advantages brought in by Electronic Funds Transfer in portfolio management
Electronic Funds Transfer is a revolution in money transfer, which has brought in a lot of benefits for many companies and individuals in need of money transfer. The following includes the advantages brought in by EFTs in portfolio management.
- Many companies in the past incurred costs that have been eliminated by EFT. Companies have reduced the administration cost in that earlier, organizations and individuals had to employ an individual to take cash and cash equivalents like cheques to particular destinations. The company, apart from hiring the individual, will incur logistical costs, but with EFT, you do not have to suffer such costs. Overall, the company or an individual transfer will be easy during the processes of portfolio management because some costs will be eliminated.
- EFT is fast because the funds are deposited directly to the account of the recipient direct eliminating time wasted in logistics and other financial institutions clearance, especially when it involves interbank transfers. Some portfolio needs on-time execution, and if the transfer delays, investors may miss some opportunities to increase the value of the portfolios.
- With EFT, it reduces the risk of carrying a large amount of money, making it a secure method, which is also convenient. Investors should use the technique in portfolio management because a loss in money can trigger devaluation of an investment.
- EFT is an efficient method simplifying the reconciliation and accounting needs of an organization. The tracking down of the transaction in the EFT is easier, which allows the organization and individuals to conduct their tasks effectively. The method helps in processing payments and reducing transfer problems. It becomes easy for portfolio management because an investor can transfer funds for different functions without physically moving and do an analysis of each investment.
- Portfolio management aims at maximization of profits and reduction of losses. EFT is a cheap way of funds transfer saving the investor from exorbitant transactional charges on the transfer, which will be in line with objective profit maximization, which contributes to overall portfolio value increase.