EFT is a way to move money electronically between bank accounts
EFT stands for Electronic Funds Transfer. It means money moves from one bank account to another through electronic systems instead of by check or cash. The actual dollars never leave the banking network — what moves is a digital instruction that tells one bank to reduce your account and tells another bank to increase someone else's account.
An EFT is not a single system. It is a category that includes several different methods: ACH transfers (the most common), debit card transactions, ATM withdrawals, and some wire transfers. When someone says "send an EFT," they usually mean an ACH transfer, which is the standard way businesses and individuals move money between accounts at different banks.
The key difference between an EFT and a wire transfer is speed and cost. An ACH transfer (the most common EFT) takes one to three business days and costs little or nothing. A wire transfer moves the same day but costs money — usually $15 to $30 — and cannot be reversed once sent. Both are electronic, but they use different rails in the banking system.
Key Takeaways
- EFT is the umbrella term for any electronic movement of money between bank accounts, with ACH transfers being the most common type.
- An ACH transfer takes one to three business days to complete and typically costs nothing when you send it from your own bank.
- The banking system processes ACH transfers in batches, which is why they take longer than wire transfers but cost far less.
- You need the recipient's routing number and account number to send an EFT, and the receiving bank must be in the U.S. banking system.
How an ACH transfer actually moves the money
When you initiate an ACH transfer, your bank does not send the money when ready. Instead, it collects your transfer instruction and batches it with hundreds or thousands of other transfers. These batches are processed at set times — typically in the morning, midday, and evening — through a central clearing house called the ACH Network.
The ACH Network is run by Nacha, a nonprofit organization that operates the rules and infrastructure. Your bank sends your transfer instruction to Nacha, which sorts it by the receiving bank's routing number and sends it to that bank. The receiving bank then credits the recipient's account. This whole process happens in batches, which is why it takes a full business day or more.
On day one, your bank deducts the money from your account and sends the instruction. On day two, the ACH Network processes the batch and the receiving bank gets the instruction. On day three, the recipient's bank credits their account. Some banks credit faster — same day or next day — but the standard is three days, and you should plan for that.
What information you need to send an EFT
To send an ACH transfer, you need the recipient's routing number and account number. The routing number identifies which bank holds their account. The account number identifies which specific account at that bank. Both are printed on a check or available from the recipient's bank directly.
You also need to know whether the account is a checking or savings account, though most banks will accept the transfer to either. Some transfers require additional information — a business name, a tax ID, or a reference number — but the routing and account number are the minimum.
If you have the wrong routing number or account number, the transfer will either bounce back to you or go to the wrong person. If it goes to the wrong person, recovering it is difficult and slow. Always confirm the routing and account number with the recipient before sending, especially for large amounts.
When an EFT arrives and when it does not
An ACH transfer sent on a business day before the bank's cutoff time (usually 2 p.m. or 5 p.m., depending on the bank) will typically arrive within one to three business days. Transfers sent after the cutoff or on weekends are queued for the next business day.
Holidays extend the timeline. If you send a transfer on Friday, it will not arrive until Tuesday at the earliest, because Monday is a holiday and the ACH Network does not process on holidays. The Federal Reserve publishes the ACH holiday schedule each year, and most banks follow it.
Some banks offer "next-day ACH," which moves the transfer one day faster. This is not a different system — it is the same ACH process, but the bank prioritizes it in the batch. You may pay a small fee for this, or it may be free depending on your account type.
EFT versus other ways to move money
A check is not an EFT. A check is a paper instruction that the recipient's bank must physically receive and process. It takes five to seven business days and can be lost or delayed in the mail.
A wire transfer is an EFT, but it is a different kind. Wires move the same day, usually within hours, but they cost money and cannot be reversed. Use a wire when speed matters more than cost. Use an ACH transfer when cost matters more than speed.
A debit card transaction is also an EFT. When you swipe a debit card at a store, the money moves electronically from your account to the store's account. The store sees the money within one to three days, even though your card was approved when ready.
An ACH transfer is the slowest and cheapest EFT for moving money between accounts you control or between you and a business or person. It is the standard method for payroll, bill payments, and recurring transfers.
Why banks batch ACH transfers instead of sending them when ready
Batching saves the banking system money and reduces errors. If every transfer went individually, the ACH Network would need to process millions of transactions per second. Instead, banks collect transfers throughout the day and send them in one batch, which is far more efficient.
Batching also gives banks time to verify that the sending account has enough money and that the routing and account numbers are correct. If something is wrong, the bank can reject the transfer before it enters the network, rather than having to reverse it later.
From your perspective, batching means you cannot send money when ready. But it also means the system is stable, errors are rare, and the cost to you is nearly zero. This trade-off is why ACH transfers are the default for most routine payments.
Frequently Asked Questions
Can I cancel an EFT after I send it?
If you catch it before your bank's cutoff time on the same day, you may be able to cancel it. After that, the transfer has entered the ACH Network and cannot be stopped. Contact your bank when ready if you need to cancel. If the transfer has already arrived at the receiving bank, you will need to contact that bank or the recipient to request a reversal.
What happens if I send an EFT to the wrong account number?
The transfer will go to whatever account matches that number at the receiving bank. If it is a real account, the money will arrive there. If it is not a real account, the transfer will bounce back to you within one to three days. If the money goes to the wrong person, you will need to contact them directly to request a refund — the bank cannot force them to return it.
Do I pay a fee to send an EFT?
Most banks do not charge a fee for ACH transfers sent from your own account. Some banks charge $1 to $3 per transfer if you exceed a certain number per month. Wire transfers always cost money, usually $15 to $30. Check your bank's fee schedule or ask before sending.
Can I send an EFT to a bank outside the United States?
No. The ACH Network only works within the U.S. banking system. To send money internationally, you need a wire transfer or a service like Western Union. International wires are more expensive and take longer, usually one to five business days depending on the destination country.
Why does my bank show the money as pending for three days?
The money is pending because it has left your account but has not yet arrived at the receiving bank. During those one to three days, the transfer is in the ACH Network being sorted and processed. Once it arrives at the receiving bank, it will show as completed in your account.