Transferring money from one person to another is one of the best practices that ensure money circulation. Nowadays, you can send money online to a person far away from your location using online means. Banks are some commonly used mediums of money transfer whereby you can send money either domestically or internationally. I will be mainly taking you through the best way to transfer money between banks so that you can know which method works better.
Banks are financial companies that allow you to deposit and use funds. There are online banks and others that operate physically at branches. However, modern banking institutions combine both online and physical branch operations. Not everyone trusts online processes, and some people, and more so the older people, prefer banking at the locations. Whichever way, you still need to send money to others.
It is essential to know that you can share funds with the same bank or a different banking institution. Sending money within the same bank is easy and faster as the same company handles the transfers. That is contrary to transfers between different banks. Funds take several days to reflect in the target account, and more so when you use ACH.
What are the requirements to open a bank account?
You need to understand what you require when opening a bank account. The federal government requires every bank, credit union, and mobile money wallet (such as PayPal, Payoneer, Venmo, Skrill, etc.) to obtain various materials from account applicants to ensure that only genuine people can have accounts. If left open to anybody, criminals can acquire bank accounts to use for their evil activities.
The things you should have when getting an account include the following.
- Social Security Number
- An identification document; e.g., a driver’s license, a government id, or a passport
- Valid email address
- Phone number with the ability to receive text messages
- Current physical address
You may be required to provide additional information depending on the bank you are opening an account with.
How to open a bank account?
You can either open an account at a branch or online. Opening a free online checking account with no opening deposit or credit check using your smartphone or even a computer within minutes is possible. You need to visit the relevant bank’s website and navigate the account opening section to get started. There, you will input all the information needed and upload the necessary documents as per the guidelines.
You need to enter your full name as it appears in your identity document, your State, City, ZIP code, phone number, email address, last four digits of your Social Security Number, and others. Once you have finished keying in the information and submitted them successfully, you then wait for feedback.
You may get immediate feedback or wait for a few days for the concerned institution to determine whether you qualify for the account applied for. If not, you will receive a rejection message directing you to the best alternative. Some people think that opening an account with any financial company is automatic. However, that is not the case as financial companies run your details in the ChexSystems to see if you qualify.
You may not qualify to hold an account if you have poor banking history, such as writing bouncing checks, closing negative accounts, or carrying out fraudulent transactions. However, some banks offer second chance checking accounts to assist you in bouncing back to the best banking habits.
What are the different types of bank accounts?
There are two main types of bank accounts that you can have for your transactions. They include Checking and savings accounts.
i) Checking accounts
Checking accounts are prevalent with people who receive payments through banks. Checking accounts allow you to access your funds any time of the day. That means you can use the bank account to transfer money to someone else’s bank account or withdraw money any time of the day.
Checking accounts come with debit cards that you can use for your daily transactions. A debit card allows you to access funds from your checking account either for an online or a physical location transaction. You can also withdraw funds at an ATM point if you have a PIN for your card.
ii) Savings account
A savings account allows you to keep the money for your future use. If you have a surplus amount of money, you can keep it in a savings account instead of piling the notes in your house, which can be risky as thieves may attack and steal. Checking accounts do not have debit cards as it does with checking accounts. However, some have debit cards, although their usage is full of restrictions.
When you keep money in a savings account, you earn some interest, usually calculated yearly. It is called the Annual Percentage Yield (APY). It is important to note that some checking accounts allow you to earn interest if you maintain a minimum balance in your account.
What is the best way to transfer money between banks?
As I mentioned earlier, you can transfer money between different banks and credit unions. There are several methods you use to move money between banks. They include the following.
1) Wire transfer
Wire transfer is an electronic money transfer method that allows you to transfer money online. Here, you have to transfer money using the routing number and account number. The routing number identifies the receiving bank, while the account number shows the exact account holder. A wire transfer allows you to transfer large amounts of money to someone else or another institution.
Funds send via domestic wire transfer arrive within 24 hours. However, international transfers may take longer. It is good to understand that wire transfers can take place between payment cards and banking companies.
Most wire transfers are irreversible, and thus you should be very careful when sending money using the transfer method. It is advisable to transfer money to people you know. Despite having that bit of insecurity, the transfer method allows you to transfer large amounts of money faster.
2) ACH transfers
You can move money to someone’s account using ACH transfers. ACH means Automated Clearing House, whereby funds are held before being released to the receiving bank.
ACH transfers take several days to reflect in the recipient’s account. Usually, it takes three days for the funds to reflect on the recipient’s account. International transfers take longer due to the various issues such as currency used, time the sending was done, and the policies of banks and countries.
ACH transfer is safe to send money since you can reverse the transfers if you realize you sent it to the wrong person. You can also accept ACH payments instantly from other senders online using your banking app.
3) Use money transfer agents.
Various money transfer agents facilitate sending money between banks. They mostly facilitate wire transfers between domestic and international transfers. They include the following.
Zelle is a payment service company that allows you to transfer money from one bank to the other. The app integrates with various banking companies to make sure that your funds’ transfer is easy. To enroll on Zelle, you have to ensure that your bank supports the platform. Various banks support Zelle, and you can be sure that you cannot miss one around your town.
Zelle also works as an independent app whereby you can send money to other Zelle users. However, you cannot send more than $500 per week. Different banks have different limits that you can move with Zele. To use Zelle to send someone else’s bank account money, you require their phone number registered with Zelle. You do not need their account number, and thus people can keep their account details a secret.
When you send funds to other bank accounts using Zelle, the money reflects immediately on the recipient’s account. It is recommended that you send money over Zelle to people that you trust. Zelle transfers are instant, and if you send someone by mistake, you may not be able to get the funds back once the recipient claims them.
The Zelle only allows transfers within the United States of America and thus does not allow international transfers. Zelle is the best way to transfer money between banks in the US.
5) Western Union
Western Union is another way you can facilitate money movements with the country and internationally. You only need to use money in your bank account on your online Western Union account and then provide the recipient’s bank account details. Western Union then facilitates the transfer within minutes.
You can also carry out a western Union transfer at a branch since the company has numerous collection points worldwide. According to my, Western Union is the best money transfer service for international transfers. You can even transfer money from a prepaid card to a bank account using the Western Union method.
MoneyGram operates like the Western Union, whereby it bridges transfers between two banks. You must draw funds from your bank and then transfer via MoneyGram to the other bank. MoneyGram also allows international money transfers.
Sending funds from one bank to the other allows proper circulation of money. You can send money domestically or internationally online or at a branch. When you transfer funds from one bank to another, the funds may reflect immediately or after several days, depending on the transfer method used. ACH and wire transfers are the two main ways you can use to move funds from one bank to the other.