Electronic Funds Transfer vs. Wire Transfer


Electronic Funds Transfer vs. Wire Transfer

By Jupiter Team · · 5 min read

Electronic funds transfer (EFT) and wire transfers are two common methods used to transfer money worldwide. They are often used interchangeably. However, there are certain differences between the two transfer methods. This article will explore EFT vs. wire transfer to enable you to select the method most suitable to transfer your money.

What is an EFT?

An electronic funds transfer (EFT) refers to the digital transfer of funds from one account to another. In India, EFT is backed by the Reserve Bank of India. The National Clearing Cell (NCC) looks after settling the money transfer before sending EFT data to the recipient’s bank.

The point to be noted here is that an EFT does not imply a specific payment type. It is an umbrella term that covers various types of electronic payments, including wire transfers, online transfers, and electronic bank transfers. The time taken to complete the EFT payment depends on the type of EFT payment undertaken. In normal situations, it takes 1-3 business days to complete an EFT transaction.

EFTs can be used for various purposes, like depositing a check into your bank account, set-up one-time payments for your credit card purchases, paying your utility bills, and so on.

What is EFT in banking?

EFT, in banking, means money transfers between banks and people.

Electronic bank transfers include inter-bank and intra-bank transfers. Today, National Electronic Fund Transfer (NEFT) is more widely used in India as part of EFT, replacing the traditional EFT system.

What is a Wire Transfer?

A wire transfer is an EFT for transferring funds between individuals or entities via banks and other financial institutions.

There is no physical transfer of funds. It is one of the preferred modes of international money transfers.

A wire transfer transaction normally gets completed within 2-5 business days, depending on the sender and recipient bank locations.

Bank Transfer Vs. Wire Transfer

A wire transfer service can be provided by service providers, companies, or banks, whereas only banks can undertake bank transfers.

Bank transfers happen mostly on a domestic scale, whereas wire transfers are for both international and domestic money transfers.

Wire transfers are faster than bank transfers, while bank transfers are considered safer and cheaper than wire transfers.

Electronic Fund Transfer vs. Wire Transfer: How Are They Different to Each Other?

There are several distinctions between the two, widely-used modes of payment. Below, we have segregated the differences in lieu of different parameters, as follows:

1. EFT vs. Wire Transfer: Meaning


EFT is an electronic transfer of funds from one account to another. It is a broader payment concept that covers various ways to transfer money, including wire transfers.

Wire transfer

A wire transfer is a particular type of EFT that can happen between two banks in the same country. International wire transfers indicate fund transfers between countries. So, it takes more than a day for an international wire transfer transaction to be completed.

2. EFT vs. Wire Transfer: How Do They Work?


  • You place an EFT request with your bank.
  • Your bank collects all money transfer requests and sends them to their service branch.
  • The service branch sends data to the EFT centre, i.e., NCC – an automated clearing house (ACH)
  • The first NCC sends EFT data to the receiving end.
  • The receiving NCC processes the data and transmits it to the recipient’s bank.
  • The recipient’s service bank branch credits their account with the transfer amount on the same business day.

Wire transfer

Wire transfer works as below:

  • You send money to someone through your bank.
  • Your bank acts like an intermediary to transmit fund transfer information sent via a secure system to the beneficiary bank. So, two bank accounts need not be linked.
  • Either the two banks transmit information directly or make use of the Society for Worldwide Interbank Financial Telecommunications (SWIFT) secure network for fund transfers. SWIFT is an electronic, secure messaging network between banks for international transfers. The transmitted information contains all money transfer particulars like sender and beneficiary details and the transfer amount
  • Your bank authenticates that you have the funds in your account for transferring money.

3. EFT vs. Wire Transfer: Time Taken To Complete Each Transaction


  • EFT completion time depends on the type of EFT payment made.
  • Under normal circumstances, EFT payments get cleared within the next business day or within three business days
  • International EFTs take a longer time depending on the country where the money gets transferred.

Wire transfer

  • Wire transfers happen instantly for a domestic transaction
  • International wire transfers may take two-to-five business days depending on the sender and recipient’s bank locations.

4. EFT vs. Wire Transfer: Maximum Transferable Amount


  • Fund transfers via the NEFT system

Banks reserve the right to decide the amount limits based on risk factors after approval from its Board.

Wire transfer

  • Any amount can be transferred provided the sender pays the relevant taxes.
  • Domestic wire transfers above Rs. 50,000 in India require complete originator information.

5. EFT vs. Wire Transfer: Type of Payments


The various ways in which EFT can be conducted, include:

  • Direct deposits like pay cheques.
  • Automated Teller Machine (ATM) withdrawals, cash deposits or transferring funds between bank accounts.
  • Wire transfers from one bank to another bank account.
  • Credit card and debit card payments include one-time or regular payments in-person, online or via phone banking.
  • Online money transfers through online banking or payment apps.
  • Telephonic money transfers from a bank or financial institution.

Wire transfer

  • Wire transfer between two banks to transfer funds domestically or internationally.
  • Wire transfer between service providers or companies (non-banks) to transfer money domestically or internationally.

6. EFT vs. Wire Transfer: Fees


  • EFTs have lower fees compared to wire transfers as they have a longer processing time.
  • The EFT fee depends on the type of EFT payment availed.
  • Debit card transactions and electronic bank transfers have a minimal charge.

Wire transfer

  • Wire transfers have higher fees than EFT as they are quickly processed compared to EFTs.

Wire transfer fees differ between domestic and international wire transfers with the latter charging higher fees.

7. EFT vs. Wire Transfer: security/reliability


  • EFTs have different types of payment options
  • Though a secure system, EFT still owes to different payment networks, and is, therefore, more vulnerable and riskier than wire transfers.

Wire transfer

  • Wire transfers are done via secure networks like SWIFT. It is a global standard used in multinational levels of export and import and money transfers.
  • Wire transfers are, for the tech used, obviously more secure than EFTs.


EFTs and wire transfers are both convenient ways to transfer funds domestically and internationally. They differ in certain aspects as you have seen how.

EFTs can be done via different payment options that cover wire transfers. So, wire transfers are a type of EFTs and not vice-versa.

When it comes to the speed and security of money transfers, wire transfers employ more stringent mechanisms than EFTs. However, EFTs are cheaper and have more options. So, based on your need to send money, you can choose between them.


1.  What is the difference between EFT and Wire Transfer?

Under an EFT, there is a movement of money from one bank account to another electronically. In a wire transfer, the sender’s bank sends information about the money transfer through a secure messaging network like SWIFT to the recipient’s bank to deposit its reserve funds into the recipient’s account.

2. What is a wire transfer?

A wire transfer is an electronic money transfer wherein you can send money from one account to another through a secure network like the SWIFT network. A wire transfer can be between two bank accounts or through the transfer of cash at a cash office.

3.  Can I wire money from my bank account?

Yes, you can wire money from your bank account. A wire transfer through a bank is one of the two major ways to wire money. It happens between two bank accounts. You can either make a bank wire transfer online from anywhere or by physically visiting the bank branch.

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