What is a bank transfer and how does it work? (2024)

FAQs

What is a bank transfer and how does it work? ›

A bank transfer lets you move money from one bank account to another. It's usually instant, free and done using mobile or online banking, over the phone or in branch.

You instruct your bank to make the transfer. The money then leaves your account and is sent by your bank. It will arrive directly in the account of the person receiving it.

The customer instructs their bank to transfer the relevant amount to the business' bank account, including the unique reference code to indicate the purpose of the transfer. The customer's bank transfers the funds to the business' bank. The business receives the funds into their account, noting the reference code.

Bank transfers are considered one of the safest ways to transfer money between two parties, but there are still some risks to be aware of. Transferring money via bank transfer is the most common way to transfer money, and many people do it without thought.

Like wire transfers, money transfers don't transport any physical money but transmit financial information between the relevant parties. But as we said above, money transfers don't go through banks (though), and they use their own communication systems instead of using the SWIFT system.

To make a wire transfer, you'll need the recipient's name and address and their bank account and routing numbers. Call, visit or go online with your bank or a trusted wire-transfer company.

The safest way to transfer money to someone is to use a direct wire transfer between banks or a payment app with security features. Beware of scams with either method since getting your money back is hard or may be impossible.

What is the safest way to do a bank transfer? ›

Wire Transfers

A wire transfer is another name for a bank-to-bank transfer. This is the most common way of making a transfer especially if the amount is large, or it is an international transfer. A wire transfer is a secure option as your bank or financial institution verifies that the funds are available to be sent.

If you have transferred money into someone's bank account but want it returned,you will have to ask them to pay it back to you. However if the payment resulted from a transaction paid via a credit card,or eBay or PayPal you can dispute the transaction and maybe get a refund.

Outgoing domestic: Generally between $15 and $30, this fee is charged to the sender. Incoming domestic: Generally between $0 and $15, this fee is charged to the recipient. Outgoing international: Generally between $35 and $50, this fee is charged to the sender for a transfer going to a non-U.S. bank.

Bank transfers are usually a very safe way to accept payment from customers, with less risk for businesses compared to credit card payments.

In most cases, yes, bank transfer times are instantaneous. However, banks will occasionally hold onto your funds for several days. There are a wide range of reasons that this could be the case, but it's most likely to happen to anomalous or especially large transactions.

Bank transfers are a quick and easy way to send or receive money, so many business owners use them in order to move funds between accounts, to pay taxes or to pay suppliers. Bank transfers are an alternative to paper checks or cash.

The sending bank sends a message to the recipient's bank with payment instructions through a secure system, such as Fedwire or SWIFT. The recipient's bank receives all the necessary information from the initiating bank and deposits its own reserve funds into the correct account.