How to Transfer Money from One Bank to Another

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Contributor, Benzinga
Updated: May 25, 2021

Gone are the days of physically withdrawing funds and walking the money from one bank to another. Though there are still things you need to do manually when you switch from one banking institution to another, you can do most of it online.

For example, it’s easy to make a money transfer to yourself from one of your accounts to another or to send money to someone else from your online checking or online savings accounts. Follow Benzinga’s steps for transferring money in a safe, easy way that can save you lots of time.

What to Watch Out for Before You Transfer

You work hard for your money and you want to keep it safe, so watch out for scams that involve money transfers. That’s because sending a money transfer is similar to sending cash and offers no protection. Scam artists can get your money through transfers before you realize you’ve been duped. And there’s not much you can do to reverse the transaction or trace the money once you find out.

A good rule of thumb to use when you send money via transfer is to make sure it’s to someone you know and trust. If someone you know contacts you because he or she needs cash for an emergency, it’s most likely a scam.

Or if you sell something online and the buyer sends a check that’s larger than the amount they owe and asks you to wire back the difference, it’s also probably a scam. The Federal Trade Commission (FTC) offers information about a number of scams that involve money transfers.

How to Transfer Money to Yourself

People decide to move their checking or savings accounts to another bank or credit union all the time, for various reasons. Maybe a different bank offers a better interest rate on checking or savings accounts or certificates of deposit (CDs).

Maybe its branches are closer to home or its hours are more convenient. Maybe it has a larger selection of services, such as financial education about the best way to save money, investment opportunities or international transfer capabilities.

Step 1: Open Your New Account  

The first thing to do when moving your checking or savings account to a new banking institution is to open an account at the new location. You’ll still need to keep the old account open for a while until you’re sure all the automatic deposits and withdrawals associated with it clear.

This includes bills that you’ve paid directly from your old account, such as gas and electric, credit card or loan payments.

Step 2: Reroute Direct Deposits to New Account

If you have direct deposit for your paychecks from work, or for Social Security or deposits from another source, inform your employer and/or other necessary institutions and do any associated paperwork so money can be rerouted to your new account.

Make sure you know the exact date these deposits will transfer to the new account so your automatic debits and withdrawals can be canceled from the old account. Always leave enough money in your old checking account to cover any checks that haven’t cleared or automatic payments that haven’t yet been made to avoid any overdraft fees.

Step 3: Transfer Remaining Funds and Close Old Account

Once you’re certain all direct deposits and automatic payments are coming into and going out of your new account, transfer the remaining funds from your old checking account into your new account either electronically, with a cashier’s check or by going into the old bank and making an old-fashioned withdrawal.

Once the transfer clears in your new account, close the old account and get written confirmation that the account has been closed.

How to Transfer Money to Someone Else

Maybe you owe money to a family member, maybe a friend needs help in an emergency or maybe you want to split the check for a dinner out with your co-workers. Whatever the reason, there are times you might need to do an online transaction, as long as you know the source is trustworthy.

Step 1: Use Their Contact Information

Using the email address or cellphone number of your friend or family member, you can send money securely, no matter where they bank, with an online service or bank app such as Zelle, a free online payment system offered by most major U.S. banks.

The money may be transferred within minutes or may take 1 to 3 business days. Check to see if fees apply.

Step 2: Use Their Account Number

If you have access to the recipient’s account number and check routing number — the 9-digit code that identifies the bank, its branch and location — you can use online banking or an app to transfer money into the recipient’s account. If you send money to a family member on a regular basis, this is an easy and convenient way to make the transfer for both parties.

You can also use this method to transfer money between your own accounts. Often the transfer takes place immediately and sometimes it takes a few days. Check the timing with your bank and ask if any fees apply.

Step 3: Use Your Bank to Send a Check

For a recipient who is not set up for electronic transfers of money, you may be able to arrange for your bank to send him or her a personal or cashier’s check via your online or mobile banking account.

Your bank can deposit or cash a personal check at the other bank, although he or she may have to wait several days for the funds to be made available. With a cashier’s check, they can receive the money immediately, as soon as they cash the check. Again, check with your bank regarding any fees.

How to Transfer Money Overseas

If you need to send money to family, friends or other parties in another country, it’s important to know your rights and the best way to proceed. The Consumer Financial Protection Bureau (CFPB) offers information about new federal rights designed to protect you when you transfer money overseas.

For example, you have the right to have your money delivered to the correct person or business, be informed about exchange rates, fees and taxes and cancel a transfer within 30 days at no cost if necessary. And you can contact the CFPB if you have a problem as you send your money.

Step 1: Get the Facts Before You Pay

Know the out-of-pocket amount you will pay, the exchange rate, if applicable, and the total amount the recipient will receive.

Transfer companies have to give you this information as well as information about taxes or fees that may be collected by the provider. Once you know the facts, you can choose not to send the transfer until you’ve had a chance to compare and decide which company is best for you.

Step 2: Stay Informed After You Pay

Once you’ve sent your overseas transfer, you can see when the money will be available to the recipient and the total amount of funds expected to arrive.

The provider should also inform you of what to do in case of an error, how to submit a complaint and how to cancel a transfer if it becomes necessary.

Step 3: Report Any Errors

The two most common issues reported to the CFPB about overseas transfers involve the incorrect listing of exchange rates, fees or the total due to the recipient on the receipt and the inability of the recipient to access the money on the date promised.

If you believe that your federal rights were violated in some way, you need to contact the provider company immediately. The issue could be resolved with a refund or the transfer resent at no extra cost. If you don’t get a satisfactory resolution, you would then contact the CFPB and they will follow up with the provider.

Skip Waiting in Line at the Bank

Your life is busy and it’s not always easy or convenient to get to a brick-and-mortar bank or credit union, especially within bankers’ hours. You may have to adjust your schedule a little to close out an account from one bank and open one in another, but for many money transfers, you can take advantage of the ease and convenience of online and mobile banking.

To transfer money between your own accounts or send funds to another person in the United States or overseas, online transfers are the way to go. Just do your homework so you don’t get caught up in a scam. You’ll find that transferring your money online is quick, safe and convenient.

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