Have you ever wondered about the best way to transfer money from one bank to another? If so, you’ve come to the right place. Depending on which banks you use, your timeline, and other factors, you can choose from several options. In this article, we cover several money transfer methods, along with detailed information about each one, to help you pick the right one for you.
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Ways to Transfer Money From One Bank to Another
Each option featured in this article has different advantages and disadvantages. We’ll share what you need to know about how to transfer money between banks, fees, and more.
1. Online Bank-to-Bank Transfer
How does it work? Performing an online bank to bank transfer means you’re transferring your money from your bank account to an account at another bank.
When doing this, your name must be on both bank accounts. Additionally, both banks must accept bank-to-bank transfers, which typically isn’t a problem in this day and age.
You will need to connect your two banks by logging into your account online at one bank and then searching for an option to add an external account, link an account, or similar terminology.
Once you find that option, you will need to input the routing number of the bank you want to link and your bank account number.
The first bank should verify electronically that the accounts are linked if you’ve input the correct information. After that, you should be able to perform a transfer just like you would between two accounts at that same bank.
Just be sure you’re transferring “to” your external account.
How long does it take? Unfortunately, the answer to that question is anyone’s guess. You’re at the mercy of the transferring bank, so your bank-to-bank transfer could happen in a few minutes or take up to a few days. You may want to choose another option if you’re in a hurry to get your money where it needs to be.
What does it cost? Most banks do not charge a fee for bank-to-bank transfers, but some do. See your bank’s fee schedule to know for sure what a bank-to-bank transfer will cost you.
2. Peer-to-Peer Payments
How does it work? When you transfer money from one bank account to another using peer-to-peer transfer apps, you depend on a third-party service to assist you.
Peer-to-peer (P2P) transfer apps such as Venmo or Zelle allow you to send money from your bank account to another bank account. (but keep in mind that Zelle has payment limits)
Typically, the money they transfer comes directly out of your bank account, although some P2P transfer apps allow you to use your credit card to transfer the money.
You can transfer money to your bank account or someone else’s with a P2P app. Reputable money transfer apps have security measures to protect your money and your information.
However, there is always some risk when using a P2P money transfer app.
How long does it take? Depending on the app, a P2P transfer can be as quick as a few minutes or take up to three days.
Transfer apps such as Venmo or PayPal can take up to three days to complete a transfer. Zelle works instantly in many cases.
Some apps, including PayPal and Venmo, will transfer instantly for an additional fee.
What does it cost? While every app has different pricing, PayPal will charge you 2.9% + $0.30 and an additional fee if you want an instant transfer. There are cheaper alternatives to PayPal. Venmo is free for longer transfer times but charges for instant transfers, and Zelle is a free money transfer app.
3. Wire Transfer
How does it work? A wire transfer is an electronic transfer of money between financial institutions, like banks and transfer agencies, i.e., Western Union. With a wire transfer, the transaction is entirely electronic, and no actual cash exchange is performed.
Almost all banks can send and receive wire transfers. You’ll need the receiving bank’s routing number and the bank account number of the recipient to transfer money from one bank account to another account at a separate bank.
Note: If you’re using a transfer agency such as Western Union, you must bring cash to the transfer agency to wire to a bank account.
How long does it take? Financial institutions can often complete within a few minutes or hours – it rarely takes days. Longer processing times most often occur when you send an international wire transfer.
What does it cost? Domestic wire transfers generally cost anywhere from $0 to $15, and international wire transfers typically cost $20 to $30 (sometimes more), depending on the institution. Sending a wire transfer is usually more expensive than receiving one. With the rise of online banks, wire transfer fees are decreasing.
4. Write a Personal Check
How does it work? Simply write a check on the account you want the money to come from. This old-fashioned way of transferring money between banks still works, even if it’s inefficient.
Then, use snail mail or personally deliver that check to the bank where you want the money to end up.
How long does it take? Once the second bank receives the check, they will usually credit the receiving account within one business day. Some banks might take longer to credit the receiving account.
What does it cost? Aside from the minimal cost of writing the check and the transfer method costs (stamp if you’re using snail mail, gas money if you’re driving to the receiving bank), it’s free to transfer money between banks using a check.
5. Get a Money Order/Cashier’s Check
How does it work? Getting a money order or a cashier’s check from your bank is easy. Simply bring cash in the amount of money you want to transfer.
Or have your bank teller withdraw the money from your account. Then ask them to print out a money order, or cashier’s check addressed to the recipient’s name. Take that money order or cashier’s check to the receiving bank and deposit it into the intended account.
How long does it take? Banks typically process money orders and cashier’s checks within one business day.
What does it cost? Many banks charge a small fee (less than $5) for cashier’s checks and money orders – some still offer them for free.
Final Thoughts on Transferring Money Between Banks
As you can see, there are several ways to transfer money from one bank to another. The method you choose will depend on how fast you want the money there, the types of transactions your banks allow, fees, etc. Knowing your options helps you choose the correct transfer methods for your needs.