There are various ways you can move funds from one person to another. When you send money to someone else, you actually transfer money from your account to their account. Banks and credit unions are the major financial institutions that most people rely on to transfer money. However, there are other platforms such as PayPal, Payoneer, Venmo, Western Union, and MoneyGram. Today you will see how to transfer money using the routing number and account number.
Many financial institutions charge fees on money transfers. You might be wondering why they charge fees, but you need to know that that is the way they make money. Most institutions do not charge you money when you send funds to accounts of the same institution. However, they still have other avenues of making money from you. For instance, some financial institutions have monthly fees, annual fees, and inactivity fees.
Nowadays, transferring money is very easy due to the improvement of technology. Banks, credit unions, and other types of financial institutions allow you to manage your account online. You only need to use your smartphone or computer to create your online account, and you are good to go. Online accounts are convenient since you can access them anytime you want. Furthermore, they help you save time that you could have wasted queuing in your bank or credit union offices.
What is the meaning of the routing number?
Since I want to show you how to transfer money using an account and routing number, I can explain to you what a routing number is. I suppose you know that an account number is a unique number that you get when you open your account with a bank or credit union. The number distinguishes you from other customers so that when you deposit money, the funds go to your specific account.
Back to the routing number now. Well, a routing number is a nine-digit code that identifies a particular bank among the others. Each bank has its routing number and shows where exactly you opened your bank or credit union account. That means a bank may have several routing numbers depending on location.
When you look at your check, you will see the number as the first group of numbers at the bottom of your check, just on the left side. Alternatively, you can see your bank’s or credit union’s routing numbers online when you visit the bank’s website. You can also call your customer care and get the digits.
Where Is your Account Number on a Check?
Apart from the routing number, a check also contains the account number. The account number is the second set of numbers, just after the routing number, and is printed on the bottom of your check. It is usually 10-12 digits, and as I said earlier, it is specific to your account.
The other place you can find your account number is on your monthly statement, be it paper or e-statement. You can also locate your account number online when you sign in to your account. Debit cards also have the account number, and you can either find it embossed or laser-printed on the front of the card. An account number is essential when you want to transfer money to someone else’s bank account within the same institution.
What does ACH mean and how does it operate?
ACH means Automated Clearing House. It is a system in the U.S. that financial institutions use for electronic money transfers. ACH transfers are also known as “direct payments.” They offer an easy way to transfer money from one bank or credit union account to another without using credit card networks, paper checks, wire transfers, or cash.
An ACH transfer does not involve many processes. You could even be using ACH transfers with your financial institution without even knowing it. The following are examples of an ACH transfer.
- A customer paying a service provider.
- Businesses paying their suppliers for products.
- Employers depositing funds into their employees’ checking accounts.
- Consumer moving money from one bank account to another.
There are two main types of ACH transfers. They include credits and debits. ACH credit refers to when money is deposited into your account via the ACH transfer process. You must give the account plus the routing number to the concerned institution for an ACH credit transfer.
On the other hand, ACH debit refers to an ACH transfer that involves withdrawing money from your account and depositing it to the account of your water supplier, internet service provider, and so on. You can set up an automatic payment whereby money will be deducted from your account periodically and deposited in the target account. You should get your service provider’s routing and account numbers to perform ACH debit transfers.
One interesting thing with ACH transfers is that you can send money to international recipients. You also need to note that international transfers are a bit costly compared to domestic ACHs. Furthermore, all kinds of ACH transfers take several days to complete. If you carry the process on the weekend, the transaction takes longer than when you do it on a weekday.
What is the difference between ACH and wire transfer?
Many people are often confused when it comes to ACH and wire transfers. Even though the two types of transfers appear the same, they are a bit different. Since you understand what an ACH transfer is, I think it’s high time you also know what a wire transfer is. Well, a wire transfer is a kind of money transfer between accounts.
Like the ACH transfers, there are two types of wire transfers. You can carry out both domestic and international transfers. When doing an international wire transfer from the US to another country, you must send more than $15. Wire transfer is a faster money transfer method to send money from one bank to another.
The following are the critical differences between wire and ACH transfers. Have a look.
- ACH transfers take several days to process, while wire transfers are processed within the same business day.
- Wire transfers allow recipients to use money as soon as they appear on their accounts, while ACH transfers keep the money pending until they clear the ACH system, which can take up to three business days.
- ACH transfers allow you to reverse a transaction if you realize that you send it by mistake. On the other hand, wire transfers do not allow you to cancel a transaction. l you must be very keen when entering the details not to make any mistake.
