Guide: How to How to Transfer Money from One Bank to Another
For some, the thought of multiple bank accounts is more than they can bear. For others, multiple bank accounts spread over multiple institutions is just a given. For people in the latter situation, knowing how to transfer money between banks is essential.
Why do people have more than one bank account, and why do people bank with separate institutions? Transferring money between banks sounds like a hassle, and finances seem like they would be so much easier to manage if everything was carried out at the same bank.
However, it is not that simple. For one thing, people have different financial needs. Forget different financial institutions for a moment and think about why a person would have different bank accounts at the same bank that requires them to transfer money between bank accounts.
A married couple might have a joint checking account, individual checking accounts, and multiple savings accounts for different savings goals. This would make knowing how to transfer money to another bank account very useful.
And how about people with different bank accounts at different banks? Why have they burdened themselves with the trouble of transferring money between banks? For the same reason: different financial goals.
For your everyday checking account, you may want to use a bank that has several branches and ATMs, but for your savings account you might prefer to use an online-only bank that has a higher interest rate. In order to contribute to that savings account, you need to transfer money from bank to bank when you receive your pay.
There are a number of different ways to transfer money from one bank to another. Additionally, it is easier than you think to transfer money between bank accounts.
This article will go over how to transfer money from bank to bank, the different methods of transferring money from one bank to another, cheap ways to transfer money between banks, and how to transfer money to another bank account quickly when you need it urgently.
The Different Methods for Transferring Money Between Banks
These days, people are transferring money from one bank to another from their smartphones or computers through online banking. These methods to transfer money from bank to bank are typically faster than old-fashioned methods. Of course, these are not the only ways to transfer money between banks. People were trying to figure out how to transfer money from one bank to another way before online banking became so popular, and these methods are still in use today.
Image source: Pixabay
There are a number of different ways to transfer money from bank to bank and to find out how to transfer money from one bank account to another at the same financial institution.
Simply logging into your online banking and transferring money from one account to another (i.e., from your checking account to your savings account) is one way of how to transfer money from one bank account to another. You can also carry out this kind of transaction at an ATM in your bank’s network (if you are using an ATM outside the network, you can usually only make account withdrawals) or go to your teller who can transfer money between bank accounts for you.
The more traditional methods for how to transfer money from one bank to another are cash (obviously), bank drafts, checks, and money orders. Electronic options for transferring money from one bank to another include electronic transfers carried out by intermediaries or by your bank or intermediaries like PayPal or Western Union. And, of course, there are also direct deposits and wire transfers which are a few ways how to transfer money from bank to bank.
How to Transfer Money from One Bank to Another: Using Cash
It is perhaps the most straightforward way for how to transfer money from bank to bank. You simply deposit cash into the recipient’s bank account. In actuality, most recipients do the depositing themselves. They will receive the cash and then put it in their own bank account. But some people actually want to know how to transfer money from bank to bank by putting the money in someone else’s bank account.
Obviously, people have a lot of reasons to want security around who has access to the funds in their account. However, you likely won’t find many people objecting to someone depositing funds into their account. Still, if you wish to know how to transfer money to another bank using this cash method, you can do this by getting the account number and going to a branch of their bank. Of course, transferring money from one bank to another using this method will not allow you to withdraw funds or even know the balance in the account – it will just let you deposit the funds.
Drawbacks to Using Cash to Transfer Money Between Banks
Can you transfer money from one bank to another using cash? Certainly. In fact, it is a pretty straightforward process, although banks, in an effort to prevent money laundering, may flag very large deposits. For the most part, if you want to transfer money between banks using cash, this is as simple as withdrawing it from one bank and walking over to another and depositing it.
If you wish to transfer money between bank accounts that are both yours, it is as simple as depositing the funds the way you would deposit funds into any bank account that belongs to you.
There are a couple of cons to using cash to transfer money from one bank to another. If you are keeping lump sums of cash in your home or walking around with large sums of cash, your money is not secure.
If anything happens to it, there goes your money. At least with a bank account, if anything happens to the bank, the Federal Deposit Insurance Corporation (FDIC) has you covered up to a certain amount.
Moreover, if there is an issue transferring money from one bank to another electronically, you can follow up with your bank. There is no such recourse if there is an issue transferring money between banks using cash if it goes missing or is stolen.
How to Transfer Money to Another Bank: Checks
Using a check is perhaps the most popular method for how to transfer money to another bank. Want to pay someone or buy something without having to hand over a huge amount of money? You write them a check. Scribbling an amount on a piece of paper and signing it means an easy way to transfer money from one bank to another.
In this way, using checks as your way for how to transfer money from one bank account to another can be super convenient. On the other hand, accepting checks as a way to transfer money from one bank to another can mean trusting the person the check is coming from, especially if you plan on rendering the service or providing the product before the check has cleared.
