Electronic Funds Transfers Make the Grade
There's a whole world of electronic money transfers moving out there that you may not be aware of. You generally understand how the ATM system operates, how Direct Deposit brings your pay to your account, and how checks clear.
But you may not know that electronic funds transfers (EFTs) are becoming increasingly important in today's commerce, especially through ACH, or Automated Clearing House, transactions. Why? EFTs are faster, more accurate, and more secure than other methods of transferring money. And ACH may affect you more than you think. In fact, ACH processes many of your financial transactions by…
- Clearing your checks.
- Depositing your paychecks, Social Security benefits, or pension payments directly to your account.
- Processing your ATM withdrawals from your checking or savings account.
- Transferring funds from one account to another when you choose that option.
- Withdrawing funds from your account to pay insurance premiums, club memberships, utilities, and countless other automatic payments you have set up.
- Paying merchants from your checking account when you use your debit or ATM card.
- Handling your credit card transactions.
ACH can also convert a paper check to an E-Check when you make a payment, when a retail merchant or company uses that form of receivable payment. For this reason, checks are often not returned to you. But Echeck transactions have the benefit of allowing your account statement to reflect details of the transaction in greater detail than if a paper check were processed.
If you feel this is all happening too fast, you're not alone. It can be dizzying. But today's rapidly growing EFT technology ultimately makes the transfer of money easier, faster, more accurate and more secure than ever before.