What is an electronic funds transfer (EFT)?

An electronic funds transfer (EFT) represents a digital mechanism for transferring money directly from one bank account to another without the need for physical cash or checks. This process can occur online, allowing for transactions such as bill payments, direct deposits, and money transfers through various platforms. The efficiency, speed, and convenience of EFTs distinguish them from traditional methods, which often require manual handling or physical movement of currency.

EFT is characterized by its ability to facilitate instant or near-instantaneous transactions, making it crucial for modern banking and financial operations. This digital transfer system is secure and increasingly relied upon due to its capacity to process transactions swiftly and reduce the risk of loss associated with cash or checks.