An electronic funds transfer works by using computer and electronic technology rather than paper transactions in order to transfer money, as stated on the Consumer Information page of the Federal Trade Commission. Common EFT services include ATMs, direct deposit, pay-by-phone systems, personal computer banking, debit card transactions and electronic check conversion.Know More
People initiate EFTs through devices like cards or codes that enable them to access their account, says the FTC. Most financial institutions use ATM cards and Personal Identification Numbers (PINs) to transfer money via EFT. Other financial institutions use other kinds of debit cards that require a signature or scan.
ATMs are electronic terminals that allow people to bank almost virtually any time. An ATM card and PIN are necessary to transfer funds, make deposits and withdraw cash. Direct deposit permits authorization of certain deposits, such as paychecks and Social Security checks, to a person’s account on a regular basis. Pay-by-phone systems enable people to contact their financial institution and provide instructions regarding the payment of bills or transfer of funds between accounts. Personal computer banking allows handling of numerous banking transactions through a personal computer, and debit card payment transactions let consumers make payments and purchases using a debit card. Lastly, electronic check conversion converts paper checks into electronic payments.Learn more in Financial Planning
Retirees can begin withdrawing their funds at the age of 55 as long as they meet certain criteria, explains Jim Blankenship for Forbes. They must participate in a 401(k) with their current employer and leave the company during or after the year they turn 55.Full Answer >
When funds must be removed from an individual retirement arrangement depends on the age of the owner when he died and who inherited the IRA, states the Internal Revenue Service. A designated beneficiary must begin withdrawals by Dec. 31 of the year after the death, says attorney Robert Clofine.Full Answer >
Retired account holders age 59 1/2 and over can make withdrawals from IRA accounts without penalty, although the funds are subject to income tax, reports About.com. Working IRA account holders must consult account administrators before taking withdrawals. When IRA account holders reach 70 1/2, they must begin required minimum distributions.Full Answer >
Benefits to getting a pension as a lump sum include the ability to roll it over tax-deferred into an IRA account and protection of the funds in case the administering company folds, reports CNN Money. Lump sum payouts give account holders access to large amounts of money immediately, states About.com.Full Answer >