ACH vs wire vs EFT: What are the key differences?

3 terms, 3 different things — yet ACH, wire transfers, and EFTs are constantly confused. While they all move money from point A to point B electronically, the mechanics under the hood are quite different.

Whether you're a business owner paying vendors or an individual sending money to a friend, choosing the right transfer method can save you time and money.

If you've ever wondered how they‌ relate to each other, this guide gives you a clear, no-nonsense breakdown.

Read on to learn more. Then, if you're still curious, explore our guide to sending money to a bank account.

This article is for informational purposes only and does not constitute financial or legal advice. Transfer speeds and fees may vary based on your specific bank and location.

The umbrella term: Electronic funds transfer

To understand the differences between each term, we first need to look at the bigger picture. EFT stands for electronic funds transfer.

Think of EFT as the parent category. It's a broad term that encompasses any transfer of funds from one bank account to another that takes place electronically. Because no physical paper checks or cash are involved, almost every digital transaction you make is technically an EFT.

Common examples of EFTs include:

• ACH transfers (like direct deposits or bill payments)
• Wire transfers (domestic and international)
• ATM withdrawals
• Using your debit card in-store
• Sending money via apps like Venmo or Cash App

The bottom line: All ACH and wire transfers are EFTs, but not all EFTs are ACH or wire transfers.

What is an ACH transfer?

ACH stands for Automated Clearing House. This is a specific type of EFT that moves through a centralized network managed by Nacha (the National Automated Clearing House Association).

ACH transfers are the workhorses of the US financial system. They're generally used for high volumes of small transactions. When you get your paycheck via direct deposit or pay your utility bill online, you're probably using the ACH network.

How ACH works

Unlike wire transfers, which are processed individually, ACH transfers are processed in batches. Banks gather all their ACH requests throughout the day and send them to a clearinghouse in groups. This batching process is what makes ACH cost-effective, but it’s also why it takes longer than a wire transfer.

Key characteristics of ACH:

• Cost: Usually no or very low-cost (often under $1 for businesses).
• Speed: Typically 1–3 business days, though same-day ACH is becoming more common.
• Reversibility: Errors can often be disputed or reversed in certain circumstances.
• Best for: Payroll, recurring bills, and regular transfers.

What is a wire transfer?

A wire is a method of electronic funds transfer that happens directly between 2 banks. Unlike ACH, it doesn't pass through a central clearinghouse. Instead, it uses secure communication networks like Fedwire (for domestic US transfers) or SWIFT (for international transfers).

Wire transfers are the express lane of the banking world. They're designed for speed and security, and often used for large transactions like real estate down payments or urgent business deals.

How wire transfers work

When you initiate a wire, your bank sends a message to the recipient's bank. Once the message is cleared and the money has been verified, the recipient's bank makes the money available almost immediately.

Key characteristics of wire transfers:

• Cost: Expensive. Domestic wires typically cost between $20–35, while international wires can exceed $50.
• Speed: Near-immediate or same-day (for domestic wires). International wires may take 1–5 days.
• Finality: Once a wire is sent, it's nearly impossible to reverse. This makes wires an easy target for scammers, so only wire money to people you trust.
• Best for: Large or urgent payments, like buying property.

Learn more about wire transfers.

ACH vs Wire vs EFT: Payment comparison

If you’re looking for a quick snapshot of how these options compare, here's the definitive breakdown:

Deep dive: When should you use which?

Choosing between an ACH and a wire transfer usually comes down to 3 factors: speed, cost, and certainty.

1. When to choose ACH

If time isn't your main priority, ACH is almost always the better choice because it's cheaper.

For businesses: Use ACH for payroll. It’s automated, cheap, and reliable.

For individuals: Use ACH for paying your rent or credit card bill. Most banks offer this service at no cost to their customers.

2. When to choose a wire transfer

If the clock's ticking or the amount is large, use a wire.

For businesses: Use wires for high-value inventory purchases or acquisitions where the seller requires "cleared funds" immediately.

For individuals: Use wires when closing on a home. Title companies usually require a wire transfer because the money is guaranteed to them.

3. Understanding the EFT landscape

Remember, EFT is just the category. If a vendor asks if you can pay via EFT, they usually mean they want a digital payment rather than a paper check. In most cases, they're looking for an ACH or wire payment.

Are international transfers ACH or wires?

In the US, ACH is domestic only. If you're sending money to Europe or Asia from a US bank account, it'll almost always be an international wire transfer using the SWIFT network, or a specialized cross-border EFT provided by a fintech like Revolut.

Learn more about sending money internationally with Revolut.

Why modern banking is moving beyond these categories

The traditional banking system was built decades ago. The delay in ACH (due to batching) and the high cost of wires (due to manual processing and intermediaries) are side effects of a pre-internet financial world.

Today, businesses and individuals expect sending money to be as fast as sending a text. This is where modern financial platforms like us are changing the game by bridging the gap between cheap but slow (ACH) and fast but expensive (wire).

How to sign up for Revolut

Whether you're sending money across the street or across the globe, we believe in transparency and speed. Here's how to get started with us:

1. Download the app: Find the Revolut app on the App Store or Google Play.
2. Sign up for Revolut: Open the app and enter your phone number. You'll be prompted to provide some basic details and verify your identity with a photo of your ID.
3. Add money: You can add money to your account via a bank transfer from another institution, or by using a debit card.
4. Initiate a transfer: Head to the Payments tab. Tap the + symbol in the top-right corner, then choose your payment method. Enter your recipient's details, including their account and routing number.
5. Choose your method: Select the transfer method that fits your needs. We'll show you the estimated arrival time and any applicable fees upfront.
6. Confirm and track: Review the details and tap Send. You can then follow your payment in real-time until it reaches its destination.

Exchange and global transfer fees, fair usage limits, and Terms and Conditions apply.