Whether you’re paying a family member, your friend, sharing bills with your roommate or even buying something, it’s likely the time comes when you need to transfer money between bank accounts. Luckily, it’s an easy task now as there are ample of services and options available as compared to a few years ago.
Transferring money between bank accounts is quite an easy task for the majority of people nowadays. If you are a newbie and don’t know where to start or what method is right for you, read out the article below to find out what you all need to know.
- 1 Transfer Money From One Bank to Another
- 1.1 Set up your Bank Accounts for Money Transfers
- 1.2 How You Can Transfer Money into Someone Else’s Bank Account?
- 1.2.1 Case 1: Send money directly from your bank account to another bank account
- 1.2.2 Case 2: Using a Service to Transfer Money:
- 1.2.3 Case 3: Sending Money To Bank Accounts Through Apps
- 1.2.4 Case 4: Old Liquid Cash Method
- 1.3 Conclusion:
Transfer Money From One Bank to Another
Before you can start transferring funds from one account to another, you need to link your accounts you have at different banks to each other: the one that sends money and the other that receives the money.
Set up your Bank Accounts for Money Transfers
Here are the steps mentioned with an example to set up your bank accounts for money transfers, let’s assume that Bank A is the bank you’re transferring money from, and Bank B is the receiver.
- First, you need to log in to Bank A and click on the “Transfer” section. Then click on “External transfers” or “External accounts” and from there click on “Add external account”
- To successfully add an external account (Bank B), you need to verify your bank account at Bank A. Bank A will verify that you have access to Bank B and you are the legal owner of Bank B as well.
- Bank A will ask you for Bank B’s bank account number and bank code, which you can easily find on a checkbook or from an online statement of Bank B. You also need to tell Bank A if your bank account is available at Bank B is a best savings account or current account.
- Bank A then asks you to verify your Bank B account in two ways: You can give Bank A username and password that you use for Bank B. This will immediately verify the account and you will be allowed to make transfers. Or, You can ask Bank A to arrange two small transfers to Bank B. However, Bank A will not disclose the amount transferring to account B. The only way to find this out is to sign up to Bank B online portal and see how much deposits Bank A made.
- Once the two small deposits have been completed, you can now login to Bank A and click on the “External Accounts” section. In some cases, “Check your deposit” is written there. Enter the amounts that have been transferred to Bank B and your account will be instantly verified.
- After reviewing the amounts, the bank will verify your account and then you can easily transfer money from Bank A to Bank B by clicking on the “Fund Transfer” section. You can configure recurring or unique transactions based on your needs. Bank transfers usually take 2-3 working days.
How You Can Transfer Money into Someone Else’s Bank Account?
If you’ve been living in the US, you’ve probably used cash at someone’s weddings, grocery shopping or either sent checks to family members for a birthday. But depositing money directly into someone else’s bank account without them intervening can be a completely new ball game.
The good news is that you are not stuck without options. Here I have described all three main ways to send money for someone else bank accounts:
- From your bank account to another person’s bank account
- Using a service that allows your beneficiary to withdraw money from your bank account.
- Using Apps to deposit money into your recipient bank account
Case 1: Send money directly from your bank account to another bank account
You may have heard of global applications and services that you can use to transfer money between bank accounts. (PayPal, Google Pay or more) But let’s be honest, your grandmother will probably never register on it as she maybe not that tech-savvy.
This means that if you send money to someone who is not tech-savvy, you may need other options for which recipients do not need to register on any online portal or download the app to their smartphone.
Here you can:
- Use a service like TransferWise to send funds directly from your bank account to another account inside or outside the US.
- Make a domestic transfer from your bank directly (this means is expensive but fast)
- Use the payment option for bank bills (works for a selected list of banks)
Option 1: TransferWise
TransferWise is originally a global money-peer platform that connects people and their money all around the world. Thanks to the new intelligent technology, local bank accounts have been linked in the respective countries, which has eliminated the high-interest rates of international banks. This allows users to determine the real exchange rate which is the same in the international exchange portal.
