ACH vs. wire vs. EFT: How they’re different | Stripe (2024)

FAQs

What is the difference between ACH, EFT, and wire? ›

ACH transfers and wire transfers are both types of electronic funds transfers (EFTs). ACH transfers are typically free but may take a couple of days to process, while wire transfers are faster but can be more expensive.

The key differences between ACH routing and wire routing is ACH routing uses a clearinghouse network for batch processing in days while wire transfers work by directly transferring funds between banks almost instantly.

Another benefit of ACH is additional security. Whereas wire transfers move directly between banks, ACH payments pass through a clearing house before reaching the final recipient's bank.

For sending money

Paying for your Wise transfer using a wire may mean you pay a slightly higher fee to your bank and Wise, but your money will also be processed faster. Paying with an ACH can cost less, but may take a few days to get to Wise depending on your bank's payment processing times.

Wire transfers are direct, generally immediate transfers between two financial institutions. ACH transfers, meanwhile, pass through the Automated Clearing House, and can take up to a few business days. In total, there are seven major differences between ACH transfers and wire transfers.

know that banks have two separate routing numbers. One for wire transfers and one for ACH transfers. If you used your banks wire transfer number it will still go to your bank but the banks computer systems will not know where to put the money and there is a good chance they will reject it.

Basically, all Zelle payments are (instant) ACH payments but not all ACH payments are Zelle payments. The primary difference between Zelle and regular ACH payments is related to speed—whereas a standard ACH payment can take 2-5 days to clear, Zelle payments tend to clear in minutes.

An ACH transfer goes through an interbank system for verification before it's completed. A wire transfer goes directly and electronically from one bank account to another without an intermediary system. ACH transfers typically have lower fees than wire transfers have.

In order to withdraw funds from your US account using the Federal ACH network, you will need to have two account details at hand; your ACH routing number and account number.

Disadvantages of the ACH system

They usually don't support instant or same-day payments and processing. Because clearinghouses have specific times when they send requests to ACH operators, individuals may not be able to make payments after the scheduled time has elapsed.

Do wire transfers go through immediately? ›

Domestic wire transfer: Due to EFAA regulations, most bank-to-bank wire transfers between accounts in the US are completed within 24 hours. Some banks make wired funds available to recipients immediately, especially on transfers between accounts at the same institution.

ACH transfers are cheaper because they typically take longer to process and arrive at their destination. Wire transfers usually take a few hours to process, whereas ACH transfers can take up to four business days.

What Is the Difference Between ACH and Wire Transfers? An ACH transfer is completed through a clearing house and can be used to process direct payments or direct deposits. Wire transfers allow for the direct movement of money from one bank account to another, typically for a fee.

EFT (Electronic Fund Transfer) covers all electronic payments, while ACH (Automated Clearing House) is a specific type of electronic payment that relies on the Automated Clearing House Network for its operation. In other words, all ACH payments are EFTs, but not all EFTs are ACH payments.

ACH transfers, wire transfers, and EFTs are types of electronic funds transfers. ACH, wire transfers, and EFT vary in speed, cost, and transaction types; ACH is slower and cost-effective, wire transfers are immediate but costly, and EFT covers multiple methods.

One of the most important is the speed of transaction. As mentioned above, wire transfers can be processed instantly, while other forms of EFT may take longer to process payments. This makes wire transfers a great choice for time-sensitive payments, such as important business deals.

One further distinction is that EFTs can only be used to transfer money between bank accounts in your name, whereas Interac e-Transfers can be used to send money to a third party—like the colleague who spotted you lunch money the day you forgot your wallet.

EFT (Electronic Funds Transfer) - is a general banking system in which transactions, such as deposits and bill payments, are made through computer databases and electronic files. This is often referred to as a direct deposit.

If you're looking for a fast, one-off transaction and are comfortable paying a higher fee, a wire transfer may be your choice. For recurring or regular payments and credits where you want to avoid fees, and transactions don't necessarily need to be completed same-day, ACH may be preferable.