Transfer large sum of money between banks

Millions of U.S. households send billions of dollars abroad every year. Whether the funds are for family or friends, or to purchase international assets, it is often difficult to conveniently send large sums of money. In addition, with so many options available, people need to take into account the speed, support, and costs of the various methods that financial institutions provide for sending and receiving funds abroad. The following are five of the best and most secure ways to accomplish this task.

1. Bank-to-Bank Transfers

Some banks let people take money directly from one bank account and deliver it to a recipient's bank account. These types of transactions can be arranged online, over the phone, or in person at the delivering bank. They may have a fee depending on the institution, and the account and routing numbers for both the sending and receiving banks are required.

Key Takeaways

• Speed, costs, and support are some of the factors to consider when sending money abroad.
• Banks can transfer money overseas, but weaker exchange rates and higher fees can make them more expensive compared to alternatives.
• ACH, cash-to-cash, and wire transfers offer other options.
• Receivers of prepaid debit cards can use them to withdraw cash or make purchases.

Some banks may offer special remittance programs for transferring slightly smaller amounts. However, in cases such as these, it is important to look at the exchange rates because although a fee might not be charged, the institution could be making money off of the transaction fee spread.

2. Wire Transfers

Additionally, it is possible to send large sums of money from one bank account to another through the use of a wire transfer. These types of transfers are initiated through a bank officer at the delivering bank who fills out the necessary forms. Wire transfers, for the most part, must be done in person. There is also a fee for this type of service, but wire transfers offer protection from both banks involved, making the fee worth it. For people residing in the U.S., wire transfers must be executed before 5 p.m. EST for the money to arrive the same day.

3. Automated Clearing House Transactions

Similar to wire transfers and bank-to-bank transfers, Automated Clearing House (ACH) transactions are electronic but use a computer-based clearing house that acts as an intermediary to process the exchange of transactions. The Federal Reserve bank, for example, is the largest U.S. ACH operator, processing 63% of all commercial ACH transactions in 2019. There are no fees for these types of transactions, but they do require both banks to be linked together. To do this, both parties need to follow bank-specific instructions.

4. Cash-to-Cash Transfers

If a person has a large sum of money in cash and needs to send it abroad, it is possible to use domestic, walk-in money transfer centers to transfer that money to an international money transfer center. Institutions such as Western Union, MoneyGram, and Ria, are the classic players offering this type of service. In the last several years, many fintech companies have started providing international money transfers. Some names that are prominent in the industry are Wise, Payoneer, PayPal, and WorldRemit.

Physical cash is deposited in one of these money transfer centers. The domestic currency is converted to the currency of the destination country and can be picked up by the recipient at a participating money transfer center. In some countries, the money can be delivered to the recipient at a residential or commercial location.

5. Prepaid Debit Cards

There are some services that can send funds via a prepaid debit card. If this method is chosen to send a large sum of money, the sender can load a prepaid debit card with cash funds, and the receiver of the funds can withdraw them using the prepaid debit card. In some cases, the prepaid card can be used to make purchases just like with a normal debit card. However, there is normally an activation fee or monthly fee.

The Bottom Line

There are several ways to send large sums of money to friends or family abroad. While speed is often the primary objective, costs and security of sending funds abroad should be considered as well. Wire, ACH, or cash-to-cash transfers might be cheaper alternatives to using bank-to-bank transfers. Lastly, recipients of prepaid debit cards can usually use the cards to withdraw funds or make purchases after paying an activation fee.

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If your funds are spread across accounts at different institutions, it helps to have an easy way to make transfers between them. Online transfers are a convenient way to move money from one bank account to another.

Online transfers are generally free, though some financial institutions do charge, and transfers usually take up to three business days to complete. Check with your institution when setting up a transfer to know when to expect funds to arrive and whether there are fees.

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How to transfer money from one bank to another online

To get started, you’ll need to set up a relationship between the two accounts you have at different banks — the one that will send money and the one to receive it.

1. Link the two accounts

Log in to the first bank’s website or mobile app and select the option for making transfers. There may be a choice for internal transfers, that is, moving money in between two accounts within the same bank — from checking to savings, for example. You want the external option, which lets you move funds out to a different bank.

2. Provide external account information

Have the second bank’s routing number and your account number handy. You can usually get this information from the bank’s website or mobile app, or printed paper check. You can also check this list of routing numbers at some of the largest banks.

3. Confirm the new account

After you enter the required information, the first bank will typically want to verify that you have access to the second bank’s account. You might be asked to enter your username and password for the second bank, which the first bank would then verify electronically. Another way the first bank could verify the account is to make a small deposit or two (think a few pennies each) and ask you to confirm the amounts. This process could take a couple of days to complete.

4. Set up transfers

Once the account is confirmed, you can set up transfers from the sending bank’s website or app. Select the sending and receiving accounts, and enter the amount to be transferred and the date for the transaction to occur. From there, you can usually see which date the funds are expected to be available in the receiving account. You’ll also want to choose whether you want to make a one-time transaction or a recurring transfer (once a week, for example). After you’ve made your choices, select the option to submit them.

Benefit to external bank transfers: Boost your savings yields

Bank transfers are common for people who have a checking account at one bank and a high-yield savings account at another bank. If you open a new savings account, you can link your existing checking account for automatic transfers.

This also works for online bank customers, who often need to link their existing bank accounts to fund their online accounts. These folks tend to get the benefit of better rates while having the convenience of keeping their existing accounts.

Check the limits to savings withdrawals

You can generally make as many transfers into savings accounts as you’d like, but there are some points to consider when it comes to taking money out. Online withdrawals from savings accounts are considered convenient transactions per the Federal Reserve. There used to be a limit on the number of convenient transactions you could make per month. The Federal Reserve no longer enforces that limit, but if you have more than six convenient transactions in a month, some institutions will charge an excess withdrawal fee for each transaction over that cap. This fee is typically up to $10 per excess transaction. If you think you might run up against the limit, check with your financial institution to see if it caps withdrawals and charges a fee.

More options to send money to others

• Online bill pay: If you don’t own the account you plan to send money to, you may need to explore other options. Many banks offer online bill pay services, which send a check or electronic payment to a merchant or vendor on your behalf.

• Peer-to-peer payments: If you need to send money to another individual quickly, you can also use a peer-to-peer payments service, such as Venmo, PayPal or Zelle.

• Wire transfers: If you need to send thousands of dollars quickly, it may make sense to use a wire transfer. These services are not always free, but the funds often reach the recipient much faster, sometimes in as little as a few minutes.

Transferring funds from one bank account to another does not have to be a burden. Moving money can be just another online banking convenience.

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