TransferWise was originally an international service that has been extended to national boundaries with the alternatives to the traditional banking system such as the multi-currency account.
You can register for a free unlimited account with no monthly fees. You will find low and fair prices if you change the currency or send money to the US, UK or abroad.
Once everything is set up and the review process is complete, you can activate your limitless account and start holding credit in dozens of currencies and you can send money all over the world not only limited to the USA.
To send money within the US with TransferWise for the first time, you’ll need to follow these steps:
- First, you need to sign in and register an account on transferwise.com
- On the left navigation bar, click on balances
- From there, click on Activate a currency
- Choose USD from the dropdown menu
- Once this section gets activated, click Add USD to add money to your US dollar balance (you can do it via your debit/credit card or by directly deducting money from your US bank account)
- Choose bank transfer at the payment step
- From there you’ll need to enter your US recipient’s or US bank details (full name, address, ACH routing number, and account number).
- Lastly, click on Pay for the money with your USD balance (the money you’re holding in your borderless account) and you’re done. The money will be available to your recipient’s bank account within 1-2 business days.
Advantages of Having a Transferwise Account:
- Once you set up and activated your account, you can send money online with one tap from your phone or computer.
- Money usually arrives at the receiver account on the morning of the next business day.
- Your receiver need not do anything to receive the money.
- You can pay with your debit card if the transaction amount is not too high.
- You can send money in the US or globally with ease.
Option 2: Wire Transfer
A wire transfer is the fastest way to deposit money electronically to another person’s account. The prominent feature of a wire transfer is that nonbank wire transfers do not require a bank account, depending on the service, they just require the recipient’s name, the transfer amount and the destination to transfer the money. There are two types of wire transfer available:
1. Domestic Wires
In this case, when you send money in the US, all you need to do is to collect some of the information from your recipient such as (name, address, wire transfer number and account number) and then introduce yourself to your bank branch. If your transfer is made within the time limit set by your bank, the money will be credited to the beneficiary’s bank account the same business day. A quite easy right.
For most banks, you need to make a personal transfer. If your bank is in another part of the city or the schedule is full, this can be problematic. Wire transfers may be expensive sometimes, especially for small transactions. Depending on the bank, the price can vary between $ 15 and $ 35 or more.
2. International Wires
If you want to make an international deposit, these costs increase even more. In addition to your bank’s initial fees (which may range between $ 35 and $ 60) and in addition to the costs collected by the receiving bank, you will be affected by low exchange rates and flat interest rates up to 3 %.
International transfers also take a little longer to deposit depending on the country of the recipient. It can vary between 1 and 5 working days.
As compared to cost and speed: It is almost always advised to use TransferWise in your bank for an international bank transfer (SWIFT).
Advantages Of Wire Transfer:
- Fast Deposit: Money transfers domestically in the United States can reach within one hour if your bank processes your order immediately.
- Less Hassle: Your receiver has nothing to do to get money.
Option 3: Billpay (Only For US Residents)
In this digital space, where people have no time to visit the bank physically, banks have heard the pain of their customers and implemented cost-effective ways to send money online. This method is often referred to as “BillPay” or “Payments / Online Transfers”.
It has the highest security standards backed by the latest encryption techniques to ensure that your online payments always remain safe and secured.
This means that you can log in to your online bank account and select an option to send money to your recipient’s bank account (only by giving the receiver’s name, amount, ACH bank code and number) account), without having to go to a bank branch.
But there are certain things you need to know before opting for it.
- Depending on your bank, they may need to issue a paper check and send it to your recipient.
- It can take between 1 and 7 business days for the money to arrive.
- If you use Bank of America, they offer overnight transfers but in several cases, it may take three days to deposit money directly into your recipient’s bank account.
Advantages of Billpay:
- You will be able to set up everything online within your online banking portal without, papers are the means of the past for these transfers.
- Most transactions are normally free or in cases, they cost very low interest.
Case 2: Using a Service to Transfer Money:
In this case, your recipient may need to sign up to get the money into their bank account. If your recipient is a technology expert and can register on different services online, you have even more options to deposit money into the bank account of another person.
