Looking to send someone money overseas or just next door from your bank account? Or maybe you’re on the receiving end? Let us take you through how you can safely and easily transact/transfer money from your bank account to different banks and different countries as well!
What Are Bank Transfers?
Bank transfer or wire transfer is an electronic payment method that allows people or entities to transfer funds among themselves around the globe.
The first wire transfer service was launched by Western Union in around 1972. It used telegraph networks to transfer funds and was commonly referred to as “telegraphic transfer”.
In some countries, this name still exists. A bank or wire transfer, whichever you prefer, can be made from one bank account to another. All you need is a unique reference number and details of the bank account where you can make your payment.
There are various methods in which you can transfer the funds i.e. by using the online banking package of the person receiving the money, telephone, or through the mail. Bank transfers are the best option for those who do not possess a credit card.
Bank transfer is also a very safe and secure payment method, as both account holders must have a proven identity so as to protect both.
To summarise everything, the bank transfer transactions process can be completed in three steps:
- First, you need to provide the bank with order details, “the amount of money you want to transfer” or the reference, “where the money needs to be sent.”
- Secondly, the consumer executes the bank transfer using the information provided by you and the bank.
- Finally, the bank will match, report and remit the funds to you. The funds you receive will be less than what has been sent to you because the receiving bank collects a fee on the money being transferred.
What Are The Benefits Of Bank Transfers?
Bank transfers are the most common and efficient method used in transferring funds. They are mostly used by cashless consumers to transfer their payments.
Their high level of efficiency and security has made them outstanding and popular around the globe.
Below, we shall look at what has made most individuals fall for the bank transfers;
- Bank transfers allow for the transmission of funds from individuals or entities to others while still maintaining the efficiencies associated with the fast and secure movement of money.
- The sender can initiate a wire transfer quickly and the recipient can access the funds immediately making the process customer-friendly.
- There are usually no bank holds on the money and the transactions are not subject to chargebacks.
- Bank transfers allow people around the globe to safely transfer money to locales and financial institutions and this is fully electronic.
Bank transfers have continued to grow around the globe as most people now use telebanking/ phone banking considering the fact that a bigger percentage of people have smartphones.
How Do I Transfer Money From One Bank To Another Online?
To transfer money from one bank to another especially for the external transfers where money is transferred between different bank accounts, we shall use the online banking website.
The following steps will guide you in how to transfer the funds;
- The first thing you need to do is to visit your bank’s website and link the two accounts. Log in to the bank that is sending money, and click on “Transfer Funds” tab, then the “External Transfers” or “External Accounts” tab and finally click on “Add an external account”.
- To add an external account, the receiving bank will have to verify with the sending bank to confirm the rightful owner of the account in the receiving bank.
- The sending bank will ask the account and routing number of the receiving bank whether it’s a saving or checking account. When using online, you may find the routing and account number in the “Account details” tab. But you need to enter a form of security code or pin in order to access this information within the app. You can also get the routing or account number of a bank account at the bottom of that bank’s check.
- You will then be required to verify the account in the receiving bank either by; providing the username and password of the receiving account and make it ready for external transfers or initiating one or two small deposits in the receiving bank from the sending bank where you will have to log in to the receiving bank account to see how much you deposited in it.
- Next you will have to verify the deposits that were made in the receiving bank. Log in to the sending bank account, in the “Verify your deposits section”, enter the amounts you transferred to the receiving bank and verify. This could take around 1-2 working days.
- Once you have verified, you can now start making transfers between the two banks without any worries.
Depending on your bank’s policies, however, there could be a limit on how much you can transfer at a time.
Most bank transfers that you need to make in everyday life, such as signing up for a direct deposit for your paycheck or using online bill pay, are types of electronic funds transfers (EFTs), where money is sent back and forth using electronic payment networks.
One of the most common types of transfers occurs on an electronic funds transfer network called the Automated Clearing House (ACH).
With an ACH payment, banks make payments on behalf of customers, verifying accounts and confirming amounts, moving money within 1-3 business days.
Read: How Do Banks Make Money
Different Ways You Can Transfer Money From One Bank Account To Another
If you need to transfer a more considerable amount of money, wire transfers can help you send money quickly and securely. Wire transfer refers to an electronic transfer via a network administered by transfer service agencies and banks around the globe.
The wire transfers often come with a fee as the senders pay for the transaction at the remitting bank. This fee varies from one bank to another or whether the transaction is domestic or international. Wire transfers or wire payments allow money to be moved quickly and securely without exchange of cash even if the sender and receiver are in different locations.
If you’re sending a wire transfer to another bank within the U.S., the funds might be available within one business day or even within a few hours but sending an international wire transfer may take more good time to process.
Wire transfers can’t be reversed once they are processed so you have to be careful when wiring money to someone.
The sender should approach a banking institution and provide the following information to the bank;
- The recipient’s name, address, phone number and other personal information to facilitate the transaction.
- The recipient’s banking information i.e. the account number, the bank’s name, the routing number or the “SWIFT code or IBAN code or BIC code” so that the bank knows where to send the money.
Before the transaction can be initiated, the sender must deposit some money to be sent and a transaction fee that is determined by the sending bank. The sending bank then transmits a message via a secure system like SWIFT to the recipient’s bank to clear the funds.
The recipient’s bank will be requested to execute the payment according to the instructions provided in the message they receive from the sending bank.
Funds may take some time, could be hours or days, to get to the recipient’s account from the time the sender initiated the transaction.
