Banks are financial companies that allow you to deposit and use money. You can have various bank accounts such as savings, checking, CDs, Brokerage, IRAs, etc. Banks give you secure avenues of keeping funds so that you do not have to stack notes in your house. We all know that keeping money in our houses is risky as we might lose it to thieves or calamities such as fire and flooding. You will learn more about how to wire money from one bank to another.
There are various kinds of transactions that you can carry out with a bank account. The ability to transfer money from one bank to the other is critical as it allows people to transact with others. You can buy a commodity and then send the funds to the seller even if they are far away from your location. If you are working away from home, it is easy to send funds to your family using your bank account without traveling to your home.
It is important to note that you can move money from one account to another online. Therefore, sending wires domestically or internationally is easy as you can do it right from your palm. In the olden days, you had to visit the nearest branch of your bank to transfer funds. That is now past tense as few people prefer transferring money over the counter at a branch.
Different Ways To Use A Bank Account
As I have mentioned earlier, there are various types of transactions that you can carry out after opening your account. Let me discuss them in detail so that you can understand them better.
i) Deposit money
Your bank should have money so that you can use it for your various transactions. Therefore, it is good to know how to add money to your account. First of all, you can add money at your physical branch by walking in with cash and instructing the cashier to put money in your account.
You must fill in a deposit slip indicating the amount of money you are depositing. The funds should reflect in your account within a few minutes after depositing.
You can also deposit finances in your account via an ATM. You need to put the funds in an envelope together with a wholly filled deposit slip, then push it in the deposit slot.
The cashiers will pick up the envelope and deposit the funds in your account. Alternatively, you can deposit a check into your account. Once the processing is over, the funds will reflect in your account.
ii) Send money
Banks allow you to transfer money from your account to other accounts. You need the recipient details to be able to transfer the funds. You can send money using ACH or wire transfer. ACH takes a long time to process as the recipient has to wait for 3-5 days for the transfer to process.
Wire transfer completes within 24 hours. Therefore it is among the best ways to transfer money to a bank account. Remember that you can also send money using a check. It is a written and signed document directing financial companies to withdraw money from the writer’s account and deposit it to the beneficiary.
Using a check or sending money over the counter is one way you can send money from a bank account without verification, unlike online banking which requires you to enter a One Time PIN (OTP) to ascertain that you are the one making a transfer.
iii) Pay bills
Banks allow you to pay electricity, water, and internet bills. You require the recipient’s account details and can make the necessary payments every billing cycle. Interestingly, banks allow you to set up automatic payments for your bills so that you do not have to remember now and then.
iv) Save money
Saving money is one of the essential purposes of a bank account. You can save money using a savings account and earn interest over time. If you plan to undertake a particular project in the coming years, a bank account is best to keep your finances. The funds are secure and even insured by FDIC. If your bank collapses, your money will still be available up to $250,000.
There are also other special bank accounts called CDs which allow you to lock your savings for a particular duration as you earn interest and then withdraw when the lock period is over. Depending on your wishes, you can lock your money for three, six, or 12 months. Some banks may have different locking periods.
Interestingly some checking accounts allow you to earn interest when maintaining a particular daily balance. Their rates are usually high, bearing in mind that it is not easy to save funds in a checking account.
Process To Wire Money From One Bank To Another
Wire transfer is a method of money transfer where the sending and receiving banks communicate directly with each other to facilitate the transfer. You can make an instant wire transfer with routing and account number, although it may take 24 hours for the finances to appear in the recipient’s bank account.
Since the transfers are instant, you may not recover funds sent to the wrong recipient. That is why you must be careful when transferring money using the transfer method. The following process is helpful when sending wire transfers online.
- Log into your online bank account or banking app
- Navigate to the ‘Wire Transfer’ section
- Enter the necessary details for the recipient, such as the routing and account numbers
- Enter the amount of money
- Authorize the transfer
When sending international wires, you will require more details, including the following.
- Name and address of the receiving bank
- Recipient’s bank account number
- Recipient’s account type
- Recipient’s bank routing number
- Recipient bank’s BIC or SWIFT code (when applicable)
- Reason for the transfer
As I mentioned earlier, domestic transfers are faster than international ones. You can also utilize the wire transfer method to transfer money from one card to another. That applies to prepaid cards, which generally have routing and account numbers.
A bank is a financial company that allows you to deposit and use money. It allows one to carry out various activities such as sending and receiving money, withdrawing money, payment of bills, as well as saving funds. You can open bank accounts online or at physical branches. Wire transfer is one of the methods that you can use to send money between banks either online or at a physical store.