Business, Legal & Accounting Glossary
Any transfer of funds that is initiated by electronic means, such as an electronic terminal, telephone, computer, ATM or magnetic tape.
Electronic funds transfer, or EFT, is a system for transferring money from one bank to another. In electronic funds transfer, there is no paper money involved. With electronic funds transfer, dollar amounts are transferred via the Automated Clearing House network, a system connecting all financial institutions in the United States. Funds can be transferred via credit card, various point-of-sale transactions, an ATM, or direct deposit (an employee payroll option utilizing electronic funds transfer). Electronic funds transfer is popular as a way to pay bills, and also to purchase shares of certain investments, such as stocks and mutual funds. To participate in electronic funds transfer as a way to buy investments, one must first elect this option on one’s account form.
It may be easier to make an EFT in some cases when you are doing business with someone that is far away.
I used my debit card to perform an EFT and pay for my goods at the store rather than having to pay in cash.
Fred wanted to start a new IRA, and mailing a check would be too much trouble, so he set up an EFT transaction between his bank and his brokerage.
Electronic Federal Tax Payment System (EFTPS)
EFTA
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This glossary post was last updated: 11th August, 2022 | 0 Views.