Which term describes direct transfers of funds between bank accounts often used for large interagency payments?

Which term describes direct transfers of funds between bank accounts often used for large interagency payments?

• A. Money order
• B. Delinquent account
• C. Installment plan
• D. Electronic Funds Transfer

Answer: (D)

Direct transfers of funds between bank accounts are handled electronically, moving money from one account to another without paper instruments. This method is known as Electronic Funds Transfer. It’s the go-to for large interagency payments because it’s fast, traceable, and secure, allowing settlements to occur quickly and with good audit trails. A money order is a prepaid paper document, not a direct account-to-account transfer. A delinquent account refers to overdue debt, not a payment method. An installment plan is a repayment schedule, not a way to move funds electronically between accounts.

Direct transfers of funds between bank accounts are handled electronically, moving money from one account to another without paper instruments. This method is known as Electronic Funds Transfer. It’s the go-to for large interagency payments because it’s fast, traceable, and secure, allowing settlements to occur quickly and with good audit trails. A money order is a prepaid paper document, not a direct account-to-account transfer. A delinquent account refers to overdue debt, not a payment method. An installment plan is a repayment schedule, not a way to move funds electronically between accounts.