DEFINITION of 'Automatic Transfer Of Funds'

A standing banking arrangement whereby transfers from a customer's account are made on a regular, periodic basis without further instruction or action by the customer. The most common automatic transfer of funds are through "sweep" instructions, whereby all excess funds in one account are swept into another account. This zero-balance account is mostly used by corporations with many subsidiaries.

BREAKING DOWN 'Automatic Transfer Of Funds'

Automatic transfers are often used for the regular movement of funds from a checking account to a savings account, or from the account of one spouse to another or to a child. Another common use of these transfers is for overdraft protection, whereby funds are moved from a higher-interest-earning account to cover payments due in another account.

Automatic transfers may also be used for periodic equal payments, such as for mortgages or other loan payments.

RELATED TERMS
  1. Transfer

    A change in ownership of an asset, or a movement of funds and/or ...
  2. Linked Transfer Account

    Accounts held by an individual at a financial institution that ...
  3. Current Transfers

    A current account transaction in which a resident entity in one ...
  4. Automatic Bill Payment

    A money transfer scheduled on a predetermined date to pay a recurring ...
  5. Email Money Transfer - EMT

    A retail banking service that allows users to transfer funds ...
  6. Book Transfer

    The transfer of funds from one deposit account to another at ...
Related Articles
  1. Investing

    How Does a Sweep Account Work?

    A sweep account is a banking arrangement that transfers – or sweeps – balances from one account into an investment account at the close of each day.
  2. Personal Finance

    8 Low-Cost Ways To Transfer Money

    If cost is your primary concern, there are several cheap(er) ways to move funds.
  3. Investing

    5 Money Transfer Tips For Foreign Workers

    If you are working in the U.S. as a foreign worker, here are some tips for sending money back home.
  4. Personal Finance

    How Credit Card Balance Transfers Work

    The pros and cons of credit card balance transfers.
  5. Investing

    Best Ways to Send Large Sums of Money Abroad

    Understand why it may be difficult to send large sums of money internationally. Learn about the top five ways to send large sums of money abroad.
  6. Investing

    A Guide to Bank Accounts

    Find out which type of bank account suits your specific needs.
  7. Personal Finance

    Handling High-Yield Savings Accounts

    Is this the savings route for you? Read on to find out what these accounts have to offer.
  8. Personal Finance

    Sending Money? The Top Money Transfer Services

    Need to send money in a hurry? Here's a list of the major players in the money transfer business. Compare rates, times and other details before deciding.
  9. Investing

    Breaking Down Energy Transfer's Corporate Anatomy (ETE, ETP)

    Recently, Energy Transfer Partners (NYSE: ETP) and its general partner, Energy Transfer Equity (NYSE: ETE), completed the announced merger with Regency Energy Partners, a move that was designed ...
  10. Personal Finance

    3 Best Credit Cards for Balance Transfers in 2016

    Find out which credit cards offer the best balance transfer opportunities in 2016, including the longest introductory periods and the lowest costs.
RELATED FAQS
  1. How do you transfer common stock from one broker to another?

    Understand how common stock assets are transferred from broker to broker using the Automated Customer Account Transfer Service ... Read Answer >>
Trading Center