How to transfer money from one bank to another

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Maybe you need to pay a bill or send money to a friend. Or maybe you found a high-yield savings account with a higher interest rate at another bank. Either way, you’ll likely need to transfer money from one bank to another. 

It's pretty easy to move money between different bank accounts and you have a few different methods to do so. The best option for you will depend on the amount you're transferring, how quickly you need the funds to be available, and any fees involved. Let's explore the most common methods.

1. Direct bank-to-bank transfers 

Many banks offer the ability to transfer funds to other accounts online. This is often the easiest and fastest way to transfer money between your accounts or to send money to someone else.

“Many banks are now offering to link accounts through services such as Plaid that allow you to send money without entering your account and routing number," Jay Zigmont, certified financial planner and founder of Childfree Wealth. With Plaid, you log in to your other account, and it connects directly.  The other bonus of using Plaid or similar services is that it tends to be a quick transfer.”

To be able to use bank-to-bank transfers, the first thing you need to do is link your bank accounts. When you sign in to your online banking website or app, you’ll usually see an option to link external bank accounts.

To set up a direct bank-to-bank transfer, you'll need to log into your online account and navigate to the "Transfer" or "Payments" section. If you’re moving money between two accounts at the same bank, you can simply select the account to which you want to move money and complete the transfer in a few clicks. This type of internal transfer goes through almost instantly. 

If you’re sending money to an account outside your bank, you can select the option to add an external account. If you’re the owner of the external account, you'll need to verify ownership of your account. Once that's done, your accounts are linked, and you can start making transfers. 

If your bank doesn’t offer that option or you’re sending money to an external account that you don’t own, you'll need:

• The recipient's name and address
• The recipient's bank account number
• The recipient bank's routing number

Your bank may ask you to verify the linked account by confirming small test deposits or providing authentication. 
Once the accounts are linked, you select the account you're sending money from and the linked account you're transferring money to. Once you enter the amount you wish to transfer and confirm the transaction, you’re done.Funds are typically taken from your account within a day and credited to the receiving account within 3-5 business days.

Direct bank-to-bank transfers are often free. It's important to check with your specific bank, as some may charge a fee for outgoing or incoming transfers.

Direct transfers are an affordable and easy way to move money via your phone or online account. Linking accounts may take a few days to set up, and external transfers can take a few days to complete. There may also be limits on how much you can send in a single transaction.

2. Wire transfers

Wire transfers are a fast, secure way to send money, particularly for large international transactions. You may also use a wire transfer to make a large purchase, like a down payment. When you initiate a wire transfer, you're instructing your bank to transfer funds from your account to the recipient's account.

Unlike bank-to-bank transfers, wire transfers don’t require linking an external bank account. Instead, you'll need:

• Your account details and identification
• The recipient's name, address, and bank account number
• The recipient bank's name, address, and routing number (for domestic transfers) or SWIFT code (for international transfers)
• The amount you wish to transfer

You can send a wire transfer to accounts within the US (domestic wire transfers) or outside the US (international wire transfers). When you send a wire transfer, you’ll usually pay a fee, with a higher fee for international transfers. Domestic wire transfers usually cost between $0 and $25, while international wire transfers usually cost between $35 and $50. Some banks may also charge the recipient incoming wire transfer fees.

Once the wire transfer is initiated, your bank will communicate with the recipient's bank to transfer the funds. Domestic wire transfers are often completed within 24 hours, while international transfers may take 1-5 business days.

It’s very important to be careful when making a wire transfer. Once you wire money and the payment is accepted, there’s typically no way to reverse the transaction. That’s one of the reasons wire transfers are commonly used in financial fraud.

3. ACH transfers

Automated Clearing House (ACH) transfers are processed through the ACH network, a secure system that connects banks in the US. There are two main types of ACH transfers:

• Direct deposit: Funds (like your paycheck from your employer) are electronically deposited into your account.
• Direct payment: Funds are withdrawn from your account to pay bills or make other payments.

To set up an ACH deposit, you'll need to provide the initiating party with your bank information, such as your name and address, bank account number, and routing number. This includes your employer for direct deposit or a billing company for automatic bill payments. 

Most banks will let you set up ACH payments for rent or mortgage payments, utilities, and credit cards. You can usually set up ACH transfers through your bank's online platform or mobile app.

ACH transfers are often cheaper than wire transfers — and, in many cases, free — but may take several business days to process. Funds are typically available within 2-3 business days.

