Electronic Funds Transfer (EFT)

Electronic Funds Transfer (EFT) refers to the digital movement of money between bank accounts or financial institutions without the use of paper checks or cash. EFT enables fast, secure, and convenient transfers for various purposes, including payroll deposits, bill payments, wire transfers, and ATM withdrawals. It is a broad term encompassing many types of electronic payments and transfers.

Key Facts

• Includes Various Payment Types: Examples include direct deposit, wire transfers, ATM transactions, debit card payments, and electronic bill payments.
• Speeds Up Transactions: EFT processes payments and transfers electronically, often in real time or within a few business days.
• Secure and Regulated: EFT transactions are governed by regulations like the Electronic Fund Transfer Act (EFTA), which protects consumers from errors and unauthorized transfers.
• Widely Used in Personal and Business Banking: Common for payroll, vendor payments, government benefits, and more.
• Reduces Paper Usage and Costs: Eliminates the need for physical checks and manual processing.
• Allows Scheduled or Recurring Payments: Users can set up automatic payments for bills or subscriptions.

1. What is an electronic funds transfer (EFT)?

It’s a digital transfer of money between accounts or institutions without paper checks or cash.

2. What types of payments are considered EFT?

Direct deposits, wire transfers, ATM withdrawals, debit card transactions, and online bill payments.

3. How fast are EFT transactions?

They can be immediate or take a few business days, depending on the type of transfer.

4. Are EFTs secure?

Yes, they are protected by laws like the Electronic Fund Transfer Act and use encryption for security.

5. Can I schedule recurring EFT payments?

Yes, many banks allow you to set up automatic payments for regular bills or subscriptions.