Transfers between Connected Accounts
In case you have multiple accounts within the same bank such as a checking account and a savings account and wanted to make money transfers between these accounts, it’s relatively easy and fast to set up the transfer.
We can call it an “internal transfer” of funds since it is between connected bank accounts. So, go to your bank’s online banking platform or mobile app and look for options on how to set up a funds transfer.
Usually, you will have to choose whether to set up a one-time transfer or a recurring transfer. Most banks will let you choose to transfer funds immediately or to set a future transfer on a particular date.
It is possible to transfer funds within the same business day as long as your two accounts are connected.
But in case you are connecting to a new account for the first time, it would take you 2-3 business days to complete the process.
There are various peer-to-peer payment apps available now; they include; Venmo, PayPal, CashApp, among others, and this helps to move money back and forth between people in peer-to-peer transfers.
These apps are a quicker way of sending money to friends, families or make payments to small businesses, and they usually do not come with a fee or in case of a fee, it is low and you cannot feel its pinch as it equals a small percentage of the total transaction amount.
Before using these apps to transfer money, you should first get to learn about their transfer charge fees, timing ad their limits.
For example, Zelle has a transaction limit of $500 per week, Venmo, “$4,999 or less per week” among others. Some payment apps do not support international transactions while others would charge you a larger transaction fee in case you want to send money to someone in another country.
It is simple to set up a peer-to-peer payment account using any platform of your choice. You need to sign up for an account and then link your bank account or credit or debit card to it.
In case you are required to provide extra information perhaps for security purposes such as information and passwords, you should fill it in to increase your account security.
Once your account has been set up you will be able to send money a couple of clicks away after you get set up. The time it takes for money to transfer varies depending on which peer-to-peer payment service you use.
This could range anywhere from a few seconds to three business days. The money will be stored in the P2P payment app as long as it is not yet manually released to your personal banking account.
Writing Paper Checks
Another simple and feasible alternative to transfer funds is an outdated or low-tech, classic option, “writing a check”. When you write a check, you are authorizing your bank to transfer funds to the recipient or to one of your other bank accounts.
The introduction of mobile check deposits has simplified life in the banking sector where you can often write and deposit a check from the comfort of your home using mobile banking apps.
If you want to transfer the money instantly, I do not think checks will be the right option for you. Because these take a few business days before the transfer process is complete.
At a certain point in time, you may be required to write a check so you need to go through these details below.
We have broken the check into different parts and explained the purpose of each;
- Your information: this is in the upper left corner of your check that requires you to fill in your name and address that you have on file with the bank.
- The Check number: this is located at the upper and lower corners of the check. It is helpful in case your check book is stolen or in case of fraudulent withdrawal. A Check number can help in tracking.
- The Date: you should put the date of transaction on the date line.
- Recipient’s name: there is a top long line in the middle of the check usually preceded with “pay to the order of”. It is where you can write the recipient’s name, “this can be a person or organisation”.
- The Payment amount: there are two spots on the check where you are required to write the payment amount. The first spot requires you to write the payment amount numerically and the other wants you to write it in words. So that the bank can clarify it either way for simplicity and efficiency.
- The Memo line: it is located in the bottom left corner of the check. Though it is optional, we recommend that you should not leave it out. It helps to know more about the payment made and in keeping finance records.
- Bank name: here you will find the bank logo and address.
- The routing and account number. These are strings of numbers located at the bottom of the check and they are essential when you are setting up direct deposits or ordering the checks.
- Signature: there is a blank line at the bottom right corner where you must sign. This indicates that you have given authority to withdraw funds from your account.
Are Bank Transfers Secure?
To make a bank or wire transfer, each account holder must prove their identity and confirm ownership of the account. Chargebacks are unlikely, although wires can be recalled.
Information contained in wires is transmitted securely through end-to-end encryption communication methods.
The price of bank wire transfers varies greatly, depending on which bank you transfer the funds to and its location; some countries could charge a larger fee for the transaction of funds.
Wire transfers that are mainly done through cash offices are designed for transfer between persons who trust each other. It is unsafe to send money by wire to an unknown person, “could be a fraud” to collect at a cash office.
The receiver of the money may not provide whatever goods or services they promised in return for the payment after they have collected their payments but instead just disappear. So you need to be trusting the person before you can send them the money.
This is among the common scams often nominate in the Western Union.
What Risks Do I Face Using Bank Transfers?
Generally speaking, the wire transfers are generally safe and secure as long you know the person who is receiving them.
Here, you are required to prove their identity so that anonymous transfers are impossible, we shall consider that legitimate.
Since these international wire transfers that are of the United States’ origin are monitored by the “Office of Foreign Assets Control”, which is an agency of the U.S. Treasury.
The agency ensures security in money transfers especially when the money is sent overseas, they put all the effort to make sure that the money does not fall into evil hands like; funding terrorist attacks and money laundering.
The agency also has the authority to prevent money from going to countries that do not obey the U.S. government sanctions.
In case of any of the above scenarios, the sending bank will freeze the funds and stop the wire transfer immediately.
Yes, bank transfers can be that easy. We hope that this article helped you gain a better understanding of bank transfers. By now you should be able to make the right choice for whichever method you should use when transferring your funds. Feel free to leave a comment below.
Frequently Asked Questions
No, online banking for most if not all banks today.
Less than 24 hours
3 days on average
- Wikipedia: https://en.m.wikipedia.org/
- Bankrate: https://www.bankrate.com/
- World remit: https://www.worldremit.com/