ACH vs. money transfers: what they are, differences, and more

Canada By Mitchell Steiman June 2, 2021

Automated clearing house (ACH) transfers and money transfers are a great way to send money overseas or domestically. Both methods offer simple options to quickly send and receive money from one bank account to another, but how do you know which one is best for your needs? You’ll want to consider where the money is being sent, how quickly it’s needed, fees associated with the transfer, and more.

Let’s look at ACH vs. money transfers and clarify the benefits and considerations for both options so you can get your money where it needs to go fast.

What is an ACH transfer?

While you might not realize it, chances are that you’ve used an ACH transfer in the past. Also known as an Electronic Funds Transfer (EFT) in Canada, ACH transfers are electronic transfers between bank accounts that move funds from an account to a clearing house or another account.

Here is how an ACH transfer works: money is deducted from your account and sent to your bank. Your bank then compiles all of its ACH transfers a few times a day and sends them to an automated clearing house. These automated clearing houses act as intermediaries in the transaction and facilitate the transfers. The funds then move from the automated clearing house to the recipient’s account.

Since ACH transfers involve an intermediary, it can take extra time to process. Additionally, banks only process ACH transfers a few times a day, which means ACH transfers can take up to three business days.

There are many examples of ACH transfers. Some of the most common include:

  • Direct deposit: Instead of receiving a physical paycheck, it is deposited directly to your bank account.
  • Automatic bill pay: Your funds are transferred to the bank account of the organization you’re paying.
  • Peer-to-peer platforms like PayPal: These applications link your bank account information to the platform to quickly transfer funds to others.

What is a money transfer?

A money transfer is a way to send money to a bank account electronically through a financial network (like SWIFT or Fedwire) or a bank. This allows you to send funds conveniently without having to move physical money.

If your loved one in Montreal needs quick cash to help with an emergency, certain money transfer options can get them the money they need almost instantly since there isn’t a clearing house in the middle of this transaction.

What are the differences between ACH vs. money transfers?

Although both are used to send and receive money, there are a few notable differences between ACH vs. money transfers. Most businesses with direct deposit use ACH transfer for their payroll system. Money transfers can be used when sending money overseas or when sending large amounts of money, such as to facilitate the purchase of a car or house.

The main differences between an ACH transfer and a money transfer come down to transfer speed, costs, security, regulations, and limits. Here are some factors to consider when deciding between an ACH transfer and a money transfer.

Transfer speed

Compared to other methods of transferring money, such as cashier’s checks or cash payments, both ACH payments and money transfers are relatively fast. Money transfers can be faster because they aren’t processed through a clearing house. Instead, funds travel through a network that can get the money to the recipient almost instantly.

When you need an instant transfer, a money transfer may be a better bet, like when you need to transfer money to a mortgage company for a down payment or make rent payments quickly.

ACH transfers can be used when the money doesn’t need to be sent instantly, such as when a company processes payroll, you’re using Venmo to pay a friend back for dinner, or you have automatic bill pay set up for utilities or rent.

Transfer costs

Another difference between ACH vs. money transfers is the fees associated with each. Generally, most ACH transfers, like direct deposit and automated bill payments, are free with your bank account. This includes the ability to transfer funds between your own accounts, to other people’s accounts through peer-to-peer apps, and from organizations including your company’s payroll.

In contrast, money transfer fees can range because the fees depend on where you are sending your funds, which financial institution you’re using, and whether the funds are being sent or received.


When considering ACH vs. money transfers, or any financial transaction, security is always important. If you use a less secure form of money transfers, you could risk losing money or getting scammed.

The Federal Reserve monitors ACH transfers, which means that this option offers protection for both the sender and the recipient. Also, since the funds are sent through a clearing house, you can reverse the transfer if something is incorrect.

Money transfers are also a secure option because they are monitored and facilitated by mandated federal and international organizations, but since they are processed in real-time, they are irrevocable. If any information is incorrect on the transfer, it can’t be changed, which may be a challenge if the wrong name, address, or amount is included on the transfer.

Transfer requirements

To initiate an ACH transfer or EFT, you will need:

  • The name of the bank receiving funds
  • The type of account receiving funds
  • The bank’s ABA routing number
  • The recipient’s account number

Depending on the type of ACH transfer, you might be able to transfer funds by just clicking the recipient’s name in an app. With the Western Union money transfer app, you can save your recipient’s information for quick repeat sending.

International transfer regulations

If you are sending money internationally, money transfers are more secure and widely accepted than ACH transfers. In fact, ACH transfers may not even be an option for sending money overseas.

To initiate an international money transfer, you will first need to verify your own information. A bank might require:

  • Government-issued ID (like your driver’s license or passport)
  • Proof of address
  • Reason for the transfer
  • Proof that you own the bank account or debit card that you’re using to pay for the transfer

In addition, your bank might have an upper limit on how much you can send overseas. If you’re unsure, always check with your bank first as requirements and limits vary between financial institutions.

Transfer amount limits

Another important difference between ACH vs. money transfers is that certain money transfer services can be used to transfer large amounts of money. The limits depend on the service and financial institutions involved. For example, if you bank with Fidelity, the minimum amount for each EFT is $10, and the maximum amount per day is $100,000 for withdrawals and $250,000 for deposits.

In contrast, most financial institutions cap the daily ACH transfer limits. Again, this will depend on the financial institution.

Which is better: ACH or money transfers?

When you need to send money, choosing the best option comes down to your specific needs.

If you are transferring smaller amounts of money to friends and family, an ACH transfer may be a good option because they are more affordable, and the funds don’t need to be deposited immediately.

If you are sending money to an international bank account, you may want to choose a money transfer because certain money transfer options are more widely accepted internationally.

ACH transfers are:

  • Less expensive
  • Best for smaller amounts of money due to transfer limits
  • Not as fast (3-5 business days)
  • Good for domestic transfers

Money transfers:

  • Are widely accepted internationally
  • Include fees
  • Process more quickly
  • May have higher transfer limits

Transfer funds with Western Union

You have lots of options when sending money both domestically and overseas, and Western Union is here to help make your future transfers easy. Whether you decide to send funds with a money transfer service or use an ACH transfer, you can use Western Union to send money online, in person, or with the money transfer app. With over 200 locations around the world, it has never been easier to send funds.

Send money with the Western Union mobile app

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