Business Banking

How to transfer money from one bank to another

Many people have multiple accounts at different institutions either for personal or business purposes. Check out our guide on how to transfer money from one bank to another to save yourself some time

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It’s not uncommon to have two or more bank accounts spread across different financial institutions. For example, you can have a checking account at one bank that offers affordable fees, and a savings account at another bank that provides a high annual percentage yield (APY). In which case, you may need to determine the best way to transfer funds from one account to the other.

This article gives a step-by-step guide on how to transfer money from bank to bank. While online banking is the go-to option for many, it’s not the only way to transfer money between accounts held in different banks or credit unions. You can also use wire transfers, third-party platforms, email money transfer or even checks.

Key takeaways

  • Online transfer offers the easiest way to move money between accounts that you hold in different banks.
  • To successfully transfer funds between your two accounts, you’ll need to link them first.
  • You can transfer money from your account to someone else’s account using wire transfer, third-party money transfer platforms, and email/phone number services like Zelle.
  • Peer-to-peer payments and online bill payment round off the most common methods of transferring money from one bank to another.

Can I transfer money from bank to bank?

Yes, you can transfer money from an account held at one bank to an account held at another bank. This is usually made possible by online transfers.

Also known as electronic funds transfer (EFT), online transfer refers to the process of moving money from one account to another without any direct intervention of a bank staff. It’s not only used to move money within a single financial institution, but you can also use it when moving cash between different banks and credit unions.

Online transfer works more or less as an automated clearing house (ACH) payment. With your authorization, money is automatically pulled from one bank account and deposited in another. But you’ll need to prove that you own both accounts. You will also need to link those two accounts. You can usually do this using the institution’s online banking platform, although some may require that you visit a branch or make a call.

Whatever the case, linking two bank accounts requires that you have their account numbers, proof of ownership of both accounts, as well as their routing numbers. Once you link the accounts, you can easily transfer funds between them.

While many banks and credit unions allow free bank-to-bank transfers, some charge transfer fees. The process generally takes up to three business days to complete. Therefore, make sure to check with your institution so that you know what to expect as you look to transfer money from one bank to another.

How to transfer money from one bank to another

To move money between different banks, you’ll first need to link the two accounts that you have at those banks. One of those accounts will be the sender while the other will be the recipient. Here’s a step-by-step procedure on how to do bank transfer:

  1. Link the two bank accounts

Set up a relationship between the account that you need to draw money from and the one that will receive the cash transfer. You can usually do this using your institution’s online banking platform.

Log into the first bank’s app or website and look for the available options for making transfers. Keep in mind that the mobile app or website layout will vary between different banks. But each will almost certainly have options for transfers.

Look for the external transfer option. This will allow you to move money between two accounts held at different banks. It differs from internal transfer in that the latter lets you transfer funds between accounts held in a single financial institution. This is often necessary when managing personal finance.

For example, you may want to move cash from a checking account to a savings account that you hold within the same bank. Internal transfer will come in handy in such a case. But when moving funds to a different bank, then choose external transfer.

  1. Provide account information of the external account

To successfully transfer money between two banks, you’ll need to have the account number of the receiving account. Besides that, you’ll require the second bank’s routing number. Also known as a routing transit number (RTN), a routing number is a nine-digit code that financial institutions use to identify other financial institutions.

Combined with the account number, a bank’s routing number allows you to identify your individual account. You can always find your bank’s routing number on its website, mobile app or printed paper checks.

  1. Confirm account linkage

The first bank will typically require you to verify that you own the second bank’s account. On its online banking platform or mobile app, it may ask you to enter your second account’s username and password.

Alternatively, the first bank may require that you make a small direct deposit and confirm the amounts. This process typically takes a few business days to complete.

  1. Set up cash transfers

Once the above steps are complete, you can start moving funds between the two linked accounts via your bank’s app or website. You’ll typically need to specify the sending and receiving accounts, as well as the amount and date of transaction.

One good thing about linking accounts is that you can set one-time as well as recurring transfers. The latter option is usually ideal when you want to set up automatic cash transfers from one account to the other. This can happen weekly, monthly or at whatever interval you choose. It’s a handy feature for bank users, especially those who need to move cash from a checking account to a savings account.

As already mentioned, some banks usually charge transfer fees when you move money from one account to another. Besides, your bank may have minimum balance requirements. If a cash transfer results in your account balance dropping below the threshold, the bank may charge you a fee.

