Free Guide: Moving Money Between Banks Safely

Understanding the Different Ways to Move Money Between Banks

When you need to transfer money from one bank account to another, you have several options to choose from. Each method works differently, takes a different amount of time, and has different costs. Understanding these options helps you pick the right one for your situation.

The most common way to move money between banks is through an Automated Clearing House (ACH) transfer. An ACH transfer uses a network that banks belong to. When you start an ACH transfer, the money moves electronically from your account at one bank to an account at another bank. This process is secure because it uses encrypted connections and requires you to verify account information before the transfer happens. ACH transfers typically take one to three business days to complete. Most banks do not charge you to send or receive an ACH transfer, though some banks may charge a small fee for certain types of transfers.

Wire transfers are another option. A wire transfer moves money directly from one bank to another through a separate network. Wire transfers are faster than ACH transfers—they often complete on the same day or within one business day. However, wire transfers usually cost money. You may pay between $15 and $50 per transfer, depending on your bank. Wire transfers are a good choice when you need money to arrive quickly, such as when buying a house or car.

A third option is to use a third-party payment service. Some companies, like PayPal, Venmo, or Square Cash, let you move money between bank accounts. These services connect to your bank account and move money for you. Many of these services are free, but some charge a small fee depending on how you use them.

Practical takeaway: Before you move money, think about how fast you need the transfer to happen and whether you want to pay a fee. ACH transfers are free and safe for most situations, while wire transfers cost money but arrive faster.

How to Set Up an ACH Transfer Safely

Setting up an ACH transfer is straightforward, but you need to follow certain steps to protect your money. The first thing you need is information about the account you want to send money to. You will need the routing number and account number of the other bank. A routing number is a nine-digit code that identifies a specific bank or credit union. The account number identifies your specific account at that bank. You can find both of these numbers on the bottom left of your checks, or you can call the bank or look on their website.

Before you complete your first transfer, verify that you have the correct information. One common way to do this is to send a small test transfer—usually between $0.01 and $1.00. Once the transfer arrives at the other bank, you can confirm that the account information was correct. After you verify the information, you can make larger transfers with confidence. This step takes a few extra days, but it prevents the mistake of sending money to the wrong account.

When you set up the transfer through your bank's website or app, you will enter the routing number and account number. The bank will ask you to enter the name of the person or business that owns the account. Make sure this name matches the name on the account. If the names do not match, the transfer may be rejected or delayed. Your bank may also ask you for other information, such as the type of account or the address associated with the account.

Most banks let you schedule an ACH transfer to happen on a specific date in the future. This is helpful if you know when you need the money to arrive. For example, if you know you will receive a paycheck on a certain date, you can schedule a transfer to move part of that money to another account automatically. However, you cannot cancel an ACH transfer after it has been processed, so make sure you have the correct information before you confirm the transfer.

Practical takeaway: Always verify the routing number and account number before making a transfer, and consider sending a small test transfer first to confirm everything is correct.

Wire Transfers: When You Need Money Faster

Wire transfers are a method of moving money between banks that is faster than ACH transfers but comes with higher costs and more responsibility. When you send a wire transfer, you are instructing your bank to send money directly to another bank using a special network. The receiving bank then deposits the money into the specified account. Most wire transfers are completed on the same day if you send them before your bank's cutoff time, which is usually between 2 p.m. and 5 p.m. If you send a wire transfer after the cutoff time, it will typically arrive the next business day.

To send a wire transfer, you will need the same information as an ACH transfer—the routing number and account number of the receiving bank—plus additional details. Your bank will ask for the full name of the person or business receiving the money, their address, and possibly their phone number. For international wire transfers, you will need even more information, such as a SWIFT code, which is used to identify banks outside the United States. You should also ask the receiving bank if they have any special codes or instructions you need to include, such as a reference number or account designation.

Wire transfers cost money. Domestic wire transfers typically cost between $15 and $50, depending on whether you are sending money within the United States or to another country. International wire transfers usually cost more, often between $25 and $75. Some banks charge the sender, some charge the receiver, and some banks split the cost. Before you send a wire transfer, ask your bank what the total cost will be. Never wire money to someone you do not know or trust, because wire transfers cannot be reversed. Once the money arrives at the receiving bank, it is very difficult to get it back, even if there was a mistake.

To protect yourself when sending a wire transfer, verify the account information directly with the person or business receiving the money. Call them using a phone number you know is correct—do not use a phone number from an email or text message. Confirm the account number, routing number, and full name on the account. Scammers sometimes trick people into wiring money by pretending to be someone they know or by creating fake emails that look like they come from legitimate businesses.

Practical takeaway: Use wire transfers only when you need money to arrive quickly and you are sending it to someone you know and trust. Always verify the account information by calling the recipient before you send the wire.

Using Third-Party Payment Services Safely

Third-party payment services like PayPal, Venmo, Square Cash, and Google Pay offer another way to move money between bank accounts. These services are popular because many of them are free and they are easy to use on your phone. However, they work differently than bank transfers, and you need to understand how they handle your money and what protections are in place.

When you use a third-party payment service, you are not transferring money directly from one bank to another. Instead, you are sending money to the payment service company, and then the payment service company moves that money to the receiving account. This means the payment service company holds your money temporarily, sometimes for several days. During that time, your money is in the company's account, not your bank account. You should only use payment services from companies that have a good reputation and strong security measures.

Most third-party payment services are free when you transfer money using your bank account or debit card. However, some services charge a fee if you use a credit card or if you want the money to arrive faster. For example, some services charge 1% to 3% of the transfer amount if you pay with a credit card. Other services offer a "rush delivery" option that delivers money the same day for a small fee. Before you use a payment service, read their fee schedule to understand all the costs.

When you create an account with a third-party payment service, you will need to provide personal information and connect your bank account. The service uses this information to verify your identity. Many payment services use two-factor authentication, which means you need to enter a code that is sent to your phone or email in addition to entering your password. This extra step makes your account harder for hackers to access. You should enable two-factor authentication on any payment service account you use.

Be cautious about the information you share through third-party payment services. Do not send money to people you do not know, even if they claim to be from a company or organization you trust. If someone asks you to pay them through a third-party payment service to collect a debt, receive a prize, or complete a transaction, verify their identity through another method before you send money. Scammers often use payment services because the transfers are quick and hard