EFT is electronic money moved directly from one bank account to another

EFT stands for Electronic Funds Transfer. It means money leaves your bank account electronically and lands in someone else's account—no check, no cash, no card swipe. The money moves through the banking system itself, not through a payment processor or third party sitting in the middle.

When you set up an EFT payment, you give the recipient (or the person collecting the payment) your bank routing number and account number. They initiate the transfer through their bank, your bank receives the instruction, verifies the account exists, and moves the money. The whole thing happens in the banking network, which is why EFT is often called a bank-to-bank transfer.

EFT is the umbrella term for several types of transfers: ACH (Automated Clearing House), wire transfers, and direct deposit all fall under EFT. The differences matter because they affect speed, cost, and how reversible the payment is.

Key Takeaways

  • EFT moves money directly from your bank account to another account through the banking system, with no middleman taking a cut.
  • ACH transfers are the slowest EFT option (1 to 3 business days) but cost nothing or very little, and are used for most bills and payroll.
  • Wire transfers move money the same day or next day but cost $15 to $50 and cannot be reversed once sent.
  • You need the recipient's routing number and account number to initiate an EFT, or you can authorize them to pull money from your account.
  • EFT fraud is possible but rare because the banking system verifies accounts before money moves, unlike payment apps or wire transfers to strangers.

How ACH transfers work—the most common EFT method

ACH is the system that handles most EFT payments in the United States. When you pay a bill online through your bank, set up automatic loan payments, or receive a paycheck by direct deposit, an ACH transfer is moving that money.

ACH transfers take 1 to 3 business days because the system batches payments together and processes them in scheduled cycles throughout the day. Your bank collects your payment instruction, holds it until the next batch window, sends it to the ACH network (run by Nacha, a nonprofit), and the receiving bank processes it on their end. This delay is built into the system—it is not a choice your bank makes.

ACH transfers are free or cost $1 to $3 if you use a third-party bill-pay service. Banks do not charge for ACH transfers between accounts you own. The low cost is why ACH is standard for recurring bills, tax payments, and payroll.

Wire transfers—faster but irreversible

A wire transfer is an EFT that moves money the same business day or next business day, depending on when you send it and which banks are involved. Wire transfers go through a different network (SWIFT for international wires, Fedwire for domestic) and bypass the ACH batching system entirely.

Wire transfers cost $15 to $50 per transfer, depending on your bank and whether the wire is domestic or international. Once the money leaves your account and the receiving bank accepts it, the transfer cannot be reversed. If you send a wire to the wrong account number or to someone committing fraud, your bank cannot get the money back—you have to pursue it through law enforcement or civil court.

Wire transfers are used for time-sensitive payments: real estate closings, large purchases, or moving money between your own accounts at different banks. They are not used for regular bills because the cost and irreversibility make them risky for routine transactions.

Push versus pull—who initiates the transfer

An EFT can move in two directions depending on who starts it. A push means you initiate the transfer from your bank account to someone else's. A pull means you authorize someone else to take money from your account.

Push transfers are safer because you control when and how much money leaves. You log into your bank, enter the recipient's account details, and approve the payment. Pull transfers require you to give someone your routing and account number, or to sign an authorization form, and they initiate the transfer on their end. Utilities, loan servicers, and subscription services often use pull transfers because it is cheaper for them than waiting for you to push a payment each month.

If a pull transfer is fraudulent or unauthorized, you have the right to dispute it with your bank within a certain window (usually 60 days). Your bank will investigate and reverse the charge if they find it was not authorized. Push transfers are harder to reverse because you approved them yourself.

What information you need to send an EFT

To initiate an EFT payment, you need the recipient's routing number (a nine-digit code that identifies their bank) and their account number (which identifies their specific account). Some banks also ask for the account holder's name to verify the account exists.

Routing numbers are public information—you can find your bank's routing number on a check, on your bank's website, or by calling them. Account numbers are semi-private; they appear on checks and statements but should not be shared casually. Giving both together to a trusted recipient (your employer, your mortgage lender, a utility company) is safe. Giving them to a stranger or an unverified business is risky because there is no way to reverse the transfer if the recipient is fraudulent.

Some banks now offer account verification before processing an EFT: they send a small test deposit to the account and ask you to confirm the amount. This catches typos in the account number before real money moves. Not all banks offer this, and it is not required.

EFT fraud and what protects you

EFT fraud is less common than credit card or payment app fraud because the banking system verifies accounts before accepting transfers. If you type in a wrong account number, the transfer may still go through—the receiving bank does not reject it just because the account holder's name does not match. But if you type in a number that does not exist, the transfer bounces back within a few days.

If someone steals your routing and account number and pulls money from your account without permission, your bank is required to investigate and reverse the charge if you report it within 60 days. If someone tricks you into pushing money to them (by posing as a business or a person you know), reversal is much harder because you authorized the transfer yourself.

The strongest protection is verification: confirm the recipient's identity before sharing your account details, and use account verification if your bank offers it. For large or one-time transfers, a wire transfer may feel riskier, but it is actually safer because you control exactly when and to whom the money goes.

When EFT is the right choice versus other methods

Use EFT (ACH) for recurring bills, payroll, tax payments, and transfers between your own accounts. It is free or cheap, and the delay does not matter because you set it up in advance. Most utilities, loan servicers, and government agencies accept ACH.

Use a wire transfer when you need money to move the same day or next day and the recipient is trusted (your own bank account, a real estate closing, a known business). Accept the cost and the irreversibility as the trade-off for speed.

Use a payment app (Venmo, PayPal, Cash App) for small peer-to-peer transfers to people you know. These apps sit on top of EFT but add fraud protection and dispute resolution that EFT alone does not have. Use a credit card for purchases where you want fraud protection and the ability to dispute charges.

Frequently Asked Questions

How long does an EFT payment take?

ACH transfers take 1 to 3 business days. Wire transfers take the same business day or next business day. Weekends and bank holidays do not count as business days, so a transfer sent on Friday may not arrive until Tuesday.

Can I cancel an EFT payment after I send it?

ACH transfers can sometimes be cancelled within a few hours of sending, before the batch is processed. Wire transfers cannot be cancelled once sent. Contact your bank immediately if you need to stop a payment; do not wait.

What happens if I give the wrong account number?

The money may go to the wrong account, or the transfer may bounce back if the account does not exist. If it goes to the wrong person, you have to ask them to return it or pursue it through your bank and law enforcement. This is why verifying the account number is important.

Is EFT safer than a wire transfer?

EFT (ACH) is safer for routine payments because you can dispute unauthorized transfers. Wire transfers are safer for one-time payments to trusted recipients because you control exactly when the money leaves. Neither is inherently safer; it depends on the situation.

Do I have to use EFT if a company asks for my bank account number?

No. You can ask to pay by check, credit card, or another method. However, many utilities and loan servicers offer discounts for ACH payments because it is cheaper for them. You are never required to use EFT, but you may pay more if you choose not to.