Electronic Fund Transfer (EFT) is a digital method of moving money between accounts without the need for physical transactions like cash or cheques. With EFT, you can handle transactions anytime and anywhere, ensuring flexibility and convenience in managing your finances.
What is Electronic Fund Transfer?
Electronic Fund Transfer refers to any payment process that happens digitally, eliminating the need for cheques, drafts or cash exchanges. One of the reasons why EFT is so popular is that it covers various types of financial transactions, including salary payments, utility bill payments and online shopping transactions.
In essence, it’s a method that allows money to move from one bank account to another over secure networks. The process is highly secure, minimising the risk of errors or theft. EFT payment systems are widely used for both personal and business transactions, offering an efficient alternative to traditional methods of moving funds.
How does Electronic Fund Transfer work?
Electronic Fund Transfers work through a network of computers that process transactions between banks. When you initiate an EFT, your bank sends a request to transfer money from your account to the recipient's account. This transaction is then processed by an Automated Clearing House (ACH) or similar system, which securely completes the transfer.
The following are the steps involved:
- Initiating a transfer: The sender authorises an EFT through an online platform or ATM.
- Processing: The bank sends the transaction details to the clearing house, which verifies the request.
- Clearing and settlement: Once verified, the money is moved from the sender’s account to the recipient’s account.
This entire process typically happens in real-time or within a few hours, making EFT payments fast and efficient.
Benefits of the EFT system
24 x 7 availability
Unlike traditional banking methods that are constrained by banking hours, EFT payments are available round-the-clock. They can be processed at any time of the day, ensuring you never have to wait for your bank to be operational to send or receive money.
Real-time transfers
Many EFT systems, especially those for domestic payments, offer real-time or near-real-time transfers. This means that funds are often available to the recipient immediately or within a few minutes, which is especially useful for urgent payments such as rent or utility bills.
Nation-wide accessibility
EFT systems are accessible across the country, providing the convenience of making payments from any location. Whether you're in a small town or a bustling city, you can send and receive funds quickly, without needing to visit a bank branch.
Zero cost
Most banks and financial institutions do not charge fees for basic EFT services. For example, using Internet banking or mobile apps for fund transfers often incurs no additional charges, allowing you to save money compared to other payment methods such as demand drafts or money orders.
Versatile payment system
EFT payments can be used for a variety of purposes. Whether it's paying bills, sending money to friends or even making online purchases, the EFT system can handle it all. Moreover, the flexibility of EFT allows it to be used for both one-time payments and recurring transactions, adding to its overall convenience.
Also Read: National Electronic Fund Transfer (NEFT) Timings – A complete guide
Conclusion
Electronic Fund Transfer is a fast, secure, and convenient way to manage your financial transactions. Whether you're making payments, receiving funds, or handling routine banking, EFT simplifies the process. For even greater convenience, explore services like Axis Bank's Internet Banking and Mobile Banking for seamless fund transfers, real-time tracking and 24/7 accessibility — ensuring your money moves with ease.
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.
