How to transfer money from one bank account to another – Forbes Advisor UK

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Every day, millions of people transfer money from one bank account to another – between their own accounts, to friends or family, and to pay businesses or businesses.

Online bank transfers have become much more common since the move away from cash and checks. But it pays to be careful in order to be sure that your money is safe and reaches the intended recipient.

Online bank transfers

Online bank transfers are the most common way to send money to another bank account. You can transfer money to an account:

  • in your name with the same bank
  • in your name at another bank
  • owned by a friend or family member
  • owned by a small business (i.e. a plumber) or a larger business
  • detained in another country

You can set up a wire transfer using online banking or your bank’s mobile app.

What are faster payments?

Most bank transfers are sent using the Faster Payments system which is free for personal banking customers (business bank accounts may charge a fee).

As the name suggests, transfers are done quickly. The money usually arrives in the recipient’s account within two hours, although sometimes it can be right away.

To make a transfer, you will need the following information for the recipient (or “beneficiary”):

  • Last name
  • sort code (six digits)
  • account number (eight digits)
  • whether it is a personal or professional account

You will also be asked for a payment reference. You can simply enter the name or the reason for the payment – for example, “Emma” or “Laura’s birthday”.

Your bank will ask you how much money you want to send and when you want to send it.

Are the account name and details correct?

In the past, some people have entered the sort code and account numbers incorrectly and ended up sending money to the wrong person (which can be very difficult to recover).

As a result, in 2020, Pay.UK introduced ‘beneficiary confirmation’. This is a name verification service that verifies that the account details entered for an online bank transfer match the recipient’s name.

Not all banks are listed for beneficiary confirmation, but most are. If your bank participates, they will let you know if the account and name details match or not. If they don’t match, you can choose whether or not to proceed with the transaction.

Once you send someone money once, their details will be stored on your mobile or online banking. This means you can send payments faster in the future.

Different banks take different approaches to setting up new payees securely. Some only allow you to do this on online banking, not on a mobile app. Others text you each time a new beneficiary is created on your account or ask you to use a card reader to verify an initial transfer.

You may also be asked questions such as “Do you know the person you are sending money to?” or “Did someone contact you out of the blue to ask for money?”

Transaction limits

Technically, you can send up to £1 million using Faster Payments, but banks generally won’t allow this amount from a personal bank account.

Each bank sets its own limit on how much you can send per transaction or per day. For example, First Direct lets you send £49,999.99 a day, Natwest £20,000 and Lloyds £25,000.

Some banks allow you to set your own limit.

If you need to send someone a large sum of money, you may need to break it up into smaller payments over consecutive days.

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International bank transfers

You can also make international bank transfers using mobile or online banking.

To make a transfer, you will need the following information from the recipient:

  • name and address
  • International Bank Account Number (IBAN)
  • bank name and address
  • the bank identifier code (BIC) of the bank

Sending money abroad using your bank account is easy and convenient, but the exchange rate is likely to be low and you may also have to pay a fee.

Cheaper and faster international transfers are available via Wise or Revolut, or multi-currency current accounts. But for large transactions it is better to use a currency broker.

Mobile phone payments with Payment

Paym is the UK’s mobile payment system and is most often used by friends and family sending money to each other. There are no fees and you can send up to £250 per transaction this way.

With Paym, your bank details are kept secret and your mobile number is used as a substitute.

Both parties will need to be registered with Paym to complete a transaction – you can register for the system in your mobile banking app. Then, when someone wants to send you money – for example, a friend who owes you money – you can simply give them your mobile number.

Other means of payment

If you are not comfortable with online or mobile banking, you can make bank transfers over the phone or by visiting a bank branch.

You can also always write a check. Just keep in mind that not all companies accept them yet.

What is a CHAPS payment?

CHAPS stands for Clearing House Automated Payment System and is a way to quickly send large sums of money between UK banks. There is no limit on the amount of money you can send this way. Assuming you make the payment before a cut-off time (normally 3:30 p.m.), it will arrive the same day.

You must set up a CHAPS payment over the phone or at a bank branch, although some banks allow you to do this online. This normally costs around £20.

CHAPS is typically used when you buy a house and need to transfer money to your attorney on the day of completion.

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