- Wire transfers charge hefty fees, ranging from $10 to $35, while most ACH transfers are free.
If you are stuck on which service to use between ACH and wire transfers, then Wire transfer seems better since it is faster, and users can access their funds immediately.
How is the routing number different from an account number?
You might be wondering how the two numbers are different from each other. Well, there is a big difference between a routing number and an account number.
First of all, a routing number distinguishes a particular bank from the others. It helps when transferring money from your bank to the other bank. On the other hand, an account number distinguishes you from other customers of the same bank. Each customer must have their account number.
Secondly, a routing number has nine digits. Just as I mentioned earlier, you can find it on your check as the first set of digits found at the bottom of your check from your left. The account number has 10-12 digits, and it is the middle set of the 12 digits.
How can I transfer money with just my routing and account number?
You can transfer money from your account using your routing and account numbers. That happens when sending money from your bank to another bank. You can use wire transfers or ACH to move money electronically to others. The following is the process you can use to transfer money using the routing and account numbers.
- Log into your online account.
- Navigate to the money transfer section.
- Enter the recipient’s details which include the account and routing numbers.
- Enter the amount to send.
- Hit on the send button.
- Review the transfer details.
- Authorize with your PIN, Touch ID, or any of the most appropriate methods.
The recipients should get the money within the same business day if you use wire transfers and within several days if you use ACH transfers.
Best ways to transfer money using routing number & account number
There are several ways one can move money using an account and routing number. They include the following.
1) Bank to bank money transfer
When you are transferring money from your account to another account of a different bank, you require both the account and routing numbers. Similarly, if someone from a different bank is sending money to your bank account, you must provide them with your routing and account numbers. If you are transferring to an international recipient, you can use the ACH or wire transfer method. Direct deposit is only for domestic transfers.
2) Money transfer using check
You can write a check to move money from your bank account to another one. The other bank will use your check’s routing and account numbers to request money from the other account. When writing a check, you should have enough money in your bank account for the transfer to be successful. Otherwise, the check will bounce.
Remember that if you develop the habit of bouncing checks, you will find it challenging to open bank accounts with new banks or credit unions when your name enters the ChexSystems. It can take five years for your details to be out of the ChexSystems.
When writing a check, you can use the following format.
Step 1: Write the date of the check on the line at the top right-hand corner.
Step 2: Write the name of the person or the company you are paying the cheque to. Make sure that the names of the beneficiary match those on their identification document. Also, you can just write the word “cash” if you do not know the beneficiary’s names. However, if the case is lost, anyone can collect it and cash it out.
Step 3: Write the amount of money to pay in numbers.
Step 4: Write the amount of money to pay in words. Ensure that the amount in words matches the amount in figures, or else the check will bounce.
Step 5: Write a memo detailing why you are making the payment. You can write electricity bill payment, water bill payment, and so on, depending on why you are writing the check.
Step 6: Sign the check. It shows that you agree with the concerned bank to take the specified amount from your bank account. If you do not sign, the check becomes invalid.
3) Depositing directly
The process of sending money from your account to another account of someone else is called direct deposit. You require both the routing and the account number of the recipient. If you are an employer, you can use direct deposit to pay your employees.
The only disadvantage of direct deposit is that it does not allow you to transfer money internationally. Furthermore, it takes longer for the funds to reach the concerned bank account, contrary to the account-to-account transfers credit union, or mobile money wallet.
4) Using money order
A money order works like a check because you can cash it or deposit it into a bank account. When sending money via money order, you purchase a paper with details of the money to send. It has two spaces to sign—one for you and the other for the recipient.
You can pay for your money order using a check or debit card. You can also use your account and routing numbers to buy a money order from another bank. Money order’s function both domestically and internationally. The following is the procedure to write a money order.
- Visit your bank or credit union with cash, a debit card, or use your bank or credit union account to fund the cost.
- Fill out your name as well as that of the money order beneficiary. You should be keen to ensure that everything is correct since you will not change the details later.
- Keep a duplicate of the money order receipt. It is usually a carbon copy of the original money order.
- You can then track your money order details to ensure that the recipient gets the money.
5) Bank to prepaid card money transfer
You can transfer money from a bank to a prepaid card and vice versa. A prepaid card is a kind of payment card that allows you to buy goods and services online. You can recharge your prepaid card from a bank or credit union. Since a prepaid debit card is a separate financial institution, it has an account and routing numbers.
