supplier’s bank is the RDFI.
Does an RDFI charge my business an ACH fee?
RDFI names the receiving institution; it does not specify a standard merchant fee. Review the actual ACH fee description and amount on your statement to determine what your business is being charged.
What is the difference between an RDFI and an ODFI?
The ODFI originates an ACH entry for the sender, while the RDFI receives the entry for the account being credited or debited. In a payment your business collects, your originating bank and your customer’s receiving bank have those respective roles.