Electronic Funds Transfer (EFT) is a computerized system used to transfer money from one bank account to another. EFTs are commonly used by individuals, businesses, and organizations for various financial transactions such as paying salaries, making purchases, and paying bills.
One of the benefits of EFT is its convenience. With EFT, you can easily transfer funds from your bank account without leaving your home or office. This saves you time and eliminates the need to visit a physical bank branch.
Another advantage of EFT is that it’s secure and reliable. Transactions are processed electronically through secure networks that use encryption technology to protect sensitive information such as account numbers and personal identification details. As a result, there’s less risk of fraud compared to traditional paper-based methods like checks.
EFT also offers significant cost savings over other payment methods like wires or checks. The processing fees associated with electronic transfers are typically lower than those charged for paper-based transactions because they require fewer manual processes.
There are two main types of EFT: Automated Clearing House (ACH) transfers and wire transfers. ACH transfers are commonly used for recurring payments such as mortgage payments or utility bills while wire transfers are more appropriate for urgent or high-value transactions.
To initiate an EFT transaction, you need to provide the recipient’s bank routing number and their account number along with the amount you want to transfer. Once the transaction has been initiated, it may take up to several business days before the funds become available in the recipient’s account depending on factors such as banking hours and holidays.
Overall, Electronic Funds Transfer has revolutionized how we conduct financial transactions by providing us with fast, reliable, secure options that save time and money compared to traditional payment methods.