Images by GettyImages; Illustration by Bankrate
Key takeaways
- Wire transfers, third-party apps and checks are all valid ways to transfer money from one bank to another.
- Each method has its own speed, cost and limits for transfers.
- Some options can transfer funds within minutes, though you may have to pay a fee for such instant transfers.
The ability to transfer funds between accounts at different banks is a useful way to help you get money where it needs to be, and there’s more than one way to do it.
Transfer costs and speed are important considerations when choosing the best transfer method, and the two are often linked. Getting money where it needs to go in the quickest way can also be the most expensive method.
What are bank-to-bank transfers?
A bank-to-bank transfer, also known as an external transfer, is the process of getting funds from an account at Bank A to another at Bank B. You can typically make a bank-to-bank transfer through your bank’s website or mobile app, as well as by calling the bank or going to a branch.
What you need to know about your recipient before sending money
You’ll likely be required to input the recipient’s bank routing number and account number, at the very least. For some services, like Zelle, you will only need the person’s phone number or email address. Before clicking send on a transfer, double and triple-check the recipient’s information (even if that recipient is you).
Things to consider before transferring money
When choosing a method to send money to another person, consider these factors:
- Speed: Determine how quickly the money needs to arrive at the other bank.
- Fees: Sometimes a wire transfer might be needed for sending large amounts of money quickly, but it likely won’t be free. Other methods, such as Zelle, can be both fast and free.
- Limits: Even though federal restrictions on savings withdrawals have been lifted, your bank may restrict the number of transactions in these accounts, and exceeding your bank’s withdrawal limits could result in a fee. Also, be aware that banks have limits on how much you can transfer at one time. For example, for a next-day ACH transfer, Bank of America limits you to $1,000 per transfer.
After deciding on speed, cost and what sending options you have, you’re ready to make a money transfer. Here are four ways to transfer money from your bank to another institution.
1. Wire transfers
A wire transfer is one of the fastest ways to transfer money electronically from one person to another through a bank or a nonbank provider such as Wise (formerly TransferWise).
For a domestic wire transfer, you’ll need the routing number, account number, the name of the recipient and possibly the recipient’s address. The transfer can be set up online or at a branch or office.
Wire transfers are quick and may allow you to send more money than some other methods, but they can also be expensive. Domestic wire transfer fees average $26. Keep in mind your bank might have a weekday deadline for wire transfers, and they can’t be sent on weekends or bank holidays.
2. ACH transfers
Then there are Automated Clearing House (ACH) transfers, which is the system financial institutions use to make electronic transfers. You can make an ACH transfer to another bank if you have the recipient’s information, such as the recipient’s account and bank routing number.
Unlike wire transfers, ACH transfers are typically free.
3. Third-party companies and mobile apps
Banks aren’t the only option for sending money. PayPal, MoneyGram, Zelle, Venmo, and other third-party companies are also considerations. Transfers can take seconds or a few days, depending on the method selected.
Your bank’s app or online portal might offer a service, such as Zelle, that allows you to send money electronically to someone else using their email address or cell phone number.
With many third-party apps such as PayPal or Cash app, the initial transfer you make simply goes into the receiver’s app account. The receiver then must transfer money out of the app account and into their bank account, which may take a few days for a standard transfer, which is typically free. Additional charges may apply for instant transfers.
For example, with PayPal, customers don’t incur a fee when moving money from PayPal to their bank accounts at the standard pace. But if you choose an instant transfer, you pay a fee of 1.75% of the amount transferred.
4. Write a check
A traditional way of transferring money between banks is by writing a check and depositing it either at a bank branch, online, through a mobile app or by mail. You can also use a money order, though some bank websites and/or apps lack the ability to deposit a money order.
Funds can also be transferred using an official check, also known as a cashier’s check, and deposited the same way a standard check is. A fee may apply for the purchase of an official check or money order.
What are the benefits of external bank transfers?
External bank transfers allow you to transfer funds between banks or send funds to another person without having to visit a branch or ATM.
An external transfer can be useful for moving funds, for example, from a high-yield savings account held at an online-only institution to a checking account at a brick-and-mortar bank. Having a checking account at a brick-and-mortar bank provides access to a branch — an important consideration for some consumers — while an online bank allows them to earn higher yields on savings that a traditional big bank may not offer.
Transferring your money to yourself at a different bank
Many consumers have accounts at more than one bank and sometimes need to transfer money between them.
Some options for doing this include setting up an external ACH transfer from one of your accounts to another or using a service such as Zelle. Some lower-tech options are writing a check to yourself or withdrawing cash from one bank and depositing it into another.
Bottom line
An external transfer is a quick and easy way to move funds from one account to another. It’s important to research transfer options to know how much they cost and how long it can take for the funds to get where they need to be.
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