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Money transfer is one of many common banking operations. You can use a wire transfer to transfer money from check to savings, pay off your credit card balance, pay bills, or send money to friends or family. There are a few methods of transferring money from one bank to another that you should be aware of, so that you can transfer money as efficiently as possible while minimizing fees.
Here are some common ways to transfer funds, with various considerations for transaction time and expense.
Transfers between connected accounts
If you have multiple accounts with the same bank, such as a checking account and a savings account, it is relatively quick and easy to set up a transfer between these connected accounts. This is also known as the “internal transfer” of funds. Go to your bank’s online banking platform or mobile app and search for options to set up a money transfer. You should also know the pros and cons of linking your bank accounts.
You will usually have the option of setting up a one-time transfer or a recurring transfer. Most banks will allow you to choose to transfer funds immediately (during the current business day) or set a future transfer on a specific date. If both of your accounts are already connected, the bank can approve the transfer immediately, within the same business day. If this is the first time you are signing in to a new account, it may take 2-3 business days to process the first funds transfer.
Transfers to external accounts
What if you have accounts at two different banks? For example, suppose you have an online savings account at a bank separate from your regular checking account. In this case, you can connect your online savings account to your checking account and set up an “external transfer”.
To transfer money to an external account, you will need the bank routing number and account number of both accounts: the external account receiving the transfer and the account you are transferring money from. The bank that will receive your transfer can help you set up the transaction. Once the accounts are linked, you will generally be able to make future transfers to this external account without having to re-enter your routing number and your account number each time.
Most of the bank transfers that you need to make in everyday life, such as signing up for direct deposit of your paycheck or using online bill payment, are types of electronic funds transfers ( TEF), where money is sent back and forth via electronic payment networks. One of the most common types of transfers occurs over an electronic funds transfer network called the Automated Clearing House (ACH). With an ACH payment, banks make payments on behalf of customers, verify accounts and confirm amounts, transferring money within one to three business days.
Most ACH bank transfers and other EFT payments are processed at no additional cost to customers, but be sure to check with your bank to be sure.
There are many payment apps currently available – Venmo, PayPal, CashApp, Zelle, and others – that transfer money between people during peer-to-peer (P2P) transfers. These apps are a quick way to send money to friends or family or make payments to small businesses, often at no cost or for a small fee that equates to a small percentage of the total amount of the payment. transaction.
Make sure you understand the fees, schedule, and limits of each P2P app before using it to transfer money. For example, Zelle has a transaction limit of $ 500 per week, Venmo allows you to send $ 4,999 per week or less, and Facebook Messenger limits are subject to bank limits. Some payment apps do not allow international transactions. If you need to send money to someone in a different country, you may need to choose a different payment method or be prepared to pay a higher fee.
If you need to transfer a larger amount of money, bank transfers can help you send money quickly and securely. However, wire transfers are often chargeable. Wire transfer fees depend on the bank and whether you are transferring money domestically or internationally, but sending or receiving a wire transfer can cost anywhere from $ 15 to $ 50 or more.
Bank transfers are widely regarded as a fast and highly secure way to send money. If you send a wire transfer to another bank in the United States, the funds may be available within a business day or even within hours. Sending an international transfer may take longer to process.
When doing a wire transfer, make sure that you are transferring the money to the correct recipient and not to a scammer. Wire transfers cannot be canceled once they are processed.
Write paper checks
Another easy way to transfer money from one bank to another is a classic, low-tech option: write a check. When you write a check, you authorize your bank to transfer funds to the recipient. You can also write a check to yourself if you need to transfer money from one account to another or make a deposit to a new account.
Now that mobile check deposit has become so mainstream with mobile banking apps, you can often write and deposit a check from the comfort of your own home. Keep in mind that checks are not an instant form of money transfer. It may take a few business days for the check to be deposited and cleared, during which time it will be listed as a pending transaction in the deposit account.
The financial system is designed to allow people to transfer money as easily and efficiently as possible. Whether you’re direct depositing your paycheck, signing up for online bill payment, or sending your friend $ 50, there are more ways than ever to send money fast, without having to queuing at a bank or filling out a deposit slip.
Many of these high-tech payment and transfer options can be done at low cost or at no cost. Check with your bank and read the fine print on all payment apps to understand the fees and processing times for your transfer. Some types of money transfers require you to wait a few days for the transaction to be processed, while other transfers take place on the same day or even instantly. Understand your options and decide which form of money transfer is right for you.