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EFT VS Wire Transfers: What's the Difference?

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Ryleigh Stangness | April 28, 2022

“EFT (PAD) vs. wire transfer—which should you choose for your personal banking or business needs? We discuss the pros and cons of each.”
5 min read
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    Difference Between EFT and Wire Transfer

    Your eldest calls you in the middle of the day so excited they can hardly speak.

    They just got out of that interview for the job they really want. You listen to every detail about the interview until they tell you, - "and the boss says they just wire my paycheque to me, right into my account!"

    Your mind wanders a bit as you think about the word "wire." You know what they meant. Money appears in their bank account on paydays, with no paper and no ATM deposit. But is that a wire transfer? It's certainly commonly understood as such, at least outside the financial industry.

    Your company also uses a system to pay employees electronically, and you pay vendors that way, too. It takes some time to process, but it's still a lot quicker than how long it took to clear a paper check.

    The payment method being used in these cases is called an EFT. Sometimes referred to as an ACH payment depending where you are from, it is a way to route money directly from and to bank accounts.

    In this blog we will discuss the main differences and benefits between EFT's and Wire transfers, and when it might be appropriate and beneficial to use one or the other.

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    EFT for Vendor, Payroll and More

    Electronic Funds Transfer (EFT) is a general term used for any type of online, telephone, ATM, Direct Debit, bank transfer, point-of-sale transfer, or e-cheque. So, payroll automatic deposits fall under the umbrella of EFTs, just like when you pay for pizza at your door. Every time you buy groceries in person, order something online or send money to your investment account, you're likely using an EFT.

    Most EFTs don't transfer the money instantly but arrive in the recipient's account in one to three days. But some do show up pretty close to immediately - like PayPal or Venmo. They advertise 30 minutes, which seems accurate, at least most of the time.

    So, in summary, an EFT is an online payment that doesn't require a paper check or cash changing hands. Quick and easy to trace, an EFT is ideal for paying a vendor, making payroll, or making personal purchases.

    Here's a more complete list of types of EFTs.

    Credit and Debit Cards Use a debit or credit card for online purchases, paying bills, or transferring amounts between accounts.

    Direct Deposits Direct deposits are usually pre-arranged to make automatic deposits between accounts, especially on a regular schedule, like paydays. Companies also pay vendor invoices this way. It may take a few days to clear, but the fees are low.

    ATMs Remember when you had to go into the bank to do anything? No? It has been several decades since ATMs have managed to draw clients inside the building for all but a few transactions. ATMs hand out cash, tell you your balance, and let you make a deposit - all without stepping foot into the bank.

    So, it seems like most money moves around by EFT. Then, why does everyone call them "wires," and is there a difference between an EFT and a wire transfer?

    EFT vs Wire

    To put it simply: A wire transfer is an EFT.

    Specifically, a wire transfer is when you send money from one bank account to another by "wire."

    In fact, the term "wire transfer" comes from when banks sent the information by telegraph wires. The bank would send instructions by telegraph about who should get the money, their bank account number, and how much they should get. The same as now. Only now we don't use telegraphs.

    Wire transfers and EFTs are the predominant technologies now in the world of money transfers. Often confused, they are both fast, reliable, and safe ways to send money between people or entities.

    Why Choose an EFT vs Wire?

    The three big factors when deciding whether to send money using an EFT vs wire come down to how quickly, how much, and what it'll cost you.


    EFTs usually arrive within a few minutes to a few days. It depends on the EFT. For payroll, that's not an issue because you can set it up in advance. If you are paying vendors, account for the extra time to avoid incurring late fees. Electronic funds transfers (EFTs) won't be processed on weekends or bank holidays. And requests entered late in the day may not be processed until the next business day. A wire transfer typically arrives the same or the next day. If your recipient is anxious to get their money, it may be best to choose a wire vs an EFT.


    Check your bank (or other financial institution) limits for how much money you can send via EFT vs. wire on any given day. EFTs often have extensive paperwork to set up larger transactions, but you may have more freedom once the work is done. Wire transfers are more typically chosen for one-time, larger amounts rather than regular, smaller payments. Send the down payment on your next real estate purchase by wire transfer. Buy a car for your eldest now that they need to get to work with a wire transfer. Send that $100 you owe your buddy by EFT.

    When you look at how much you need to send, also consider that some transactions have minimum amounts. Usually, the minimums are small enough (like $10) that it isn't relevant but check to be sure anyway.


    Both wire transfers and EFTs charge fees, sometimes both to the sender and the recipient. Check with your recipient. They may be willing to wait for the EFT to arrive to avoid paying a charge to accept the wire. Overall, fees are lower with EFTs. Sometimes much lower. But some commercial bank accounts include several wire transfers in the monthly account fee. If you send a lot of wires, ask at your bank. It can otherwise be up to $50 to send a wire transfer. Not bad if you are sending $250k and it gets there in a few hours. Less great if you need to send $250. That's when an EFT is ideal.

    The Real Difference Between an EFT and a Wire Transfer

    In summary, What's the main difference between EFT and wire transfers and when should you use either?

    An EFT is a general term for electronic payments - anything without paper money or paper cheques. Low cost and sometimes slow, EFTs are often chosen for regular or smaller payments.

    Wire transfers are a type of EFT, but are a specific term referring to bank-to-bank electronic payments, usually made one-time, in larger amounts.

    Now that you know the difference, dont worry - your eldest is not the only one who calls it all "wiring money."

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