Generally speaking, you can make as many cash transfers as you wish when the money is moving from a checking account into a savings account. However, most banks have restrictions on the number of withdrawals you can make from a savings account. This is typically a maximum of six transactions a month.

The implication is that you can’t set up more than six transfers when the money is moving from a savings account to a different type of bank account. Otherwise, exceeding this limit may attract charges and penalties. These are all considerations you’ll want to know before completing a bank-to-bank cash transfer.

Can I transfer money to someone else’s bank account?

One of the FAQs about bank transfers is: how can I transfer money from my bank account to someone else’s? If you need to move the money quickly, then a wire transfer is probably your best bet. But it’s not your only option. Others include third-party platforms, email money transfer and checks.

Here’s a lowdown on how to transfer money using each alternative:

Wire transfer

A wire transfer is a method of moving money from one account to another electronically across a network of banks, credit unions and other financial institutions (like Western Union). Some examples of wire transfer networks include the Federal Reserve Wire Network, SWIFT, and the Clearing House Interbank Payments System.

If you’re doing a wire transfer to a U.S. bank, you’ll need the recipient’s name, account number, and routing number. Some banks will also ask for the recipient’s address. Others only allow wire transfers to be done in person at a local branch. In the case of international transfers, you may also need a SWIFT code and/or the IBAN number of the receiving bank.

Whatever the case, wire transfer is generally a fast way to move money. The recipient typically receives the funds within one business day. However, it’s also a costly way to transfer money. The fees generally range from $10 to $40, but oftentimes they are closer to $40 than $10.

Third-party money transfer

If you don’t mind using a third-party platform to send money to someone else, then companies like PayPal, MoneyGram and Western Union offer viable options to consider. All three offer a platform that links to your bank account, from where you can send money directly to someone else’s bank account.

PayPal is especially popular because it’s the biggest processing system in the world. Plus, you can send funds for free as long as both you and the recipient are within the U.S. Many other platforms charge a fee. For example, MoneyGram fees start from $1.99 for every transaction that doesn’t use a debit card or credit card.

It’s worth mentioning that virtually all third-party platforms charge higher fees for international transactions. You may also incur an exchange rate on every cash transfer that you make in a foreign currency. Depending on the amount, this rate can make the transaction quite costly.

Email and mobile money transfer

Some U.S. banks offer platforms that allow you to move money with a phone number or email address. One such platform is Zelle. As a digital payments network, Zelle lets you send money right from your bank’s mobile app to another bank account. The process is free and typically takes a few minutes to complete. All you need to transfer money with Zelle is the recipient’s mobile number or email address.

While you can receive an unlimited amount of money on Zelle, the amount you can send depends on your bank’s limits. Chase, for example, caps Zelle transfers at $2,000 per transaction. The maximum you can send per day is $2,000 while the maximum you can send in a calendar month is $16,000. Chase has no limit on how much you can receive.

Write a check

15% of all non-cash payments in the U.S. are done with checks1. It may be a traditional method of money transfer, but writing a check is an option nonetheless. In fact, quite a good number of banks offer the first order of checks for free.

For example, Bank of America gives its customers 10 free starter checks when they open a checking account. And if you hold an Advantage Relationship or Preferred Rewards account, then you can order free Bank of America checks for as long as you keep your account open.

One good thing about using a check to transfer cash from your account to someone else’s is that it’s simple. Checks are pretty intuitive in that sections are labeled. You’ll know exactly where to write the date, the recipient’s account number, amount and signature. There are no navigation panels as is the case with mobile banking apps and websites.

Besides, banks typically allow people to deposit or cash checks for others. This may come in handy if you’re trying to transfer money to someone who doesn’t have a bank account. It means that their friends and family can cash in the check for them.

More options for sending money

In case none of the aforementioned ways of sending money works for you, then you still have other options to consider. These are primarily ideal for moving money from your account to someone else’s.

  • Peer-to-peer payments: like Zelle, peer-to-peer platforms allow you to link your debit card, credit card and/or prepaid card from any U.S. bank to the platform. Once linked, you can use the P2P platform to transfer money from your account to someone else’s. Some examples of peer-to-peer payment platforms include Popmoney, Google Pay, Venmo, Apple Pay and Samsung Pay Cash. All of them either use a phone number or email to complete transactions.
  • Online bill payment: this method of cash transfer is mostly ideal for paying bills. It, therefore, makes a good choice for transfers where bills are involved – like paying for utilities. Offered by banks and credit unions, online bill payment is usually tied to your checking account from where funds are electronically drawn for payment of one-time or recurring transfers.
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