Banking today has really broadened with so many payment options, which also makes it tough to choose one that works best for you. Here we have explained different banking options which will help you choose the right one.
What is an EFT payment?
EFT stands for Electronic Funds Transfer, and it means a payment made from one bank to another electronically.
EFT payment includes:
- Direct payment deposit
- Wire payments
- Debit and credit card payments
- Payments via online banking
In simple words, this is a form of digital transfer where no physical currency is needed to be handled; hence they are also known as e-checks. This is the quickest and most simplified payment method, which cuts down administrative costs.
What is Wire Transfer Payment?
Wire transfers can be of two types, domestic and international.
Domestic Wire Transfer:
This is a time-honored way of transaction that takes place from one bank to another. But there are several banks which do not offer wire transfer which could become inconvenient. Also, several banks need you to go to their branch to request a wire transfer that could be time-consuming.
As soon as you order a wire transfer, your bank will transfer funds to the destination bank, and this takes just a few hours to get completed. There is a bank cut-off time for a day which you need to take into consideration.
International Wire Transfer:
The process is similar, but it may involve intermediary banks in completing the transfer process as it is an international transfer. This only means you have to pay a transaction fee which can get costly. Also, the banks set their own exchange fee, which you will have to put up with, which may cost you more than the transactional fee.
For receiving an international wire payment, you may need a SWIFT code rather than a routing number. Just check with your bank before the sender initiates the process.
What is an ACH Payment?
There are two ways to transfer using your bank- Wire transfer and Automated Clearing House (ACH) payment.
ACH is a type of electronic transfer (EFT), but as the name suggests, this is mainly used for small regular payments like direct deposits or debits. This means using ACH, some organizations can directly debit an amount from your account regularly or deposit an amount regularly.
You need to note that ACH payments are made in batches; hence may take more time to process. This also means they cost you a lot less, so ACH payment is a good payment option for you if there is no rush.
What’s a Check Payment?
A checkbook is provided to its customers linked to their account numbers by the bank itself. These are small pieces of paper that can be filled to order the transfer of a certain amount from your bank account to another. This was more popular before electronic transfer payments came into existence and have become lesser popular now. But it is one of the conventional money transfer methods that still exists. You can fill a check and pass it on to the receiver who needs to go to the bank to encash it.
The check has 9-digit routing number on the bottom left, known as the ABA routing number. ABA is numbers assigned to a bank by the American Bankers Association, and each bank is offered one. A larger bank may have several routing numbers based on branches and regions.
ABA numbers can change if another bank takes over your bank; hence to confirm the bank’s current ABA number, check BankDeets to find the ABA number for your bank.