How much does it cost to transfer money between banks?

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Transferring money from one account to another is a key part of managing your finances. You can’t afford to pay high fees just to have access to your own money. Image source: Getty Images.

Putting together a bunch of bank accounts to meet all of your needs can get tricky. At the simplest level, a good checking account gives you instant access to your money through writing checks, debit card transactions, paying bills online, or making good in-person withdrawals at the old in the branches of your bank. A savings account doesn’t offer the option of issuing checks, but it does give you other ways to get your money out fast, and it will usually pay a healthy interest rate to get started. For many, a money market account is the best of both worlds, including both higher interest rates and limited check writing privileges.

Sometimes you’ll find that the best accounts for each goal won’t necessarily be at the same banking institution. In this case, you will need to make transfers of that money between banks to ensure that the right accounts have the right amounts to meet your financial needs. If you have to pay a lot to transfer money between your accounts at different banks, it can ruin what would otherwise be a good strategy. Below, we’ll take a look at the different methods you can use to transfer money between banks, and the reasonable costs to expect for each.

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The four ways to transfer money between banks

Previously, the easiest way to transfer money between banks would have been to make a withdrawal at a branch and physically bring the money or a cashier’s check to a branch of the other bank. However, with the advent of online banking, it is rare that you have to resort to this tactic, although it may still remain an option in some cases.

Instead, most people use four main methods to transfer money from one bank to another:

  • Write a check on an account at one bank and deposit it at the other bank.
  • Arranging an electronic funds transfer using the automated clearing house network.
  • Ask your bank to send a wire transfer.
  • Use an application specializing in person-to-person money transfers.
  • We’ll take a look at each of them in turn below.

Sending a check

Obviously, sending a check is an easy way to transfer money from one bank to another. All you have to do is write the check, mail it to the other bank, and include instructions for depositing the check into the correct account. Most banks won’t charge anything for this, so you will only have to bear the cost of a postage stamp to handle the shipment.

There are, however, several drawbacks. First, it can take several days for a check to arrive in the mail. Even after your bank receives the check, it will take longer before the deposit is made and the funds are cleared. Additionally, this method only works if you have a checking account at the bank from which you wish to send funds. If you are trying to get money from a savings account into a checking account at another bank, you will not have a chance to use this strategy.

Make an ACH transfer

The most common way to transfer money between banks is by electronic funds transfer through ACH. This process is relatively quick, typically taking around one to three business days for the money to appear in the correct account. Many banks offer the service as a free benefit to the accounts. In some cases, a bank will offer expedited service at a higher cost, and a few banks will actually charge for outgoing wire transfers regardless of the time.

Most banks that have online access allow you to set up ACH transfers yourself. You will need the receiving bank’s banking information, including routing numbers and account numbers. If you need to go through a bank clerk to complete the ACH transfer, additional charges may be involved.

Bank transfers

The fastest way to transfer money is by wire transfer. With domestic transfers, money can be transferred on the same day, so you don’t have to wait to complete a subsequent transaction from the receiving account. Wire transfers are also available internationally, which is not usually available with a regular ACH transfer.

The big downside to wire transfers is the cost. Most banks charge a fairly high fee for wire transfers, with higher fees for payments, but lower fees for receiving wire transfers as well. International money transfers can become even more expensive as additional expertise is required. It is not uncommon to pay a total of $ 30 to $ 35 for a domestic transfer and $ 40 to $ 50 or more for an international transfer. However, for urgent needs, it is difficult to find a faster way forward.

Person-to-person payments

Finally, several services allow person-to-person payments that you can use to transfer money between your own bank accounts. Services include PayPal, Zelle, Popmoney, Square Cash, and Venmo, and while the specific mechanics of how they work differ, the bottom line is generally the same.

You will find many differences between these services in terms of duration and cost. One thing to keep in mind is that when transferring money between banks, you are acting as both the sender and the recipient. So even if a particular service offers free payments to the sender, you might have to pay a fee when you receive the money sent to the bank account where you wanted the money to go.

The big advantage of a healthy banking relationship

Once you start to look at the efforts of transferring money from bank to bank, it often gives you a new appreciation for the value of finding a single financial institution to meet all of your banking needs. If you can find a bank that will offer you a special relationship-based deal on multiple bank accounts – each of which is attractive enough to make them viable competitive options – then it may be worth taking a very slightly less lucrative offer. just to avoid the hassle and expense of transferring money between your multiple bank accounts elsewhere.

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