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What Is the Best Way to Transfer Money Between Banks?

Transferring funds electronically is safe and easy, but it may take time.
Carrying cash between banks can be dangerous.
Records of an international wire transfer.
Article Details
  • Originally Written By: Paul Woods
  • Revised By: Bott
  • Edited By: Jacob Harkins
  • Last Modified Date: 16 October 2014
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The two primary methods to transfer money between banks are electronic and physical transfers. An electronic transfer is usually considered the best way as it is typically faster, simpler, and safer; however there can be fees associated with it. For a physical transfer by check, fees are typically smaller, but there can be a waiting period at the receiving bank. Physically carrying currency from one bank to another is free and the deposit registers immediately, but there are safety and inconvenience factors.

Electronic Transfers

An electronic transfer between banks is usually considered easiest and safest, but there are some drawbacks such as fees and wait times. Most banks offer several options to transfer money electronically including wire transfers, execute transfers, and electronic funds transfers.

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  • Wire transfers: The normal electronic method to transfer money between banks is called a wire transfer, in which the initiating bank accepts a withdrawal request from an account holder and sends an electronic message to a receiving bank regarding the impending transfer. Perhaps the biggest drawback is that the transfer is not immediate — it can take a few hours or up to one day to complete, depending on the time of day. There is almost always a cost associated with sending and receiving the wire transfer to the account holder, and the customer needs to know both the receiving bank's routing number and the specific account number to which the funds are being transferred.

  • Execute transfers: Account holders with third-party services like Pay Pal can do execute transfers, which are done by registering the withdrawing and receiving accounts with the service and passing money through the third-party service. Since both accounts are registered with the same service, the transfer is generally faster than a wire transfer and can usually be completed through the company's website. There can be fees in this type of transfer as well and it takes time to set up the third-party account.

  • Electronic funds transfers: Most U.S. banks offer electronic funds transfers (EFT) between accounts within the bank, and to third parties such as utility companies through a bill-paying service. This practice can include transfers to other banks. The customer who wants to routinely transfer money between banks should select an institution that offers this service.

Physical Transfers

In general, physical transfers have lower fees, but cannot be done over the Internet, which may be inconvenient for some account holders. Transfer fees may vary between banks, as can wait times for large deposits. Some options for physically transferring money include using personal or business checks, cashier's checks, or cash.

  • Personal or business check: The best way to physically transfer money between banks is with a personal or business check, as long as the speed of the transfer is not an issue. Transferring by check typically carries no cost in addition to the normal charges, if any, of the checking account that is being used. For this type of transfer, there may be a waiting period of up to 10 business days while the receiving bank verifies the deposit.

  • Cashier's check: A faster, though typically more costly, alternative to transfer funds between banks is a cashier's check. This type of check is issued by a bank after the account holder gives that bank money in the amount designated on the check. The receiving bank usually will accept it immediately, but in some cases it must be verified first. There is typically a small cost associated with generating the check.

  • Cash: It is possible to transfer money between banks by withdrawing actual currency from one bank and depositing it in another. Most banks do not keep large-denomination currency, so a sizable transfer has the inconvenience of carrying a large number of bank notes. A transfer of money between banks with cash is simplest, but carrying a large amount of money can be dangerous since it could be stolen.

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Discuss this Article

anon966896
Post 10

A list of apps that you can use with info about each one would have been more useful. The other information in the article is readily available on the Internet or by contacting your bank.

anon330845
Post 8

My sister is transferring money from a Canadian bank to India, but twice they have charged her 100 Canadian dollars, as she had put my full name (which includes my dads name) but on my side, my bank doesn't show my dad's name. Why they have charged her? Can anyone explain or help?

anon185921
Post 6

@Glasshouse: They did it on purpose, since they earn interest for each day money are kept, each bank in the chain will want to keep it just a tad longer to make some profit. They will take as long as possible to locate your funds due to this exact reason.

Very sorry to hear about your experience.

Best of luck - hope you find or already found the money!

ValleyFiah
Post 4

@ Glasshouse- Unfortunately, international money transfers get lost all too often. When a wire is sent, the details must be entered into the computer system in a particular order. If one letter or number is mixed up, or the date in the reference numbers is entered in the wrong order (all too common when sending money internationally) your money will become stuck in limbo at one of the intermediary banks along the way. The process can take up to three months to resolve, costing the parties involved if the money is a large sum, or is for an important transaction.

Often times the error is human, and that human does not want to get in trouble for costing the bank money. Banks also deal with lots of money so five thousand dollars is chump change to them, putting your inquiry low on the priority totem pole. I would recommend filing suit in small claims court. The evidence is in your favor, it doesn't take much time, and all it will do is force the bank into action to find your money. It will create a timetable for when the money must be found. To be safe, sue them both, which you have the legal right to do.

FrameMaker
Post 3

@ Glasshouse- Transferring money between international banks is always a little risky. My Stepfather does business in China and he has had wires lost before, but they have always been lost after they left the United States, not the other way around. Your experience is somewhat rare. Anyway, you will need to contact the rep at the Swiss bank you had the money wired from and get either the IMAD number or the Field 20 number. These numbers should allow you to initiate a trace from the receiving bank.

I would also recommend going into your branch office and speaking to a manager there. They may be able to persuade their own people to help you more than you would, i.e. have direct lines of communication with other managers within the company, especially if you threaten to close accounts, etc. Good luck, and remember, your money is not lost, it may just take a few more weeks for the banks to get their act together.

Glasshouse
Post 2

I have family in Switzerland, and they recently initiated a wire transfer for a significant sum of money between a large Swiss bank and this country's second largest bank, JPMorgan Chase. Somehow, the wire transfer was lost. It has been one of the most frustrating experiences trying to get the money back (three weeks and counting), and we may be forced to take legal action against Chase Bank. The money was tracked from the Swiss Bank to the intermediary bank and from there to the bank in the United States. Once it went into the system at Chase Bank, it was lost.

No one at Chase has been able to explain to me how a wire transfer works. They are not responding to the constant emails from the Swiss bank either. Five wires were sent out from that Swiss account in the same day, three of which went to chase. Of the three that went to chase, mine was the only one that has not made it. Does anyone know how to track an international wire in the United States? I have gone up the call center ladder to the third supervisor above the international wire transfer rep, and no one can find the money or tell me what I need to find it.

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