Compared to other methods, ACH transfers offer a cost-effective and efficient way to move money between banks. They're best for regular, recurring transactions like paychecks or bill payments. However, due to their longer processing times, ACH transfers may not be the best choice for urgent transfers.

4. Peer-to-peer payment apps 

Payment apps like PayPal, Venmo, and Zelle allow you to send money to others using their email address or phone number rather than bank account information. These services are often linked to your bank account, allowing you to transfer funds easily.

To use a P2P payment app, you'll first need to download the app and create an account. You'll then link your bank account or debit card to the app, allowing you to transfer money to and from your linked accounts.
Once you’ve linked your account, you can make a transfer using these steps:

1. Open the app and select the option to send money.
2. Enter the recipient's email address, phone number, or username within the app.
3. Enter the amount you wish to send and any memo details.
4. Review the transfer details and confirm the transaction.
5. The funds will typically be deducted from your linked bank account or debit card and made available to the recipient within minutes.

When you send money through one of these apps, the app will pull funds from your bank account and credit the recipient’s account. Many apps offer free transfers when using a linked bank account but may charge a small fee for transfers funded by a credit card. Some apps also limit the amount you can send per transaction or day.

It’s important to be careful when using these apps. If you send money to the wrong person, it can be difficult to reverse the transaction. Someone who gets access to your phone may also be able to use one of these apps to send money to one of their accounts.

To be safe, only send money to people you trust and double-check the recipient's information before confirming a transfer. You may also want to enable available security features, such as two-factor authentication.

5. Check

While not as instant as electronic transfers, writing a check is still a way to transfer money between banks. When you write a check from one account to deposit into another, the funds will typically be available within a few business days.

To transfer money by check:

1. Write a check payable to yourself or the recipient.
2. Deposit the check into the recipient's bank account in person or through mobile deposit.
3. Wait for the funds to clear, which usually takes two to three business days.

You may want to use a cashier’s check or money order for bigger purchases. Both offer a secure alternative to cash or personal checks. 

How to choose the right transfer method 

Here are some key factors to consider when selecting a way to transfer your money:

• Speed: If you need funds quickly, wire transfers or P2P payment apps may be your best bet, as they typically offer the fastest processing times.
• Fees: Consider the fees that come with each transfer method and look for options that minimize costs. This includes ACH transfers or P2P apps with free bank account-funded transfers.
• Security: When transferring large amounts, use methods with robust security features, such as wire transfers or ACH transfers.
• Convenience: Choose a transfer method that integrates with your existing banking habits., whether it's online banking, mobile apps, or in-person transactions.

Here's a comparison table of the different transfer methods and their key features:

The best transfer method for you will depend on your specific needs and situation. Here are some general guidelines to follow:

• Bank-to-bank transfers are best for transferring money between your accounts or sending smaller amounts to friends or family.
• Wire transfers are best for larger amounts or time-sensitive transactions. They are also necessary for many international transfers.
• ACH transfers are best for recurring payments, direct deposit, or sending smaller amounts. These transfers are typically cheaper than wire transfers but slower. 
• P2P payment apps are best for sending money quickly to someone, splitting expenses, or paying small business transactions. This transfer method is typically low-cost or free but may have transaction limits.
• Writing a check is best for sending money when electronic transfers are not possible or when a paper trail is necessary. 

Common issues that arise with transferring money

While transferring money between banks is generally a simple process, issues can sometimes pop up. This includes:

1. Insufficient funds: If you try to transfer more money than you have available in your account, the transfer may be declined. Make sure you have enough money in your account before initiating a transfer.
2. Incorrect information: If you enter the wrong account number or routing number, your transfer may be rejected or sent to the wrong recipient. Double-check all information before confirming a transfer.
3. Transfer limits: Some banks have daily or monthly limits on the amount you can transfer. If you need to send a larger amount, you may need to initiate multiple transfers or contact your bank for help.
4. Processing delays: Transfers between banks can sometimes take longer than expected, particularly during holidays or weekends. Plan ahead and allow extra time for transfers to clear.
5. Fraud: If your bank suspects a transfer is fraudulent, they may delay or cancel the transaction. If this happens, contact your bank immediately to resolve the issue.

Frequently asked questions about transfer methods 

The bottom line

Moving money from one bank to another can seem difficult, but you have many options. Each transfer method has pros and cons, so it’s important to choose the right one for each task. Knowing how to move money between your accounts and the best way to do so is key to effective financial management.

Editorial disclosure: Opinions expressed are author's alone, not those of any bank, credit card issuer, or other entity. This content has not been reviewed, approved, or otherwise endorsed by any of the entities included in the post.