Direct Deposit (Electronic Funds Transfer) (2024)

Provisions of the Debt Collection Improvement Act of 1996 require that the majority of federal payments be made by direct deposit (electronic funds transfer (EFT). Direct deposit (EFT) impacts every federal government vendor regardless of the size of the company or the goods or services provided. If you are not already doing so, you will need to arrange to receive payments and payment-related information electronically.

If you or your financial institution have any questions about vendor payments or the electronic delivery of payments (ACH/EFT/Direct Deposit), or other questions related to federal payments, please contact the Fiscal Service Payments Call Center at 1-855-868-0151, Option 2. You can also get answers by visiting

Vendor Payments Policy

The EFT rule (31 CFR Part 208) requires that most federal payments be made electronically. Waivers are available to agencies and to individual recipients, however, no waivers are available to vendors. As a result, any vendor of the Federal government is required to receive payment by direct deposit (electronic funds transfer (EFT)).

  • Read 31 CFR Part 208
  • Letter to Vendors about payment guidance
  • SF Form 3881, ACH Vendor/Miscellaneous Payment Enrollment Form

Please contact the federal agency that will issue a payment to you and work with them to establish the EFT Direct Deposit. If you need help with contact information for that federal agency, call the Fiscal Service Payments Center at 1-855-868-0151, Option 2.

Vendor Payments & Delivery of Payment-Related Information

The Automated Clearing House is the primary system used to transmit and receive electronic payments. To receive electronic payments through the ACH for vendor payments, you are required to enroll with each federal agency with which you do business.

The ACH Vendor/Miscellaneous Payment Enrollment Form requires you to provide the federal agency your financial institution information (account number and routing number) so the funds can be deposited electronically to your account.

This process is referred to as Financial Electronic Data Interchange or Financial EDI. Financial EDI is used by thousands of businesses daily to exchange payments, payment information, or financial documents in standard formats.

Financial Institutions & Delivery of Payment-Related Information

The rules that govern the ACH system address the delivery of payment-related information. Upon your request, financial institutions must provide you with the payment-related information by the opening of the second business day after the payment posts to your account.

This rule impacts all financial institutions processing ACH payments. Financial institutions considered to be "EDI capable" have the means to translate the payment-related information as the payment posts to your account and provide the information to you via a paper report, fax, e-mail, or through an electronic transmission.

Questions to Ask Your Financial Institution

You should contact your financial institution prior to enrolling for electronic payments to discuss the delivery of the payment-related information. Depending on the type of account you have (corporate/business or consumer/retail), you may need to determine the appropriate area within your financial institution to contact. This could be the local branch that you do business with or the corporate cash management contact at the headquarters office or operations center. Here are several questions to ask your financial institution:

Can you provide payment-related information that may accompany electronic payments to my account?
Your financial institution may have a package of services available from which you can choose the best method for receiving the payment-related information.
How can you provide this payment-related information to me?
Paper, fax, electronic reports, or e-mail are acceptable means to be considered "EDI capable" and to be in compliance with the ACH rule change.
How quickly can you provide the payment-related information to me after the electronic payment posts to my account?
By the opening of business on the second business day following the settlement date of the payment is acceptable and is in compliance with the ACH rule change.
Is there a cost for providing this information?
Financial institutions have different fee schedules for different services and the cost may be determined by your account type. There may be costs associated with setup, per report delivery, and per addenda or character translation.

If your financial institution charges too much for payment-related data, you may be able to access this by data on the internet by enrolling in payment notification services provided by Internet Payment Platform (IPP).

Last modified 03/29/24

Direct Deposit (Electronic Funds Transfer) (2024)


What is electronic fund transfer answer? ›

Electronic funds transfer (EFT) is the electronic transfer of money from one bank account to another, either within a single financial institution or across multiple institutions, via computer-based systems, without the direct intervention of bank staff.

Are direct deposits considered electronic funds transfer? ›

An electronic funds transfer (EFT), also known as a direct deposit, is the digital transfer of money between bank accounts. As digital transfers, they reduce the need for manual input and paper documents.

What is considered an electronic funds transfer? ›

Electronic funds transfer (EFT) is a transfer of funds is initiated through an electronic terminal, telephone, computer (including on-line banking) or magnetic tape for the purpose of ordering, instructing, or authorizing a financial institution to debit or credit a consumer's account.

Are EFT funds available immediately? ›

EFT requests entered after 4 p.m. ET will not process until the next business day. Bank wires you submit before 4 p.m. ET are typically available the same day. If you submit your wire request after 4 p.m. ET, the money is typically available the following business day.

What is the difference between a bank transfer and an electronic funds transfer? ›

EFTs usually process funds via an automated clearing house (ACH) while wire transfers are sent directly between one bank and another. Wire transfers have the benefit of being faster and having higher transfer limits than EFT methods, but they carry higher fees and are not reversible.

How long does it take for an electronic funds transfer to go through? ›

How long it takes for an EFT payment to clear heavily depends on what type of transaction is being performed. Debit card and ATM transactions often clear instantly. ACH transactions typically clear the next day. International transactions might take longer — often two business days.

How do I check my EFT payment? ›

Most banks include end-to-end tracking as part of their service; but be sure to confirm this before you sign up for any account. The best way to check on the status of an EFT payment is by using your business's online banking service.

What is not an electronic fund transfer? ›

Gift cards, stored-value cards, credit cards, and prepaid phone cards are excluded from the EFTA.

What are the four most common types of electronic fund transfers? ›

Electronic Funds Transfer (EFT) Meaning

The EFT can happen between accounts within one bank or between accounts across multiple banks. Other transaction types that are considered EFT include direct deposit, ATMs, virtual cards, e-Checks (used globally), peer-to-peer payments, and personal computer banking.

How many digits are there in an EFT number? ›

Each payment transaction is assigned a 15-digit EFT number by the Financial Agent. The EFT number is a unique identifier used to research payments on the Master File and IDRS. DO NOT use the EFTPS DLN to perform research on EFTPS transactions.

Why does EFT take 3 days? ›

It takes some time for a bank user to "release" a funds transfer; once it has been initiated it is put into a queue to be reviewed as potentially fraudulent or money laundering activity. Almost every transaction has to be monitored for this from a legal standpoint. The compliance process can take multiple days.

What is an example of a transfer of funds? ›

For example, in the case that two institutions that need to complete a transaction both maintain accounts at a third institution, that third institution may transfer the funds from one's account to the other's to facilitate the customers' transfer.

What is the meaning of funds transfer? ›

(a) "Funds transfer" means the series of transactions, beginning with the originator's payment order, made for the purpose of making payment to the beneficiary of the order. The term includes any payment order issued by the originator's bank or an intermediary bank intended to carry out the originator's payment order.

What is national electronic fund transfer in simple words? ›

What is NEFT? The NEFT or National Electronic Funds Transfer is an electronic payment system that allows users to initiate direct one-to-one payment anywhere across the country. One can send money to the beneficiary only if he or she has a bank account with any branch in the country.


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