Electronic funds transfers are one of the many useful services that may be offered by your local bank for your convenience. Unfortunately, a number of people do not even know whether or not their bank offers this service. If you've ever wondered whether electronic funds transfers could be of use to you or exactly how these transfers work, then this article is intended to give you a brief overview of the process.
Before you can decide whether or not electronic funds transfers can be of use for your needs, it's important that you understand exactly what they are. When you transfer money electronically, you're basically deducting a specific amount of money from your savings or chequeing account and placing it into another account. This account can be another account that you own, or it can be an account of someone that you know or owe money to.
How These Transfers Work
Of course, the description above is a somewhat simplified version of what happens when you make electronic funds transfers. The actual process is a bit more complex, though not really all that complicated. When you authorize a transfer from your chequeing or savings account, the teller at your bank will begin the transfer process. The computer system that contains all of the bank's account information will contact the system at the bank which hold the account that the money is being transferred to, unless the receiving account is held at the same bank in which case it will simply access the account in question.
It will then process a withdrawal from your account, and either send notice of an electronic deposit to the other bank system or post the deposit to the account directly if both accounts are at that bank. In many cases the transferred funds will be registered and available immediately, although depending upon bank policy there may be a holding period before the money is deposited and available.
Electronic funds transfers have a number of uses to fit the needs of banking customers. These transfers can be used to send money to friends or relatives, they can allow you to move funds from one of your accounts to another without the need to physically withdraw the money in question and redeposit it, and in many cases they can even be used to make electronic payments on loans, credit cards, and a variety of other bills and utilities. Consider your needs and discuss it with a representative of your bank in order to determine whether transfers are available and if they would suit your purposes.