What an Electronic Funds Transfer Is
An electronic funds transfer (EFT) is any movement of money from one bank account to another using electronic systems instead of paper checks or cash. When you set up direct deposit for your paycheck, pay a bill online, or move money between your own accounts at different banks, you are using an EFT. The term covers many methods — some are when ready, some take a few business days, and some cost money while others do not.
EFTs are different from wire transfers in speed and cost. A wire transfer is one specific type of EFT that moves money the same day or next business day and usually costs $15 to $50. Most other EFTs — ACH transfers, for example — take three to five business days and often cost nothing. If you arrived here from the wire transfer section, you are now looking at the broader category that includes wires but also many slower, cheaper options.
Key Takeaways
- Electronic funds transfers include wire transfers, ACH transfers, and direct deposits — any electronic movement of money between bank accounts.
- ACH transfers typically take three to five business days and cost nothing or very little, while wire transfers move money the same day for a fee of $15 to $50.
- Your bank controls which EFT methods are available to you and what they cost; fees and timing vary by institution.
- You need the recipient's routing number and account number for most EFTs, and some banks require you to verify a new recipient account before sending money.
Types of Electronic Funds Transfers and How Long They Take
The most common EFT method is the ACH transfer (Automated Clearing House). Your employer uses ACH to deposit your paycheck. When you pay a bill online through your bank's website, you are usually sending an ACH transfer. ACH moves money between accounts at different banks through a central clearing system that processes batches of transfers, which is why it takes three to five business days. Most banks charge nothing for ACH transfers you initiate yourself, though some charge $1 to $3.
A wire transfer is faster and more expensive. It moves money the same business day or the next business day through a separate network (usually the Federal Reserve or SWIFT for international transfers). Wire transfers cost $15 to $50 depending on your bank and whether the transfer is domestic or international. Wire transfers are often used for large payments, real estate closings, or situations where speed matters.
Debit card transfers and real-time payments are newer options that some banks now offer. Real-time payment systems like RTP (Real-Time Payments) can move money in seconds or minutes, though not all banks participate yet. Debit card transfers let you send money to someone else's debit card. Costs and availability depend entirely on your bank.
What Information You Need to Send an EFT
For a domestic ACH or wire transfer, you need the recipient's routing number (a nine-digit code that identifies their bank) and account number. The recipient can find both on a check, or they can ask their bank. You also need to know whether the account is checking or savings.
For an international wire transfer, you need additional information: the recipient's full name, address, and bank details, which may include a SWIFT code (an eight or eleven-digit code that identifies banks internationally) or an IBAN (International Bank Account Number). Different countries use different systems, so ask the recipient or their bank what information is needed.
Many banks now require you to verify a new recipient account before you can send money to it. This means the bank sends a small deposit (usually $0.01 to $0.99) to the account, and you have to confirm the amount to prove you control that account. This step can add one to two business days before your first transfer goes through.
Fees and Timing by Transfer Type
| Transfer Type | Typical Cost | Typical Speed | When to Use It |
|---|---|---|---|
| ACH (Automated Clearing House) | $0 to $3 | 3 to 5 business days | Routine payments, bill pay, transfers between your own accounts |
| Wire Transfer (Domestic) | $15 to $50 | Same day or next business day | Large payments, time-sensitive transfers, real estate closings |
| Wire Transfer (International) | $25 to $75 | 1 to 5 business days | Sending money abroad, international payments |
| Real-Time Payment (RTP) | $0 to $5 | Seconds to minutes | Urgent transfers; availability limited to participating banks |
| Debit Card Transfer | $0 to $3 | 1 to 3 business days | Sending money to someone's debit card; availability varies by bank |
How to Initiate an EFT Through Your Bank
Most banks let you start an EFT through their website or mobile app. Log in, look for "Send Money," "Transfer Funds," or "Pay a Bill," and follow the prompts. You will enter the recipient's name, routing number, account number, and the amount. The bank will show you the expected delivery date before you confirm.
If you are sending money to a bill payee (like a utility company or credit card), your bank may have that company already set up in their system. You just select the payee and enter the amount. If the payee is not in the system, you enter their mailing address, and the bank may send a paper check instead of an electronic transfer.
For wire transfers, you usually cannot initiate them online at all banks. You may need to call your bank, visit a branch, or use a special wire transfer form. Some banks charge extra if you initiate a wire by phone or in person. Always confirm the recipient's information before you authorize the transfer — wire transfers cannot be reversed once they leave your bank.
Limits on How Much You Can Transfer
Banks set their own limits on EFT amounts. ACH transfers often have a daily limit of $1,000 to $10,000 and a monthly limit of $25,000 to $100,000, though these vary widely. Wire transfers may have higher limits or no limit at all, depending on your account type and relationship with the bank. Some banks limit wire transfers to $10,000 per day for security reasons, while others allow much larger amounts.
If you need to transfer more than your bank's limit, you can contact the bank to request a higher limit, make multiple transfers over several days, or use a wire transfer if your bank allows larger wire amounts. Business accounts often have higher limits than personal accounts.
Security and Fraud Protection for EFTs
EFTs are generally find, but they are not reversible once they leave your bank. If you send money to the wrong account by mistake, you have to contact the recipient and ask them to return it — the bank cannot force them to do so. If you send money to a scammer, that money is usually gone.
To protect yourself, always verify the recipient's information before you transfer money. Call the person or organization directly using a phone number you know is correct — do not use a phone number from an email or text message. For large transfers, ask the recipient to confirm the account number and routing number in writing.
Your bank is required by law to investigate unauthorized EFTs if you report them within a certain time frame (usually 60 days for ACH and wire transfers). However, if you authorized the transfer yourself — even if you were tricked — the bank may not be able to recover the money.
Frequently Asked Questions
Can I cancel an EFT after I send it?
It depends on the type. ACH transfers can sometimes be stopped if you contact your bank before the transfer clears, which is usually within one business day. Wire transfers cannot be stopped once they leave your bank. Contact your bank when ready if you need to cancel — do not wait.
Why is my EFT taking longer than expected?
Weekends and bank holidays add days to the timeline. A transfer sent on Friday may not arrive until Tuesday. Some banks also hold transfers for fraud review, which can add one to two days. If a transfer is more than a week late, contact your bank with the transfer confirmation number.
What is the difference between a routing number and an account number?
The routing number identifies the bank where the account is held. The account number identifies the specific account at that bank. You need both to send an EFT. Both appear on a check: the routing number is the first set of numbers at the bottom left, and the account number follows it.
Do I have to pay a fee for every EFT I send?
No. Most banks charge nothing for ACH transfers you initiate yourself. Wire transfers always cost money. Some banks charge for transfers to accounts outside their network or for transfers over a certain amount. Check your bank's fee schedule or ask a representative what you will be charged.
Can I send an EFT to someone in another country?
Yes, through an international wire transfer. You will need the recipient's SWIFT code or IBAN, their full name and address, and their bank's name and address. International wire transfers cost $25 to $75 and take one to five business days. Some banks do not offer international wire transfers, so check with yours first.