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What is the Difference Between ACH & EFT?
Answer by Jim Bedsole, BOL Guru
Guru Bio
Question:  I am going to ask a really stupid question. What is the difference between ACH and EFT? I am very new to the banking industry and these two topics confuse me.

Answer:  ACH is a subset of EFT. EFT is an Electronic Funds Transfer. This can take many forms. It can be a debit card transaction, an ATM withdrawal, a telephone banking transfer, an online banking bill payment transaction, or an ACH credit or debit, to name a few.

ACH stands for Automated Clearing House. It is a specific type of electronic transfer (can be debits or credits) that process under rules set by and through NACHA (National Association of Automated Clearing Houses) and state or regional associations. Some examples of ACH transactions include direct deposit of payroll or government benefits and automatic loan payment drafts.

First published on 5/26/08

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