If you need to transfer money from one bank to another, options abound. Though it seems like a straightforward process, it can get a little confusing with all the different methods, timelines and fees you could incur moving money back and forth between accounts. There are so many choices on how to get this done, that you may wonder what is the easiest, quickest and least expensive route to take.
The best way to transfer money from one bank to another is really relative to your needs at the moment. You may need to transfer money quickly and are willing to jump through a few hoops to get it done. Alternatively, you may prefer an easy way to do it that could take a few days or incur a fee.
The following are a few ways to transfer money from one bank to another. Depending on what you need at the time, choose the method that works for that circumstance.
Using wire transfer is very common to transfer money from one bank account to another. A quicker and electronic way to send money, most people will use this method for transferring large sums of money.
Wire transfers can be sent to both domestic (here in the U.S.) and international bank accounts. Domestic wire transfers can be processed immediately or can take anywhere from one to three days to show up in the recipient’s bank account. This timeline will depend on when you initiate the transfer, as many banks have cutoff times that control money being sent out the same day or the next day.
The downside of wire transfer is that it can be costly to send and receive a wire transfer. Fees can range from $10-$85, with international transfers being the most expensive.
Another option to move money between bank accounts is to use your bank app on your phone or web. In most accounts, you can set up an “external account” where you can enter account information about the bank account where you’ll transfer money.
In order to set up this external account and make transfers, you’ll need to enter information about the depositor bank, such as bank name, bank routing number and your personal account number. Then, you must indicate the type of account you’ll transfer money to. The most common account types are savings or checking, but there could be other options to choose from, like money market or brokerage.
In order for these external transfers to work, both banking institutions must support automated clearing house (ACH) transactions. This is a type of electronic transfer method most banks in the U.S. support.
A final step to setting up the external account is verifying 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 on one day, it could take two to five days to show up in the receiving account.
ACH transfers are usually free, but there some banks that charge 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 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.
Writing a check
You can write a check to transfer money from one account to another. It is both simple and free to do.
In order to transfer money from one bank to another using this approach, you’ll have to write a check (from the bank you are moving money from,) to yourself. Then, you can either walk the check to the bank to deposit it or send it via mail with a deposit slip, to the bank where you need the money.
The disadvantage of this approach means 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 be current until the check actually clears the bank.
If you’re not careful in keeping a record of the check that will reduce the balance on the account from which it’s drawn, 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.
Money order or cashier’s check
These methods are very similar to the process of writing a check. If you’re like most people who’ve abandoned writing checks altogether, you may not have access them. If this is the 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 account and deposit it. 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 aware, right away, that your balance is reduced.
The downfall of this approach is that the bank may charge a fee for creating these checks for you 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.
Venmo is a peer-to-peer payment app that calls itself a “digital wallet.” This app 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 for sending funds to other users or keep funds in your “Venmo” account. This money stays in your account and can be transferred to other people or 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 will get the money in your bank account in one to three business days.
Instant transfers are only available to a small amount of users at the moment and cost 25 cents each. With instant transfer, your money can be transferred to an eligible MasterCard or Visa debit card within 30 minutes.
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 where you can maintain a balance good for making transactions with anyone who accepts PayPal payments. However, if you need more flexibility in 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 from either your PayPal balance or your bank account, there is no fee. Also, your friends and family don’t even need a PayPal account to send money to you. According to the PayPal website, “Anyone with an email or mobile phone number can receive a payment request, whether they have a PayPal account or not. They can pay you with a credit card, cash, or even a check.”
It usually takes three to five business days to transfer money to or from a U.S. bank account with PayPal. The cutoff time of 7 p.m. EST each day determines when your transfer will appear in your bank account.
You can also send money from your PayPal account to an eligible debit or prepaid card within 30 minutes for a 25-cent fee. Finally, you can receive a check from your PayPal funds within one to two weeks for a $1.50 fee.
Another player in the peer-to-peer payment space, operates a little differently from Venmo and PayPal. You don’t link a bank account to Cash app, but you can connect 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. You can initiate these transfers on a one-off basis or set the default to automatically send Cash App payments to your debit card (auto cash out.)
There is no fee to send or receive money using Cash App for standard transfer times, which takes one to three business days. Instant transfers will cost 1% of the transfer amount and appear in your bank account immediately.
Cash App has limitations on amounts of money you can move in a given time period. If you send more than $250 in a week, you will have to verify your account with personal information: name, date of birth and the last 4 digits of your Social Security number. Providing this information will increase the sending limit to $2,500.
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 banking app to 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 here, the money is available immediately in recipients’ bank accounts. (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 about sending and receiving limits. These rules could also vary with the type of bank account you have or other individual circumstances the bank considers when setting limits.
Apple recently added cash payment services to Apple Pay 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. It can stay there or be transferred to a bank account.
It’s free to send and receive money using a debit card to fund the transaction. If you use a credit card, to send money, there’s a 3% fee.
There are limits to Apple Pay Cash. You’ll be asked to verify your identity if your in-app balance exceeds $20,000. The service has other limits when transferring money to your bank:
- You can transfer a minimum of $1 to your bank, or your full balance if it's under $1.
- You can transfer up to $3,000 to your bank in a single transfer.
- Within a seven-day period, you can transfer up to $20,000 to your bank.
The Best Transfer Method
As mentioned above, the best way to transfer money from one account to another will depend on the circumstance. 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.