Therefore, to move money from your bank account, you will need to get your routing and account numbers online when you sign in to your account. Remember that you need to use the same procedure as when transferring money from your bank account to another account of a different bank. Similarly, you can transfer money from a prepaid debit card account to a bank account.
6) Withdrawing cash
An account and routing number can help you withdraw money from an online bank account to another bank account. You require the routing and account number of the receiving bank account. Once the money is in the target account, you can withdraw at an ATM or a bank account. Also, paying your monthly bills is a way of withdrawing money using the two sets of numbers.
7) Billpay with account and routing number
You can get the routing and account numbers of your service provider’s bank account and set up an automatic direct transfer where you will be paying your bills such as electricity, internet services, water, and many more. The reason for setting up a direct transfer is to ensure that you do not forget to pay your bills. Some service providers can even fine you if you do not pay your dues on time.
How to withdraw funds using a routing and account number
Somewhere up, I mentioned that you can use your routing and account numbers to withdraw money from your bank account. The following is a way to withdraw money with routing and account numbers when paying your monthly bills.
- Get the account and routing numbers of the service provider.
- Log into your bank account.
- Navigate to the money transfer section.
- Choose to set up a direct deposit.
- Enter the routing and account numbers.
- Enter the amount of money to transfer.
- Authorize with your Touch ID or PIN.
- Choose whether you want to set automatic payments.
This way, you will have withdrawn your money using your account and routing numbers. Remember, you could have withdrawn money from your account number to make your payment. But can someone withdraw money with my account and routing number?
Well, it is difficult to withdraw money using someone’s account and routing number. However, some criminals can use the two sets of numbers to wipe your account clean. Therefore, it is always good to give the numbers to the people you trust.
I know you are wondering if someone can use these numbers to withdraw money from your account. Well, someone can write a check to request funding from your bank using the numbers if they use your sign as well.
How is it possible to transfer money instantly using routing and account numbers?
Direct deposit and ACH transfers require your account and routing numbers but the funds take too long to reflect in the recipient’s account. However, when you transfer money using the wire transfer method, then funds can reach the recipient instantly or within 24 hours.
You need to understand that most wire transfers are irreversible, and you need to be very careful when entering your details; otherwise, you may lose your money.
Can I do transactions only by knowing my bank account number?
Nowadays, creating a bank account is easy online. You can get a free online checking account with no opening deposit or credit check. You then get your account number and get started with various kinds of transactions. However, your account number alone is not enough to carry out transactions. If it could be enough, then anybody could take money out of your account.
When using an online account, you need your login credentials to access money from your account. You usually create a PIN, Touch ID, Face Unlock, or password when creating an account online for the first time. When logged in, you can send money to others, pay bills and view your balance, among other things.
Why would someone need routing and account number?
There are various reasons why you need a routing and account. The following are the reasons why you require the two sets of numbers.
i) Send money to your bank account when someone needs
A routing and account number allows you to transfer money to someone else when performing direct deposit, wire transfer, or ACH. If you are sending money to an account of the same bank, you only need the recipient’s account number, and you are done.
ii) When using bill pay or online purchase
Online bill pay requires you to transfer money from your bank to the bank account of the recipient. Therefore, you need the account and routing numbers of the service provider to send money to their accounts.
iii) When you link your account to a financial app
Financial apps allow you to withdraw money to your bank account. However, you must link them with your bank account. In such a scenario, you require your routing and account numbers. Similarly, when you add a bank account to a financial app to help you fund your transactions, you require your routing and account numbers.
iv) When you issue a check
When you write a check to another bank, the receiving bank will use your bank account and routing number to get money from your account and credit it to the beneficiary’s bank account. That is why I earlier mentioned that someone can request a check from your bank if they have the routing and account numbers plus your physical address.
I have also seen people on various platforms asking, can a power of attorney transfer money to themselves? The power of an attorney general can never send money to their accounts unless you give them the go-ahead.
Can you send funds with just a routing number?
There is no way you can send money to someone using the routing number only. You have to use it with the account number. Similarly, you cannot send money to someone else’s bank account using their account number only. If someone just gave you a routing number, you should ask them to give you their account number to send them money successfully.
The most common online money transfer platforms
Apart from using your bank account, you can use other online money transfer platforms to move money. They include the following.
- Western Union
- World Remit
- Cash App
The modern world allows you to transfer money in various ways. You can transfer money online and at physical branches of banks and credit unions. When sending money to an account of the same bank or credit union, you require only the account number.
However, you need both the routing and account numbers when transferring money to a different bank account. Someone can use your routing and account numbers to steal from your bank account.