Note: This article is part of our Basic Banking series, designed to provide new savers with the key skills to save smarter.
If you need to transfer money from one bank to another, options abound. Though it may seem like a straightforward process, it can get a little confusing with all of the different methods, timelines and fees from moving money back and forth between bank accounts.
There are so many choices for how to get this done that you may wonder which is the easiest, quickest and least expensive route to take. This guide will lay out the pros and cons of each option so you can determine which best meets your particular needs.
How to transfer money between banks
The best way to transfer money from one bank to another really depends on your needs at the moment. You may need to transfer money quickly and be willing to jump through a few hoops to get it done. Alternatively, you may be fine waiting a few days.
You may also feel more comfortable with one method of transferring money over another. For example, some people prefer to do everything via their smartphone, while others may prefer a more old-fashioned approach, such as moving money via a check or money order.
Depending on what you need at the time, you can choose from the following methods that work for your circumstance.
Transfer money with a wire transfer
People often use a wire transfer, which is quick and electronic, to transfer large sums of money.
Wire transfers can be sent to both domestic and international bank accounts. Domestic wire transfers (meaning those to bank accounts in the U.S.) can be processed immediately or can take anywhere from one to two business days to show up in the recipient’s bank account. The timeline will depend on when you initiate the transfer, as many banks have cutoff times that determine whether the money will be sent out the same day or the next day.
The downside of a wire transfer is that it can be costly to send and receive one. Fees can range from $10-$65, with international transfers being the most expensive.
If you want to initiate a domestic wire transfer, you may need to know:
- The routing number of the bank you’re sending the money to
- The name, address and phone number of the bank that will be receiving the funds
- The bank account number of the recipient of the money
- The name and address of the recipient of the funds
If you are sending an international wire transfer, you’ll also need:
- The recipient bank’s SWIFT code (a designation that identifies members of a global network of financial institutions), if applicable
- The International Bank Account Number (IBAN)
Transfer money with a bank app
Another option to move money between bank accounts at different financial institutions is to use your bank app on your phone or online. In most accounts, you can set up an “external account” where you can enter account information for the bank account to which you’ll transfer money.
In order for these external transfers to work, both banking institutions must support automated clearing house (ACH) transactions. However, this is a type of electronic transfer method most banks in the U.S. support.
There are a number of steps you must take to set up this external account and make transfers:
- First, you’ll need to enter information about the depositor bank. This includes the bank’s name and routing number, as well as your personal account number.
- Then, you must indicate the type of account that will receive the funds. The most common account types are checking or savings accounts, but there could be other options to choose from, like money market or brokerage accounts.
- Next, you’ll need to verify that you are the owner of the receiving account. Some banks will allow you to verify the account immediately by prompting you to log into the recipient account while you’re logged into the sending account. For banks that don’t offer immediate verification, you will receive small test deposits in the receiving account and later verify the amounts with the bank where you’re setting up the external account access.
- Once verification is done, you can transfer money between these accounts. Though the transaction may be initiated within one day, it could take two to five days to show up in the receiving account.
ACH transfers are usually free, but there are some banks that charge fees, which can range from $3 to $10, for outgoing and incoming ACH transfers. Some banks will expedite the transfer for a higher fee.
It’s also worth mentioning that most banks limit certain transfers to six per month for savings accounts. When you exceed that limit, you could be charged an additional fee per excessive transaction.
Transfer money by writing a check
You can write a check to transfer money from one account to another. It is both simple and free to do.
To transfer money from one bank to another using this approach, you’ll have to write a check to yourself from the bank from which you are moving money. Then, you can either go to the bank to deposit the check or mail it with a deposit slip to the bank where you want to transfer the money. Many banks also let you deposit a check via your mobile app. Simply open the app, take a picture of the front and back of your check and the check will be deposited.
The disadvantage of transferring money by writing a check is that you may have to wait a few days for the check to clear in both accounts. If you are used to checking your account for an updated balance, it may not become current until the check actually clears the bank.
If you’re not careful to keep a record of the check that will reduce the balance on the account from which it’s withdrawn, you could inadvertently overdraw your account. Overdrafts can be very costly, so just make a note of the amount of the check and your new balance.
Transfer money using a money order or cashier’s check
These methods are very similar to the process of writing a check. However, if you’re like most people who have abandoned writing checks altogether, you may not have access to them. In this case, you can request the bank create a “check” for you in the form of a money order or cashier’s check.
Once you receive the check, you can take it (or mail it with a deposit slip) to the bank and deposit it. While it could take a few days to post to the depositing account, the benefit of this approach is that the bank will take the money out of your account immediately. This way, you are immediately aware that your balance is reduced.
The downfall of this approach is that the bank may charge a fee of as much as $10, and it could take time for the receiving account to post funds. Some accounts offer benefits that cover the fee, while other types of accounts do not.
Use P2P payment apps to transfer money
Peer-to-peer payment apps have transformed the way we send and receive money. Now there’s no need to wait for your co-workers to get to an ATM to give you their contribution to a baby shower gift for another colleague; they can simply send you the money via a P2P payment app.
