If you have funds spread between different financial institutions, you may be wondering what’s the easiest way to make transfers between them. There are several ways you can do this. Online transfers are usually free at online banks and at some traditional banks, but there are some who charge for the service. Before setting up your first funds transfer, you’ll want to check with the bank to see if they charge, so you won’t be charged unexpected fees. Below is all the information you need to know on how to transfer money from one bank to another.
How do Banks Transfer Money?
Banks use the Automated Clearing House, or ACH, system to transfer money. For example, when you receive a direct deposit paycheck from your employer, that was done via ACH.
The system was created during the 1970s as a cheaper alternative to wire transfers and faster alternative to checks. This electronic system transfers money overnight in large batches. While it’s a faster system than most other transfer options, it’s also more secure than wire transfers and other electronic payments forms because it’s backed by the NACHA.
How to Transfer Money from One Bank to Another
Moving money from bank to bank is a common occurrence for many people. In fact, it’s common for people to use two or more banks for business and personal matters. Since setting up an external transfer can be tricky, we’ve created an example to explain how to set one up on your bank’s website. “Bank A” will represent the bank you are transferring money from, and “Bank B” will represent the bank you’re moving money to.
- Navigate to your bank’s site to link the accounts. You’ll need to log in to Bank A and choose “Transfer Funds”, and then locate either “External Accounts” or “External Transfers”. Choose “Add an external account”.
- Provide proof of ownership for the account. You will need to verify that you own the Bank B account with Bank A.
- Give the required information. Bank A will require the routing and account number for the account at Bank B. They will also ask if the account is checking or savings.
- Verify the account. Bank A will make you further verify ownership of the Bank B account in one of two ways. This process can take a day or two to complete.
- Ask for the password and username to log in to Bank B.
- Bank A will initiate a few small transfers to Bank B. You will need to log in to Bank B and report back the exact amounts of each deposit to Bank A.
- Begin making transfers. You should now be able to make transfers between the two accounts.
Usually money transfers between two accounts do not cost anything. Yet sometimes, you will find that there’s a daily limit on how much you can transfer. Check with your bank to determine their specific policies.
What Info will you need to Transfer Money?
Here is the information required to transfer money from one bank to another:
- The Bank Name. You will need to know the name of the bank you’re transferring to, along with the address in some instances.
- Checking or Savings? You will need to know if the account is a checking or savings account.
- Business or Personal? They will also want to know if the account is a personal or business account.
- The Routing Number. Every bank has a nine-digit routing number assigned to it. The number is vital to ensuring your money ends up in the correct account at the correct institution. Some banks have more than one routing number, so always make sure you are using the correct one.
- The Account Number. Account numbers are anywhere from eight to twelve-digits and are associated with unique accounts. Let’s say you have a checking and savings account at the same bank, each account will have it’s own account number to differentiate between them.
Bank Transfer Alternatives
Thanks to technology, there are lots of alternatives to bank transfers. Here are the most common ones:
Apps
There are lots of apps that make bank transfers much easier than doing it the old-fashioned way. Here are the best apps to use:
- Zelle – Many banks have the Zelle app built right into their own websites. This is an easy way to move money, and the best part is it’s instant.
- PayPal – This is another fast method where you can transfer money to yourself or friends and family. They have instant options, but charge nominal fees for this most of the time.
- Venmo – This app is a lot like PayPal. You can make instant transfers, and send money to other people as well.
- Cash App – Another great peer-to-peer option that allows you to send money to someone else’s debit card or bank account. It’s similar to Venmo, but tends to be more private.
There are lots of others, but these seem to be the most popular.
Write a Check
If you don’t want to use a third-party app, you can also simply write a check to transfer funds from one account to another. Even if you don’t have a checkbook, there are many banks that will give you some free checks per year. If they aren’t free, there may be a small fee for them. Here’s how you go about transferring money this way:
- Write a check on the account you’re moving money from.
- Deposit the check at the bank you want to move the money to.
Wire Transfers
The last option you have is to use a wire transfer. This is an electronic method that usually doesn’t even require you to go to the bank. There are lots of wire transfer providers such as Western Union that you can choose from. Just keep in mind that such services usually charge fees. Here’s the information you’ll need to complete the wire transfer:
- The recipient’s name
- The destination
- Transfer amount