This type of service can be provided in two ways:
- Your recipient will receive an e-mail or a notification and he needs to register with the bank details.
- Your recipient must register for the service prior and from there he can enter the bank details.
Where Recipient fill their Details
For some services, all you need is the email address or phone number of the person to whom you are sending the money. Once you have made the transaction, your recipient will receive a sort of e-mail or notification from the service provider from where you have sent the money.
Here, your recipient needs to enter his bank details (usually the 9-digit bank code and the account number found on his checks) and money gets deposited into their bank accounts.
The major disadvantage with these transactions is that, in most cases, once the recipient has entered his bank details, his bank account can forever be linked to that sender’s mobile / email address.
Here are some Of the Service providers which you can check out:
- Chase Quick Pay
- Wells Fargo SurePay
Advantages of Using these Services:
- You should be able to set up everything online without going to a particular bank.
- Paper-less and charge-free transactions on money transfers.
- Once a bank account is associated with a phone number or email, you can set up a direct deposit with their auto-withdrawal features.
Case 3: Sending Money To Bank Accounts Through Apps
Today, there are several applications whose sole purpose is to help you with money transfer. These applications are also known as P2P payment services, which are now used by the majority of people to send small amounts of money quickly and securely. The two most popular service providers are PayPal and Venmo.
Now, many banks also came with their P2P services such as cell and pop money.
If your bank has its hands on these services, you aren’t supposed to create an account then. It will be pre-included in your bank account. However, in most cases, you’ll need to create an account and link it to your bank account. The person receiving your payment must also have an account in most cases.
With these apps, you can send payments by linking a credit card/debit instead of a bank account. However, this is usually associated with fees. In this scenario, your recipient must already be registered with the same service.
For example, if you have done someone Paypal of $50, he must have a Paypal account with linked Bank accounts to receive the funds in their bank accounts.
Once you send the money to the recipient’s Paypal account the balance will show up as Paypal balance. Further, he can take the necessary steps to withdraw money or deposit it into his bank account.
The Popular Apps for Money Transfers Facilities Are:
- Facebook Messenger Payments
- Snapchat Snapcash
- PayPal (US domestic and international)
- Square Cash VenmoRead More : Venmo Vs PayPal
Advantages of using Apps for Bank Transfers:
- Your receiver may already be using the service.
- It is very easy to register
- You can set everything up online.
- It comes with generally low cost unless you send it to a business or internationally.
Case 4: Old Liquid Cash Method
If you and your beneficiary are prepared for an extra effort, you can always return to the old school practices to send money to the person in the US.
It is one of the easiest ways to transfer money to another person’s bank account. You can withdraw money from your bank account through a bank branch or from an ATM. You can then personally deposit the money to the recipient’s bank account by visiting the branch of your bank.
Here, you need some of the recipient’s information like the full name and bank account number. However, some banks do not allow you to deposit money into another person’s bank account directly.
Yes, you have guessed right. It is another common way to transfer money, you can simply use a cheque and send it to the person. Simply make a cheque in the name of the person you want to send money. The receiver will then deposit that cheque into their bank account and encash the money.
A money order is a safer alternative than cash or a cheque. Because it can be tracked and canceled if it is lost or stolen. Besides, since you pay in advance for buying money order, it means that you do not have to have enough money in your account until they are debited.
You can buy and Send a Money Order from places like:
- The Post Office
- The Western Union
- Through Walmart
You got to see numerous ways to transfer money from one bank to another. The best option for you depends on where you send the money, whether you have both accounts or not. If you need to transfer money to another account, you can link accounts through online banking. In this way, you can transfer money easily in the comfort of your home.
Taking cash and depositing can also work under certain circumstances. Pay attention to the ATM fees. If you transfer money to someone else’s account, consider making a transfer. There will be fees, but it will be faster and work internationally.
If you regularly do small deposits to others, you can opt for online portals and applications like PayPal. In this case, make sure to check the account numbers twice. If you send money to the wrong account, it can be difficult to recover money from it.