The Best Ways to Transfer Money Between Banks

The Best Ways to Transfer Money Between Banks

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We’ve talked at length about the benefits of switching your bank account to a high-yield savings or high-yield checking account. But once you’ve chosen the right one, how do you move your money into it?

Knowing how to transfer money from one bank to another is important whether you want to split your savings between multiple accounts at different banks, switch banks altogether, or send money to someone else. But with so many different options for moving money, it’s key to choose the right one for your needs to minimize the cost, time, and hassle required. 

Here’s what you need to know about the different ways to transfer money between bank accounts, and the best uses for each one. 

What Is a Bank Transfer?

A bank transfer sends money from one bank account to another. It can involve two accounts owned by the same person or two accounts owned by different people.

You might transfer money between banks for a few reasons. For example, maybe you’ve decided to switch to a new bank and need to move your money before closing your old account. Or you might maintain accounts at two banks, such as a checking account at a local bank and a high-yield savings account at an online bank, and want to transfer money between them.

You can also use bank transfers to send money to others. You might use a transfer to pay a friend back for a meal or split bills with a roommate, for example.

How to Make a Bank Transfer

There are many different ways to make bank transfers. While they all have the same end result – money moving from one account to another – they vary in their speed, fees, and a few other aspects.

We’ll break down what you need to know to choose the right form of bank transfer for your situation.

Pro Tip

Watch out for processing or transfer fees when transferring money from your bank account. Banks may charge different fees for different services, so check your bank’s fee schedule to find the lowest-cost transfer method that meets your needs.

Wire transfer

A wire transfer moves money electronically between two bank accounts domestically or internationally. They’re often used for large transactions, and banks tend to charge fees of about $25 for each outbound transfer. A typical domestic transfer takes a couple of days to complete. International wires may take as long as a week.

When you wire funds, it can be difficult to get your money back, which makes them a popular avenue for scammers looking to steal your money. You should only send a wire transfer to someone you know and trust.

Because wire transfers have much higher limits than other types of transfers, you’re likely to use them for large purchases, such as buying a home.

ACH transfer

An Automated Clearing House, or ACH, transfer is a way to electronically transfer money between banks through the Automated Clearing House network. 

Also known as Direct Deposit, direct pay, or electronic check, ACH transfers are one of the most commonly-used methods to transfer money from one bank account to another. You can use an ACH transfer to move money between your own bank accounts at different banks, or send money directly to another person’s bank account. You can also use ACH to receive money, such as a paycheck from an employer, or pay bills. 

ACH transfers typically take one to five business days to process. Different banks may have different processing times. Some banks may charge a small fee for outgoing ACH transfers, but most offer the service for free. Receiving money from an ACH transfer is typically free. 

You can make an ACH transfer through your bank account’s online or mobile banking portal. To make a transfer to another account, whether your own or someone else’s, you’ll need the account number, routing number, and name of the account you’re transferring to. 

Peer-to-peer transfer platform

Peer-to-peer transfer platforms are meant for sending money to and receiving money from other people. These platforms include email money transfer services, such as PayPal or Zelle, or mobile apps like Venmo, CashApp, MoneyGram, Apple Pay, Google Pay, and more. 

Most of these platforms will require you to create an account to send or receive money. Some, like Zelle, are tied to your existing bank account and can be accessed directly from your bank’s online portal or mobile app.

Moving money with these platforms is usually simple. First, you’ll enter your friend’s phone number, email address, or username, or scan a QR code. Then, enter the amount to transfer, connect your bank account or credit card to draw the money from, and you’re all done. That makes these tools a great way to quickly pay someone back or split a bill.

One feature of some of these programs is the option to keep funds in the app rather than immediately transferring them to your bank. Brett Holzhauer, a Florida-based certified personal finance counselor, advises against this, though. 

“Venmo and Zelle are great ways to move money for free but should not be a substitute for a bank account,” Holzhauer says. “It should be money-in, money-out. Make sure the balance is always zero”

The reasons are twofold. If you keep your money in the app, “You’re not getting any interest, you’re just giving them a zero-interest loan,” he adds. “It also exposes the money to fraudsters who could steal your account. More money in more places means more headaches.”

Write a check

Checks might seem outdated in today’s world of electronic transfers, but they’re still one of the easiest ways to move money between banks.

You simply write a check from one account and then deposit it in another (or give it to someone else to deposit into their account). Many banks give you the option to deposit a check by taking a photo with your phone, without needing to visit a branch. 

There are two types of checks: personal checks and cashier’s checks. 

