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How to transfer money between banks: popular transfer methods, explained
If you don't know how to transfer money between banks, you may have to jump through several hoops—or, with our help, you may not.
28. Oktober 2020 — 10 min read
Your money may be spread across several accounts at different banks, but what if you need to move the money from one account to another?
Or when it comes to paying off your debts, paying bills and rent, or just sending money overseas to your friend’s bank account, how do you go about it?
You can’t just call up your bank out of the blue and ask them to transfer the cash right away, without giving them any info (the idea!).
If you don't know how to transfer money between banks, you may have to jump through several hoops - or you may not, with our help.
We want to help you know all about how to transfer money from bank to bank, so we’ve spelled out some of the popular bank transfer methods below, as well as how much they’ll cost you, how long it will take, and how easy the process will be for you and your recipient.
Why does it take long to transfer money between banks?
The speed of money transfer between banks depends on many factors, like the bank you’re using to move the money, the amount of money you’re sending, the transfer method you’re using, and whether you’re making domestic transfers or international ones. Like, if you want to send large amounts of money to another bank, it takes longer than usual.
For example, in the case of ACH transfers, banks can’t process high-value transactions above $250,000 USD on the same day. Banks usually process ACH transactions in batches, which is why these take at least 2 business days to clear. Also, they don’t make instant transfers because they ensure that your bank account has the required amount of money, before moving it to another account.
Ready to learn about the different methods that are available to you? Here are some of the most popular ways to send money from bank to bank.
Money transfer sites and apps (example: Xe.com!)
Availability: Depends on the site or app. The Xe site and app is available in 130+ countries around the world.
Fee: Differs from app to app, but typically lower than that charged by banks.
Processing time: Instantly, or in maximum 4-5 business days.
Thanks to innovative technology, money transfer sites and apps offer a much more comfortable and cheaper way of moving money between banks.
With these services, you can pay your bills, send money to your friends, or move your money to another bank account of yours in just a few steps.
Simply link your bank account to your money transfer account, fill in the necessary details (more on that below), and you’re good to go!
Online banking portal
Availability: Several countries, including the US, Canada, Japan, France, India, Ukraine, Australia, Brazil, and the UK.
Fee: Varies based on the bank.
Processing time: Usually 1-2 business days, but differs from one bank to another.
Online banking or web banking lets you transfer money between banks via the Internet, without you having to visit or call your bank.
For this purpose, you have to register for your bank’s online banking service, and to access this service, you’ll need a device and a reliable Internet connection.
Most importantly, you can use online banking to transfer money while you’re at home, at work, or on the go. Here’s how you do it, if you wish to move money between two bank accounts which belong to you:
Provide the necessary information about the 2nd bank account.
Verify that you can access the 2nd bank account. For this process, the 1st bank may ask for your username and password, or may deposit a small amount into the 2nd bank account. Once you confirm you’ve received the deposits, the verification process will be complete.
You’re done! Start moving money from the 1st bank account to the 2nd one by setting up one-time or recurring transfers.
Checks
Availability: Global.
Processing time: 2-5 business days, or even longer.
You may already know how to send money to another bank account by check, so we’ll just touch on this subject.
When you issue someone a check, that person (the recipient or payee) deposits the check in his or her bank account for encashing it. Once the bank clears the check, they’ll credit the money to the recipient’s bank account.
Real-Time Gross Settlement (RTGS)
Availability: Global.
Fee: Depends on your country and the bank.
Processing time: Within minutes or the same day on which you initiate the transfer.
If you’re looking for a lightning-fast way to transfer money from one bank to another in large amounts, then RTGS is your thing.
Under this process, banks handle and settle individual transactions, instead of conducting multiple transactions in groups or batches. This means that once your bank initiates an RTGS transaction, the recipient’s bank settles that transaction immediately.
But this will be possible only when you send the required information to your bank within the time they’ve specified. Check out some of the RTGS systems and their charges in a few countries:
Processing House Automated Payment System (CHAPS)
Country: The UK
Fee: Anything between £25 GBP and £30 GBP.
Fedwire
Country: The US
Fee: Free or $30 USD-$40 USD
RTGS
Country: India
Fee: Free for savings account holders; 5 INR-50 INR (plus GST) for other account holders, though the charges vary from bank to bank.
Wire transfer
Availability: Global.
Fee: $15 USD-$50 USD per transfer, depending on your bank.
Processing time: 1-5 business days.
Do you know how to transfer money from one bank to another across different countries? The answer is: make a wire transfer.
A wire transfer or bank wire is an electronic transfer of money between banks, typically using the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system.
Some wire transfers are international, while others are domestic (for example, transferring money from one bank to another, with both banks being situated in the US).
While wire transfers are a quick and reliable method of transferring money between banks, they are however one of the more costly methods, often charging multiple fees throughout the process.
Standing orders
Availability: Several countries, including Japan, Germany, Spain, the UK, and Russia.