You can also use these apps to transfer money from one of your bank accounts to another. Here are some popular P2P payment apps to do it.
How to transfer money with Venmo
Venmo is a peer-to-peer payment app that works on a mobile device like a phone or tablet, and allows you to transfer money from one account to another. The most common use is for sending money between friends and family.
With Venmo, you can connect your bank account, debit or credit card information to the app to send funds to other users or keep funds in your Venmo account. Any money you receive through the app stays in your Venmo account and can be transferred to other people or to your bank account at your request.
Right now, Venmo supports two transfer types: standard and instant. Standard transfers use the ACH network and carry no charges. If the transfer is initiated before 7 p.m. EST and there are no processing delays, you typically will get the money in your bank account in one to three business days.
Instant transfers are only available to users with eligible bank accounts or certain Visa and Mastercard debit cards. According to Venmo, the best way to find out if your account or debit card is eligible is to add it to your Venmo account. If it is eligible, you’ll be given the option to initiate an instant transfer, which costs 1% of the transaction, with a minimum fee of $0.25 per transaction and a maximum fee of $10. With instant transfer, your money can be transferred to an eligible bank account or debit card within 30 minutes.
How to transfer money with PayPal
PayPal is another peer-to-peer payment app that works on a mobile device or internet browser. To open a PayPal account, you’ll need to provide your first and last name, address, email address and phone number.
Like Venmo, you can send or receive funds within the app and maintain a balance that you can then use for transactions with anyone who accepts PayPal payments. However, if you need more flexibility in your spending, you can connect your bank account to your PayPal account and transfer money to your bank account.
When you send money to friends and family members from either your PayPal balance or your bank account, there is no fee. In order to send or receive money, you must have an account, so if your family members want to send you cash via PayPal they must create their own account first.
It usually takes three to five business days to transfer money to or from a U.S. bank account with PayPal. How quickly your transfer appears in your bank account will depend on whether you make the transfer before or after the cutoff time of 7 p.m. EST.
You can also send money from your PayPal account to an eligible debit or prepaid card within 30 minutes for a fee based on the amount of money you transfer. Finally, you can receive a check from your PayPal funds within one to two weeks (if you’re within the U.S.) for a fee of $1.50.
How to transfer money with Cash App
Another player in the peer-to-peer payment space is Cash App, which lets you connect your bank account or a debit card that is linked to your bank account. Cash App also acts as a digital wallet by holding money in the app until you transfer it to your debit card or bank account.
There is no fee to send or receive money using Cash App within standard transfer times, which are typically one to three business days. Instant transfers carry a fee 1.50% of the transfer amount (with a minimum fee of $0.25), and the funds will appear in your bank account immediately.
Cash App limits the amount of money you can move in a given time period. If you send up to $250 in a week or receive up to $1,000 within 30 days, you will have to verify your account with personal information, such as your name, date of birth and the last four digits of your Social Security number. Providing this information will increase the sending limit.
How to transfer money with Zelle
Zelle, formerly known as clearXchange, is a digital payment network with an app component supported by a growing number of major U.S. banks. Zelle’s service can be offered within your bank’s app to easily send money back and forth between accounts. If your bank doesn’t yet support Zelle, you can download the app and set up an account directly with Zelle.
Sending money only requires a recipient to have a phone number or email address. Zelle doesn’t charge for its money transfer services, and unlike any other money transfer method listed here, the money is available immediately in recipients’ bank accounts as long as they are enrolled in Zelle. If they aren’t enrolled in Zelle, they will receive a notice that tells them how to enroll. (Note: For people who are creating a new Zelle account, first-time transfers may take one to three days to post.)
Participating banks have different rules for sending and receiving limits. These rules could also vary depending on the type of bank account you have or other individual circumstances the bank considers when setting limits.
How to transfer money with Apple Pay
Apple recently added cash payment services to Apple Pay’s capabilities. Apple’s peer-to-peer payment service, Apple Pay Cash, works much like the other apps mentioned here. Money received is added to the Apple Cash card that lives in the Wallet app. Funds can stay in the account, or you can transfer them to your bank account.
While there are no fees to transfer money from Apple Cash to your bank account, you’ll be charged a 1% fee if you transfer funds to an eligible Visa debit card, which is the transfer method you’ll use if you want to make an instant transfer.
There are limits to Apple Pay Cash, and you may be asked to verify your identity when using it. For example, if you add or receive $500 or more in total, you will have to provide information like your full name, Social Security number, date of birth, home address and an image of your driver’s license. The most you can have in your Apple Cash account is $20,000 — and that’s only if you have verified your identity.
Additionally, the service has other limits when transferring money to your bank, including:
- You can transfer a minimum of $1 to your bank, or your full balance if it's under $1.
- You can transfer up to $10,000 to your bank account or debit card in a single transfer.
- Within a 7-day period, you can transfer up to $20,000 to your bank account or debit card.
The best transfer method
As mentioned above, the best way to transfer money from one account to another will depend on the circumstances. In many cases, you may have to choose between convenience, speed and cost-effectiveness when transferring your money. As long as you know your tolerance for these trade-offs, you should be able to choose the best method for your needs.