AFT credits and debits
An EFT credit sends money to an account. An EFT debit collects money under your customer's PAD agreement, and different timing and return rules apply to each.
Updated November 4, 2026
Send or collect
A credit sends money from your account to an employee, supplier or customer. Use it for payroll, supplier payments, refunds and disbursements.
A debit collects money from your customer's account under a pre-authorized debit (PAD) agreement. Use it for rent, loans, insurance, memberships and invoices.
Both are directions of an electronic funds transfer (EFT), which the banks exchange as automated funds transfer (AFT) payments.1 Learn how EFT payments work in Canada.
Before you send a credit
You can pay someone with the payee's name and account details. You do not need a PAD agreement, confirmation or pre-notification for a credit.
Before you collect a debit
You need your customer's signed PAD agreement before collecting a personal, business or funds transfer PAD. The agreement says when the debits happen and whether the amount is fixed or variable.2
Send your customer the agreement's terms at least 10 calendar days before the first debit, unless they agree to a shorter period or waive it.3
For debits on a schedule, tell your customer at least 10 calendar days before the amount or date changes, and before each variable amount after the first.3
Keep an audit trail containing the agreement, evidence of your customer's authorization and the information needed to retrieve or trace a debit for at least 12 months after the last debit under that agreement.4
Read more about pre-authorized debits and the PAD agreement.
When the money moves
Credits and debits reach the receiving bank on different schedules.
At a branch that credits the same day, a credit goes on the Due Date or the business day before. Other branches need it one or two business days ahead.5
At a same-day branch, the payee's bank makes the credit available to use within 2 hours of the exchange deadline by which it received the payment. At a branch with a one-day or two-day lead time, the funds are available by the opening of business on the Due Date.6
Your bank cannot deliver a debit to your customer's bank before its Due Date.7
The banks settle credits and debits on the business day following the Due Date.8 See the full timing in how long an EFT takes.
When a payment comes back
Either direction can come back after you send it, but the return rights and your next steps differ.
A bank returning a credit or debit must do so no later than the business day after the first part of the bank able to dishonour or refuse it receives the payment.9
A payee can refuse a credit up to and including 90 calendar days after it was processed to their account.10
Your customer can claim reimbursement for a personal PAD up to and including 90 calendar days after it was debited. For a business PAD, the period is up to and including 10 business days. Their bank reimburses the claimed amount immediately on a best-efforts basis.11
You can try a debit again once if it returns for "Non-Sufficient Funds" (901) or "Funds Not Cleared" (908). Present it again within 30 calendar days after the return, for the same amount and with no added charges. A second dishonour ends that option, and a credit has no re-presentment.12
Read about PAD dispute windows and EFT return codes.
The two side by side
| Credit | Debit | |
|---|---|---|
| Who starts it | You, paying someone | You, collecting with your customer's agreement |
| What you need first | The payee's account details | A PAD agreement |
| Telling the other side | No confirmation or pre-notification | Terms before the first debit, notice before a change |
| When the money moves | Sent by the destination branch's lead time, then available within 2 hours at a same-day branch or by opening on the Due Date | Delivered to your customer's bank on or after the Due Date |
| When the banks settle | The business day following the Due Date | The business day following the Due Date |
| How long it can come back | 90 calendar days after processing | 90 calendar days for a personal PAD, 10 business days for a business PAD |
| Trying again | No re-presentment | Once within 30 calendar days after an eligible return, for the same amount |
Running both on EFT Rails
You send and collect both directions in the dashboard or through the API. Each payment shows its state and the date it is expected to settle.
You hold the PAD agreement with your customer and send its notices. A returned payment shows as returned in the API and dashboard.
Use the EFT reconciliation guide to match payment states to your ledger. For the file records behind both directions, read the file format guide.
Sources (12)
- Rule F1, "Introduction" ↩
- Rule H1, section 15 ↩
- Rule H1, sections 16 and 17 ↩
- Rule H1, section 21 ↩
- Rule F1, Part II, "Credit Transaction Lead Times and Exchange" ↩
- Rule F1, Part II, "Credit Transaction Funds Availability" ↩
- Rule F1, Part II, "Debit Transaction Exchange Dates" ↩
- Rule F1, Part V, "Settlement" ↩
- Rule F1, Part III, "Time Limitation for Return" ↩
- Rule F1, Part III, "Exceptions to Time Limitation: Payor/Payee Initiated Returns" ↩
- Rule H1, section 24 ↩
- Rule F1, Part III, "Re-presentment and Rejected Returned Transactions" ↩
Questions
What is the difference between an EFT credit and an EFT debit?
A credit sends money to the payee's account, while a debit collects money from your customer's account. A debit needs your customer's PAD agreement.1
Do I need the customer's permission for an EFT credit?
You need the payee's name and account details to send a credit. You do not need an agreement, because you are paying them.
Do I need an agreement for an EFT debit?
Yes. Your customer's signed PAD agreement sets the debit schedule and whether the amount is fixed or variable.1 Send the confirmation before the first debit and the required pre-notification before a change or a later variable-amount debit.2
Can a credit be returned?
Yes. The payee can refuse a credit up to and including 90 calendar days after it was processed to their account.3 A returned credit cannot be re-presented.4
Which settles first?
Neither direction settles first. Banks settle both on the business day following the Due Date.5 The payee can use a credit within 2 hours of the receiving exchange deadline at a same-day branch, or by the opening of business on the Due Date at a branch with a longer lead time.6