Accredited ACH Professional (AAP) Practice Exam

Which financial institution receives ACH entries from the ACH operator?

1. Originating Depository Financial Institution (ODFI)

2. Receiving Depository Financial Institution (RDFI)

3. Clearing House

4. Paying Bank

The correct answer is: Receiving Depository Financial Institution (RDFI)

The Receiving Depository Financial Institution (RDFI) is the correct choice because it is the financial institution that receives ACH entries from the ACH operator. In the ACH network, the RDFI is responsible for receiving transactions and processing them for the account holders of that institution. When an ACH transaction is initiated—such as a direct deposit or a bill payment—the entry is sent through the ACH operator, like the Federal Reserve or a private clearinghouse, and then delivered to the RDFI. The ODFI, on the other hand, is where the ACH entries originate instead of receiving them. The Clearing House facilitates the processing and settlement of ACH transactions but does not receive entries directly as a financial institution. The Paying Bank conceptually refers to the bank that holds the account to be debited in a transaction, which doesn't specifically fit as a participant receiving ACH entries from the ACH operator. Therefore, the RDFI is the most accurate answer because it encapsulates the institution that directly receives and processes the ACH entries after they have been routed through the ACH operator.