Processing time: At least 3 business days.
For making recurring payments of a fixed amount, like rent, mortgage, or insurance premiums, you can use standing orders to send money to another bank account.
To set up the process, you have to contact your bank, over the phone or online, and complete a standing order form.
Your bank will automatically deduct the fixed amount of money from your account on a date you’ve previously agreed upon, and will transfer the money to the recipient’s bank account. They’ll repeat the same process at regular intervals, until you cancel the standing order.
Single Euro Payments Area (SEPA) Credit Transfer (SCT)
Availability: 36 European countries, including the UK and the members of the European Union.
Fee: Mostly free of charge.
Processing time: 1-2 business days.
The SEPA Credit Transfer (SCT) is an electronic transfer of money from one bank account to another across Europe.
As its name suggests, you can conduct only those transactions that are in euro denominations, using SCT. The payments can be one-off or recurring, and single or bulk.
For example, with SCT, you can regularly use a standing order to transfer money to someone’s bank account, but only in euros.
Usually, SEPA credit transfers arrive in the recipient’s bank account within 1-2 business days.
Direct debit authorization
Availability: Germany, UK, Switzerland, Italy, the US, Brazil, Spain, Netherlands, South Africa, and Sweden.
Processing time: At least 3 business days.
Whether you need to pay fixed subscriptions, regular bills of varying amounts, or make one-off payments, you can authorize someone to collect money from your bank account via direct debit.
All you need to do is fill up an instruction form, either online or on paper, and give it to your bank. After that, the bank will automatically transfer a certain amount (as you’ve indicated in the form) to the recipient’s bank account.
However, you can cancel the authorization and stop the direct debit process within the time specified by the bank.
One benefit of direct debits is that they tend to be very low-cost, if not completely free. However, because, they typically take longer than methods like wire transfers, making them not the best option for anyone on a crunch.
Here are a few direct debit systems:
Automated Processing House (ACH) transfer
Country: The US and Canada
Fee: Free or $3 USD-$10 USD
Bankers’ Automated Processing Service (BACS)
Country: The UK
Fee: 10-23 pennies, on average.
Financial Process Exchange (FPX)
Country: Malaysia
Fee: Free or 1.06 MYR-5.30 MYR
Direct deposit or direct credit
Availability: The US, Australia, Canada, and Europe.
Processing time: 1-5 business days.
This method is the exact opposite of direct debit, where the recipient requests the bank to automatically debit or withdraw money from your account for transferring it to the recipient’s bank account.
With direct deposit, an employer or other payer can electronically deposit money into someone else’s checking or savings account, so it’s an alternative to the old-fashioned cheque.
You can make direct deposits to transfer tax refunds, payments from retirement accounts, an employee’s salary, government benefits like social security, and investment redemptions.
Bank drafts
Availability: Global.
Processing time: 4-6 business days or several weeks.
These work a lot like checks, but the only difference between checks and bank drafts is that the issuing bank guarantees a bank draft.
When you request your bank for a bank draft, the bank withdraws the specified amount of money only after ensuring that you have enough money in your account to cover that amount.
Once verified, the bank withdraws the money from your account and transfers it to an internal account or general ledger account. The money is held there until the recipient encashes the bank draft.
What information do you need to transfer money between banks?
When you’re trying to figure out how to send money between banks, you may get confused about what details you’ll have to provide your bank with, so here you go:-
The recipient’s name and address
The name and address of the recipient’s bank
The type of the recipient’s bank account (whether a savings or checking account, and a personal or business account)
The recipient’s bank account number
The routing number
In the case of wire transfers, the International Bank Account Number (IBAN) and the Bank Identifier Code (BIC) or
The amount of money you want to transfer, as well as the currencies if you’ll be making a currency exchange
The date you want the money to be transferred on
Other information you may need depends on the service you’re using.
What is the best way to transfer money from one bank to another?
The transfer method you’d want to use depends on the following factors:-
Convenience
For nearly all the transfer methods we’ve discussed above, you’ll have to contact your bank some way or the other, within a particular time period. But when using online money transfer, you initiate the transfer, and at any moment, too.
Money transfer speed
Usually, the clearance time for money transfers between banks is a few seconds to 5 business days, but Xe can process transfers faster than banks can.
Costs
The cost of moving money from one bank account to another differs from bank to bank, but can be quite expensive, especially if you use bank wires. In the case of online and app-based money transfer, though, you can send money to another bank account at a very low cost.
Considering the cost, speed, and convenience of moving money, we’d say the best way to transfer money between banks is through online money transfer apps and services.
By the way, did you know we’ve got an app and a website that not only lets you move money to another bank account easily and cost-efficiently, but also allows you to convert currencies at a very competitive rate while transferring money internationally?
For smooth and hassle-free money transfers between banks, sign up online or download the Xe money transfer app right now.