What does the acronym RDFI stand for in the context of ACH?

What does the acronym RDFI stand for in the context of ACH?

• A. Receiving Data Financial Institution
• B. Routing Data Financial Institution
• C. Receiving Depository Financial Institution
• D. Routing Depository Financial Institution

Answer: (C)

In the context of ACH, RDFI stands for Receiving Depository Financial Institution. This term refers to the financial institution that receives a payment or credit entry initiated through the Automated Clearing House network. The RDFI is responsible for processing the transaction into the recipient's account, making it a crucial part of the ACH transaction flow. The role of the RDFI includes receiving transaction files from the ACH Operator, processing those transactions, and posting them to the appropriate accounts. The accuracy and efficiency of the RDFI in handling these transactions is vital for ensuring that funds are transferred correctly and timely to customers. Understanding the role of the RDFI helps in grasping the overall functioning of ACH payments and transactions within the financial system.

In the context of ACH, RDFI stands for Receiving Depository Financial Institution. This term refers to the financial institution that receives a payment or credit entry initiated through the Automated Clearing House network. The RDFI is responsible for processing the transaction into the recipient's account, making it a crucial part of the ACH transaction flow.

The role of the RDFI includes receiving transaction files from the ACH Operator, processing those transactions, and posting them to the appropriate accounts. The accuracy and efficiency of the RDFI in handling these transactions is vital for ensuring that funds are transferred correctly and timely to customers. Understanding the role of the RDFI helps in grasping the overall functioning of ACH payments and transactions within the financial system.