At least twice or thrice per month, I’m sure you do make several money transactions. Whether it’s paying for your child’s school fees or sending your employees their salaries or transacting with your business partners. You do transact in money often and that’s why we want to share with you some tips on how to transfer money from one bank account to another.
Of course, we’re sure you know how to fill a check and deposit it to a respective account. So, our discussion will not focus much on that area. After all, filling a check might require you to go to the bank and that’s now inconvenient… or should we say time-consuming? With the new, contemporary technology one no longer needs to leave the comfort of his home to send money from his bank.
Anyways, let’s look at some essential tips when it comes to transferring money from one bank account to another. Then, we look at some of the ways you can use to make successful money transfers and more conveniently.
Information Needed When Transferring Money between Banks
Although we have several ways that you can use to transfer money, there’re some basic but important details you ought to have in hand. This includes the knowledge of the amount of money you want to transfer and that available on your primary account. In case you try using money that you don’t have, your desired transaction will not go through. And if it does go through, you’ll have to incur later for extra charges, such as an overdraft fee.
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Another thing you need to have while transferring money from one bank to another is the respective Account Numbers for both of the accounts. In the majority of the scenarios, you’ll even need to have the Routing Transit Number, which is very crucial in regions like the United States. If you’re the one sending the money and you have a checkbook with you, the two numbers are very easy to discern.
With the Bank of America, for example, your (sender’s) Account Number is usually the center number along the bottom of your check. The Routing Transit Number, on the other hand, is the left-most number along the bottom of the check as well.
Last on the information you need to have when sending money from one bank to another is the name and address of your bank. The bank address is where you opened your account and it’s often printed on your regular statements or other documents you have received from your financial institution. The information is really important and if you’re having a bank wire transfer, you’ll even need that of your recipient.
How Long Does It Take To Transfer Money Between Banks?
Well, that depends on the means you’re using. With some methods, it can be a matter of seconds and others can take days to fully complete the transaction with the respective accounts. While sending money, by the way, you have to note almost all the banking institutions facilitate transactions only on business days. I.e., Monday through Friday (excluding public holidays). Tips on how to transfer money from one bank account to another.
Ways to Transfer Money Between Banks
Automated Clearing House, (or simply ACH) transfer is one of the most used means when it comes to making bank transactions in the U.S. The method involves the movement of money between banks using an electronic network (intermediary) that routes the funds to the final destination. ACH is run by the National Automated Clearing House Association (NACHA), which sets the rules and standards that financial institutions should follow while transferring payments.
Automated Clearing House Transfer usually complete transactions by either debit or credit means. With the ACH debit transaction, the money is automatically pulled from an account by the company (recipient) you owe. This is predominantly used for a recurring bill payment.
For the ACH credit transaction, on the other end, you get to “push money online to bank accounts you want to send to. The accounts can either be your own or family members’ or associates’. Continue reading to know about how to transfer money from one bank account to another.
As for the cost of money transfers, the ACH debit transactions (including bill payments and payroll direct deposits) are usually free. With the ACH credit transfers, nonetheless, you can either complete the transactions free or at a small fee of around $3.
When it comes to the delivery time, ACH transfers can take a couple of business days to complete a transaction. If it’s the ACH debit transactions, the transfer often processes by the next business day. With the credits transfer, though, the process can go through within the same business day or in one/ two days. This is so as ACH transfers get processed in batches only 3 times a day. Hence, it largely depends on the kind of traffic available on a particular day.
Well, if it’s convenience in the delivery of your monetary transactions, Wire transfer is the method you need. Be it an emergency at home or you want to send money abroad, the money transfer method totally guarantees you peace of mind. Also, Wire transfer works electronically from one bank account to another. The method, though, can be used with a nonbank provider like Western Union or TransferWise.
If you want to make a bank wire transfer, you must be ready with the details of the one getting the money. This includes details like the bank name and address, account number, etc.
With the delivery time and cost of wire transfers, the process predominantly depends if it’s domestic or international.
Just like the Automated Clearing House, Wire transfers do have an intermediary to facilitate a successful transaction. The money doesn’t go straight from your bank account to the other. The payments go through a real-time wire processing system, such as FedWire, which clears and finalize the delivery.
Like we have just stated, the cost and delivery time in domestic and international wire transactions vary greatly. With the former, the transfer can be processed on the same day, within a few hours. If it’s an international wire transfer, nonetheless, the process can take up to five days as it will involve different clearinghouses.
Let’s say you’re sending money from an American bank to Australia, for example, your transfer will involve a U.S. clearinghouse and at least one Australia’s processing system.
Um, when it comes to sending money using wire transfers, the cost can be a bit expensive than the other means. This includes both the end of the sender and that of the receiver. Let’s say you’re in Maryland and you want to send some funds to a person in Pennsylvania. You’ll have to pay a charge of around $25. With the account holder in Australia, however, you might have to incur a fee of around $43.
In either of the wire transfers, the one receiving the money might have to pay a certain fee to his bank to access his funds. The fee is normally around $8 but you can find some charging up to $15.
P2P Payment Services (Internet-Based)
Peer-to-peer or P2P payments service is a form of money transfer which allows you to send funds to a bank account using software applications. It’s a product of modern technology but which is trying to pick up at the moment. The form of payment is either enhanced by big companies like Google or by a product startup company that partners with a particular bank.
A peer-to-peer payment system usually has its own funding requirement to facilitate a complete transaction. Some will require you to connect with your bank accounts and others will only need the debit/ credit card details.
Well, while it’s already ready to expand its growth, P2P payment has one of the biggest setbacks of all- safety. Following the high rise of hacking today, a lot of people are very cautious when it comes to completing their transactions through peer-to-peer payment systems.
Nonetheless, this form of money transfer provides fast deliveries since you can send funds to your friend’s account within minutes. In some cases though, it can take 1 or 2 days for a complete transfer to go through.
Some of the most used P2P payment services include Venmo, Zelle, PayPal, Google Pay, Cash App, Apple Pay, and those from individual banks.
Last on our subject of how to transfer money from one bank account to another is the use of the old-fashioned checks. The reasons we’re calling them old-fashioned is because they’re hardly in use now that we have wire transfers and mobile banking (P2P Payment services).
Anyways, using a check to transfer money to an account normally depends if you’re not in a rush of it. Even though some banks will allow you to do mobile check deposit, a check deposit can take up to 7 days to fully complete a transaction. This is so as the deposited check takes about 2 business days to clear and up to 5 days for the bank to receive the cash.
Amongst Them, Which Is The Best?
Well, that depends! Just like every person has a distinct taste of dishes, so does the way of transferring money to another bank account. Each of the ways we have shared with you has got its benefits, as well as drawbacks. If it’s the case of an emergency, you can go for a wire transfer or if possible you go for the Peer-to-Peer payments service. The two methods usually process transactions fast, though, at a certain fee.
If you’re a bit cautious with your banking details and you/ the recipient isn’t in a rush of it, a simple check will still do. Just make sure your bank account has enough money to prevent the check from bouncing.