If the person says he or she will transfer money from bank to bank using a check and the check bounces, you are then left with no money unless that individual makes good on what he or she owes.
Can you transfer money from one bank to another using a check where the funds are guaranteed? Absolutely. You can request what is known as a certified check or provide a certified check (if you are the one providing the funds). The bank certifies that the funds are available at the time the check is written, and those funds are set aside with the bank until the check is cashed.
This can provide additional peace of mind for those who wish to transfer money between banks using a check.
How to Transfer Money to Another Bank Account: Electronic Money Transfers
Bank Wire (or Wire Transfer)
Want to know how to transfer money to another bank account without the delays typically associated with trying to transfer money from one bank to another? Look no further than a bank wire.
A bank wire can be executed to domestically transfer money from bank to bank and to internationally transfer money between banks. If the receiving bank is in the same time zone as the sending bank, transferring money from one bank to another can be completed within a few hours.
Image source: Pixabay
Why don’t people transfer money from one back to another using bank wires more often if it is such a fast way to transfer money between banks? Simple: to transfer money from bank to bank via bank wire is expensive.
If you choose to transfer money from one bank to another using a bank wire, it can cost you anywhere between $25 and $40, depending on whether it is domestic or international. Why does it cost so much money to transfer money between banks using wire transfer?
Mainly, it is not a very efficient process for transferring money between banks. While banks are automating bank wires, a large portion of them are still carried out by bank representatives at either end of the transaction. Additionally, they have to be done one by one as opposed to more cost-effectively as a batch – the way other money transfers are.
If you want to transfer money from bank to bank similar to the way in which you would pay a bill online, ask your teller to facilitate this transaction. In this case, your bank may require you to provide the account number and routing number of the person/account you wish to transfer the money to. This way of transferring money between banks may take a few business days to process.
You may also be able to transfer money from bank to bank using this method online by filling out the phone through online banking.
Email Money Transfer
This is a rather speedy way to transfer money between banks. The money is delivered using the usual channels banks use to send money to each other, but email is used to notify the recipient that the funds are available. After receiving an email letting them know that someone wants to transfer money from bank to bank (their bank account) they can click on the link within the email, log into their account, and receive the funds to finish transferring money between banks.
This is a very convenient method for transferring money between banks, but this way to transfer money from one bank to another has become the target of phishing scams. Individuals send emails claiming to be a former employer or a government agency trying to transfer money between bank accounts and provide a link asking the recipient to log in, thereby capturing their log in information and gaining unauthorized access to accounts.
This is why it is very important to only accept money transfers from people you know. Take the additional step to ensure someone was planning to transfer money to you that day, just to be safe.
Intermediaries Like Western Union and PayPal
Can you transfer money from one bank to another using an intermediary? Absolutely. The most popular example for how to transfer money from bank to bank is arguably Western Union. Individuals can send and receive money around the world for a fee.
PayPal is another popular option for how to transfer money to another bank, serving as an online bank of its own.
PayPal is an accepted form of payment for many online vendors, is used by many who work online as a form of payment, and it comes with its own debit card and credit card products to allow people to make payments at physical vendors directly using the funds from their PayPal accounts.
It is important to note that if you want to directly transfer money from one bank to another in the way you can with Western Union, PayPal does not operate this way.
You can transfer money from your bank to PayPal, from PayPal to your bank, and from one PayPal account to another. However, you cannot use PayPal to transfer money from bank to bank. It only works indirectly.
Figuring out How to Transfer Money from Bank to Bank Is Unavoidable
At some point, we all have to pay someone, and, as our financial system becomes more and more digitized, figuring out how to transfer money from one bank to another will require learning how to transfer money from bank to bank electronically.
Even if you are in the rare and lucky position of always getting paid and never having to send money, you will want an understanding of just how that money is getting to you – and how long it will take to receive it.
While electronic money may present the illusion of instant transactions, it is far from the truth. Behind the scenes (or screens) are a lot of moving parts to ensure that money is not being moved for criminal purposes.
Banks are required to follow best practices and stick to government anti-money laundering and anti-terrorism regulations related to transferring money between banks. Transferring money from one bank to another is not always as speedy as we’d like it to be.
That said, financial technology companies are quick to improve our existing ways of transferring money between banks by coming up with better methods to transfer money from bank to bank while also making sure money is moving legally.
In the meantime, there are a number of options ranging from inexpensive to pricey to ensure you can transfer money between banks and get funds where they need to be.
AdvisoryHQ (AHQ) Disclaimer:
Reasonable efforts have been made by AdvisoryHQ to present accurate information, however all info is presented without warranty. Review AdvisoryHQ’s Terms for details. Also review each firm’s site for the most updated data, rates and info.
Note: Firms and products, including the one(s) reviewed above, may be AdvisoryHQ's affiliates. Click to view AdvisoryHQ's advertiser disclosures.