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Electronic Fund Transfers
Electronic banking is sometimes called an electronic fund transfer, or EFT for short.
It uses computer and electronic technology instead of checks and other paper transactions.
Electronic fund transfers are initiated through either cards or codes that let you access your account.
Many banks use ATMs or debit cards and Personal Identification Numbers (PINs).
Electronic Fund Transfers let you do the following:
- Automated Teller Machines or 24-hour Tellers.
Some banks and/or ATM owners then charge a fee, often to consumers
who don't have accounts at that bank or when the transactions occur at remote locations.
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Direct Deposits let you put specific deposits like paychecks and Social
Security checks into your bank account on a regular basis. You can also pre-authorize direct withdrawals for
things like insurance premiums, mortgages, and utility
bills.
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With Pay-by-Phone Systems you call your bank and tell them to pay certain bills or to transfer funds
between accounts. One downside it that you have to have an
agreement with the institution to make the transfers.
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Personal Computer Banking lets you do many banking transactions - stuff like using your computer
to request transfers between accounts, view your account balance, and pay bills electronically.
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With Point-of-Sale Transfers you can pay for purchases with a debit card which in many cases is also
your ATM card. Using the card like this is similar to using a credit card but there are some important
exceptions. Although the process is fast and simple, a debit card purchase quickly transfers money
from your bank account to the store's account. So you have to make sure that
you have funds in your account to cover the cost of your purchase. You have to keep accurate
records of when and how much your debit card purchases are as well as ATM withdrawals, all this in addition
to keeping record of the checks you write. The liability you are responsible for in regards to
unauthorized use of your cards, and your rights for error resolution may differ with a debit card.
- Electronic Check Conversion is a little complicated. It converts a regular
paper check into an electronic payment. This can happen either at the point of sale or elsewhere,
like when a company receives your check in the mail. At the store, when you give your check to
a store cashier, the check is processed through an electronic system. The system captures your banking
information and the amount of the check. The check is processed and you're asked to sign a receipt
authorizing the store to present the check to your bank electronically and deposit the
funds into the store's account. When it's done, you get a receipt of the electronic transaction for your
records. After your check has been processed and returned to you by the store, it should
the store should void it so that it can't be used again. When a check is mailed-in,
you should still receive advance notice from the company that expects to process your check
electronically.
You need to be especially careful in telephone transactions.
A legitimate merchant will explain the process if necessary, and answer any questions you might have.
The merchant also should ask for your permission to go ahead and debit your account for the item that you're
purchasing. Telephone e-checks don't occur face-to-face, so it's important for you
to be cautious who you reveal your bank or checking account information to.
Be very careful about giving this information to sellers that you haven't done business with before,
especially if the seller initiates the phone call. |
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APA
format citation: (you need to change the date)
McCracken,
M. E. (2004). TeachMeFinance.com / Personal Finance / Electronic Banking - Electronic Fund Transfers. Retrieved July 16,
2004 from http://www.teachmefinance.com/Personal_Finance/Electronic_Banking/index.html
MLA
format citation: (you need to change the date)
McCracken,
Mark. TeachMeFinance.com / Personal Finance/ Electronic Banking - Electronic Fund Transfers. 16 July 2004
<http://www.teachmefinance.com/Personal_Finance/Electronic_Banking/index.html>.
Copyright © 2005 by Mark
McCracken, All Rights Reserved
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