EFT is a way to move money directly from one bank account to another
EFT stands for Electronic Funds Transfer. It means your bank sends money electronically to another bank account — no check, no cash, no visit to a branch. The money moves from your account to someone else's account through the banking system.
An EFT is different from a wire transfer, even though both move money electronically. An EFT is usually slower (it can take one to three business days), costs less or nothing, and works within the regular banking network. A wire transfer is faster (often same-day) but usually costs money and uses a different system. For most everyday payments — rent, bills, payroll deposits — an EFT is what actually happens behind the scenes.
When you set up a payment online and it says "ACH" or "bank transfer," that is an EFT. When your employer deposits your paycheck directly into your account, that is an EFT. When a government program sends you money, that is usually an EFT too.
Key Takeaways
- EFT moves money directly from one bank account to another electronically, taking one to three business days and costing nothing or very little.
- You need the receiving account's routing number and account number to send an EFT, plus the account holder's name.
- EFTs are safer than checks or cash because the money goes directly to the right account and leaves a clear record.
- Most bills, paychecks, and government payments use EFT automatically, so you may already be using it without thinking about it.
- If you make a mistake with the account number, the money may go to the wrong person, so double-check before you send.
How an EFT actually moves your money
When you authorize an EFT, you are telling your bank to pull money from your account and send it to another account. Your bank does not hand over cash. Instead, it sends an electronic message through the banking network — usually through a system called the ACH (Automated Clearing House) — telling the other bank to deposit the money.
The process takes time because the banks do not talk to each other in real time. The ACH processes transfers in batches, usually overnight. That is why an EFT takes one to three business days. Your bank pulls the money from your account right away (so you see it leave when ready), but the receiving bank does not deposit it until the next business day or the day after.
This delay is actually a safety feature. If something goes wrong, there is a window of time to stop the transfer. With a wire transfer, the money is gone when ready and almost impossible to recover.
What information you need to send an EFT
To send money by EFT, you need four pieces of information about the account you are sending to:
- The account holder's full name
- The account number
- The routing number (a nine-digit code that identifies the bank)
- Whether it is a checking or savings account
You can find the routing number on the bottom left of a check, or by calling the bank, or by searching online for "[Bank Name] routing number." The account number is usually on the check too, or you can ask the account holder directly.
Double-check the account number before you send. If even one digit is wrong, the money may go to a different account at the same bank. Some banks will catch this and send the money back, but not all do. Once the money lands in someone else's account, getting it back is difficult.
Where you encounter EFT in daily life
You probably use EFT more often than you realize. When your employer deposits your paycheck directly into your bank account, that is an EFT. When you pay a bill online through your bank's website, that is usually an EFT. When a government program sends you a payment — unemployment, tax refund, rental information, child support — it typically arrives by EFT.
Many landlords now ask for rent by EFT instead of a check. Utilities, insurance, and subscription services often pull payments from your account automatically using EFT. These automatic payments are called recurring EFTs or standing orders.
The reason EFT is so common is that it is cheap for the business sending the money, it is reliable, and it leaves a clear electronic record. For you, it means the money arrives in your account without you having to do anything, and you can see exactly when it arrived.
EFT versus other ways to move money
An EFT is not the only way to move money between accounts. Here is how it compares:
| Method | Speed | Cost | When to use it |
|---|---|---|---|
| EFT (ACH) | 1–3 business days | Free or under $1 | Regular bills, payroll, most payments |
| Wire transfer | Same day or next day | $15–$50 | Urgent payments, large amounts |
| Check | 3–7 days | Free (if you have checks) | When the recipient does not have a bank account |
| Cash | when ready | Free | In-person payments only |
For most situations — paying rent, utilities, or a medical bill — EFT is the fastest and cheapest option. Wire transfers are for when you need the money to arrive the same day and you are willing to pay for it. Checks are becoming less common, but some landlords and older businesses still prefer them.
Safety and what can go wrong with EFT
EFT is generally safe, but mistakes can happen. The most common problem is entering the wrong account number. If you send money to the wrong account by mistake, you will have to contact your bank and ask them to try to recover it. The receiving bank may freeze the account or return the money, but this is not may provide. It can take weeks to sort out.
Another risk is fraud. If someone gains access to your bank account information, they can set up unauthorized EFT payments. This is why you should never share your account number or routing number with someone you do not trust. If you see an EFT you did not authorize, contact your bank when ready. Banks are required to investigate unauthorized transfers and usually refund the money within a few days.
Recurring EFTs (automatic payments) can also be a problem if you forget about them. Set a reminder to check your account regularly, or keep a list of which companies are pulling money from your account each month. If you want to stop a recurring EFT, contact your bank or the company pulling the money and ask them to cancel it.
How to set up an EFT payment
The steps depend on where you are sending the money from. If you are paying through your bank's website or app, log in and look for "Send Money," "Pay Bills," or "Transfer Funds." You will enter the receiving account information and the amount, then confirm it. The bank will show you when the money will arrive.
If a company is asking you to authorize an EFT (like a landlord or utility company), they will give you a form to sign. This form authorizes them to pull money from your account on a specific date or schedule. Read it carefully to make sure you understand how much they are taking and when.
If you are receiving an EFT (like a paycheck or government payment), you usually just need to provide your account number and routing number. The sender's bank handles the rest. Make sure you give them the correct information the first time.
Frequently Asked Questions
How long does an EFT take?
Most EFTs take one to three business days. The money leaves your account right away, but the receiving bank does not deposit it until the next business day or the day after. Weekends and holidays do not count as business days, so a transfer sent on Friday may not arrive until Tuesday.
Is EFT the same as direct deposit?
Direct deposit is a type of EFT. When your employer deposits your paycheck directly into your account, that is an EFT. But not all EFTs are direct deposits — you can also send an EFT yourself to pay a bill or send money to someone else.
Can I cancel an EFT after I send it?
It depends on timing. If you cancel within a few hours of sending it, your bank may be able to stop it before it leaves your account. Once the money reaches the receiving bank, it is much harder to get back. Contact your bank when ready if you need to cancel.
What if the account number is wrong?
The money may go to a different account at the same bank. Some banks will catch this and return the money, but not all do. Contact your bank right away and ask them to try to recover it. In the future, always double-check the account number before you send.
Do I have to pay a fee for EFT?
Most banks do not charge for EFTs, especially if you are paying a bill or receiving a payment. Some banks charge a small fee (usually under $1) if you send a lot of transfers in one month. Check with your bank about their specific fees.