Finance: Money Transfer

Having recently retired and with plans to travel to exotic countries, the issue of receiving the pension, social security, dividends and interest checks from different corporations presents a dilemma. The challenge is that these payments are made by checks thereby bringing a concern on how to deposit these checks for the months that I will be absent. To this problem the bank is likely to propose a change in the method of payment from use of check to electronic money transfer (EFT).

Electronic money transfer (EFT) involves the use of computers and electronic technology in the transfer of money thereby replacing the need for using checks and other paper transactions (Kebede, 2013). One form of electronic money transfer is the wire transfer. To make a wire transfer, the organization seeking to do the transfer approaches the bank and gives authorization thereby allowing transfer a certain amount of money. The sending bank sends a message through a secure system such as SWIFT to the receiving bank thereby placing a request that it effect payment according to the instructions provided. The message contains settlement instructions. In wire transfer, the actual movement of funds is not instantaneous but rather the funds may take several hours and even days before actual transfer happens. The banks engaged in this transfer needs to have a reciprocal account with each other.

This method of transferring funds will be appropriate for my situation since it eliminates the need of collecting checks and later making deposits for the funds transfer. The method is thereby convenient and gives me an opportunity to carry on with my plans of exploring foreign lands. Other advantages of the wire transfer of money include the security of the systems used and speed in receiving the actual transfers (Melicher & Norton, 2017).

Reference

Kebede, S. Z. (2013). Electronic Funds Transfer: and the Case for Consumer Protection in Ethiopia.

Melicher, R. W., & Norton, E. A. (2017). Introduction to finance (16th ed.). Hoboken, NJ: John Wiley & Sons.