Personal checks are the most common type. The check writer guarantees that they have enough money in their bank account to pay the check amount. If the account does not have enough money, the check will “bounce” — meaning the recipient can’t cash it — and the check writer might be charged a non-sufficient funds (NSF) fee by their bank. Personal checks are typically free to use, although you may have to buy the physical checks from your bank or another provider. 

Unlike personal checks, cashier’s checks are written and guaranteed by the bank, not an individual. This makes them less convenient to use, but less risky for the recipient. To get a cashier’s check, you’ll need to visit your bank and provide the teller with the check recipient’s information and the check amount. You’ll then receive the check from the teller. Banks typically charge a fee for this service. 

Checks allow for large transfers between two accounts and an easy way to send money to another person. However, it can take multiple days for large checks to clear, making this one of the slower options for moving funds. 

Benefits of Bank Transfers

There are a few benefits to using bank transfers to move money from one bank account to another:

Send money to other people

Bank transfers are one of the easiest ways to send money to a friend or family member. Whether you want to split a bill, pay back money you borrowed, or send a gift or allowance, it’s easier to transfer money directly from your bank account instead of exchanging cash. 

Bank transfers are also safer than cash when you need to exchange large amounts of money, such as if you’re paying rent to a roommate or a landlord. 

Switch banks more easily

If you’re switching to a new bank, bank transfers can quickly move your funds over. 

Switching banks can be a smart financial move if you have a good reason to make the swap, says Sarah Gerber, a Colorado-based CFP and Director of Product at MoneyLion. “Having a good reason is important because it means you’re being strategic. It gives you the chance to reevaluate what your bank account does for you,” she says.

Some reasons to switch your bank account include merging your finances with your partner, switching to a different bank with local branches when you move to a different city, or consolidating money stashed at several banks into one account, says Gerber. If you find yourself switching to a new bank, direct bank-to-bank transfers can simplify the process of moving your money over.

Move money between banks

It’s not unusual to have accounts at more than one bank. For example, you might have a checking account at a local bank and a high-yield savings account at an online bank. Bank transfers make moving money between the two simple so you can enjoy the benefits of both accounts while still being able to easily access your money from either account.

Earn bonuses

Many banks offer bonuses if you open a new account and receive direct deposits or move money. Some banks require you to set up direct deposits from your paycheck to receive the bonus, while others may have you transfer funds from another bank account to your new account. Either way, knowing how to transfer money between banks easily and without fees is essential to taking advantage of bank bonuses. 

Holzhauer is a proponent of this strategy. “I switch banks 2 to 3 times a year and sometimes open bank accounts just for the bonus,” he says. He recommends going for a bank bonus if it’s worth $200 or more.

Things to Keep in Mind Before Making a Bank Transfer

Before you make a bank transfer, there are some important things to keep in mind:

  • Fees and limits. Different methods of transferring money have different limits and fees. Wire transfers, for example, can move large amounts of money but can cost around $25. Peer-to-peer transfer services are designed for smaller amounts but are generally free. Choose the service that lets you move the right amount of money for your needs at the lowest cost.
  • Avoiding scams. With some methods of bank transfers, such as wire transfers, it can be hard or impossible to get your money back once you’ve sent it. Watch out for scams when you’re transferring money this way. Regardless of which type of bank transfer you use, you should only send money to those you personally know and trust. You can check out the Federal Trade Commission’s website for more tips on avoiding scams. 
  • How long the transfer takes. If you’re under a deadline, you should consider how long a transfer takes to process in order to ensure you send the money in time. Mobile apps and email money transfers, like Venmo or Zelle, are typically instantaneous. Checks and wire transfers can take a few days for the recipient to get the money. 
  • Closing your account. If you’re transferring all your money to a new bank, it’s a good idea to close your old account if you don’t plan to use it again. “There’s no benefit in leaving an old bank account open,” says Holzhauer. “Closing the bank account is key because banks can hit you with insufficient funds or overdraft fees.”
  • Your connected accounts and automatic payments. If you’re switching bank accounts and transferring all of your money out of your old account, make sure to also update any automatic bill payments or recurring transfers associated with your old account. The last thing you want is to have a credit card or loan payment not go through because the bank account you’re drawing from no longer has any funds. And if you use any tracking or budgeting tools connected to your account, make sure your new bank account supports that functionality, says Gerber. 

Frequently Asked Questions (FAQ)

How long do bank transfers take?

How long it takes to move funds between banks depends on the method used. Apps can send money instantly while ACH and wire transfers can take a couple of days. Large checks can take as long as a week to clear.

Can I transfer all of my money at once?

Yes, you can transfer all of the money in your account at once. However, watch out for monthly fees, overdraft fees, or other charges from the bank that you’re taking money from if you plan to keep that account open with a zero balance.

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