If you are staying away from India and are sending money home, you probably already know this or are too confused and haven't figured who to ask or you are the kind who don't really care as long as the money is transferred.But this information is not just for those earning members staying away from India but also applies for those in India if you are into Online banking and make online purchases of any sort, pay bills or transfer money to another account. Five and half years in U.S. and it was only in the fourth year that I really understood the difference between the two - speaks a lot about how cerebral I am.
Anyway here's a few more my knowhow on this topic for all those who really took out their time to read this - Electronic Funds Transfer (EFT) is the generic term that is used for both wire transfer and ACH transfer. Both are electronic .
ACH is automated clearing house ( Didn't make much sense to me when I heard it first too) - electronic transfers that go through the Automated Clearing House system which is a transfer that takes several business days. Its usually free, but some banks charge a nominal fee. This is used mostly when people get direct deposit into their checking/savings account from their employer when they get paid. There is no fee to receive direct deposit.
Wire Transfer on the other hand is a bank to bank transfer using the Federal Reserve System. Wire transfers go directly through the Federal Reserve instead of an ACH third party, and they can post within 24 hours.Both the sending bank and receiving bank will charge fees for this service. Wire transfers are usually the preference for people wanting to transfer significant amounts of funds very quickly and can't wait the 2-4 business days an ACH/standard EFT will take. But the price is usually quite substantial (most US banks charge between $20 and $50 for the service and that's just for domestic accounts, international fees will be higher).
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