Future Business Leaders of America (FBLA) Business Law Practice Exam

What is an electronic fund transfer (EFT)?

1. A manual check-writing process

2. A method for transferring funds electronically rather than by checks

3. A type of currency exchange

4. A banking service exclusively for corporate clients

The correct answer is: A method for transferring funds electronically rather than by checks

An electronic fund transfer (EFT) refers to a method of transferring money electronically instead of through traditional checks or cash transactions. This includes a variety of electronic payment methods, such as direct deposits, wire transfers, and debit card transactions. The appeal of EFT lies in its efficiency and speed, allowing funds to be moved quickly without the need for physical documents or visits to a bank branch. EFTs are widely used in both personal and business contexts, enhancing convenience for consumers and businesses alike. This system facilitates seamless transactions, making payments easier and reducing the risks associated with handling physical cash. In contrast to other options, a manual check-writing process involves physical checks, currency exchange deals with foreign currencies, and banking services for corporate clients do not exclusively define EFT, as it is applicable to a much broader audience.