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Difference Between ACH and EFT

ACH vs EFT

ACH and EFT are terms that are related to the transfer of money electronically. Today, handling cash or checks seem archaic and passé. We are moving towards the direction of plastic for everyday use, and to help us in this move we have the ACH, or Automated Clearing House, and EFT, or Electronic Funds Transfer.

ACH or Automated Clearing House

When you say ACH, it is referring to the electronic network of financial institutions in the US where ACH transactions are being processed in batches. The use of ACH has given very useful in the past decade as it reduces the need for checks and gives the convenience of paying a bill or receiving your paycheck in the comfort of home.

EFT, or Electronic Funds Transfer

EFT is the process involving the transfer of money electronically, including not only ACH, but also POS transactions, paper drafts, and bill payments among others, between two or more parties. Today, people would prefer to handle cash less, as the risk of it being lost is big. Also, there is that small matter that if you lose cash, it’s virtually untraceable. EFT provides a good solution and the better alternative for this problem.

Difference between ACH and EFT

Although ACH and EFT can mean the same thing, it is important to know that they are actually different. EFT is a broad term and can be virtually used for every transfer of money that happens electronically. ACH, on the other hand, is a specific process of transferring funds electronically.

Also, ACH is processed overnight in batches while EFT can happen within business hours, depending on what kind of EFT.

ACH can be set-up to automatically happen in an account at a set date while EFTs, usually needs authorization first before it can happen.

There is no doubt that EFTs and ACH are making our lives easier. It has now been easier to plan your payments with these innovations. Just remember to talk to your bank with regards to their policies with ACH and EFTs so that you won’t be surprised with the actual processes.

In brief:

• ACH and EFT are terms in relation to the transfer of money electronically between people.

• EFT is the process of transferring money electronically, while ACH is a network for financial institutions to transfer money electronically.


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