This article describes the best way to transfer money between banks for people or businesses who keep their cash in bank accounts at separate banks.
There are many different reasons to keep your money in separate banks. There are products and account features available from large banks, like Chase, that are simply not available at smaller local banks, which often don’t have the budget for
Regardless of your reason for having two separate banks for your personal or business use, I’m going to show you the best, most convenient way to transfer money between banks. I’ll also show you a few alternatives that work almost as well, but that may have fees associated with them or other reasons why they are slightly less common bank transfer mechanisms.
A Warning About Transfer Limits: One thing to keep in mind when transferring money between accounts at different banks is that many banks, credit unions, etc. have daily limits on how much can be transferred from them. If you are planning to transfer a large amount (anything over a few thousand dollars), it’s highly recommended that you plan ahead so that you don’t run into an issue if timing of the transfer is important.
Connect an External Bank Account
The best way to transfer your money between banks is to simply connect the two bank accounts you want to transfer between so that you can do an EFT.
Most banks, especially the larger banks, have an online account management system that allows you to login and connect external accounts (external meaning that the account exists at a different bank) that are then treated similar to accounts that are set up within the same bank. After you’ve set up an external bank account, you can transfer money from that account into the account at the bank from which you have set up the external account.
For instance, the image below is from the Chase Bank online management tool. Here I’m on the “Schedule transfer” page. On this page, you can see in the “Transfer from” list all of the bank accounts that you have associated with your Chase bank profile. Many people have both a checking and a savings account. Chase (as do most other banks) allows you to transfer money between those accounts.
Below the “Transfer from” account list, Chase Bank has a prompt that allows you to “Add an external checking or savings account”. If you click on that link, you are able to connect another bank account to your Chase profile, after which you can then simply choose the new account in the “Transfer from” list (if you want to transfer money to your Chase account from the external account), enter the amount to transfer, then confirm the transaction.
Once you’ve added an external bank account to your Chase profile, you can also transfer from that account into your Chase account. A similar process exists with other banks that have robust online account services.
How to Set Connect An External Account
Connecting an external bank account is usually pretty simple, and can be done in one of a couple ways.
Sign In To Your External Account
If the bank at which your external account exists is set up to allow other banks to create a secure connection, you can simply search for and choose your bank, then login using your online account credentials and automatically create the connection.
Adding an external account this way can typically only be done for larger banks. Small, local banks are most often not part of the secure connection system. If the external account you want to connect is with a small bank, you’ll likely need to do it manually.
You can see in the image below, if I choose to add an external account that is set up with Bank of America, I can sign in to that account from Chase and connect the two accounts.
Manually Add External Account Using Bank Routing Number and Account Number
If the external account you want to use is with a small bank, you’ll need to connect your account manually.
To connect your external account manually, you’ll need to enter two pieces of information:
- The bank’s routing number
- Your specific account number
Bank transfers from external accounts and to external accounts typically take 1-3 business days to complete. Although this method of transferring money between accounts at separate banks is easy and convenient, if you need to have the money transferred more quickly, you’d want to use one of the other bank to bank transfer methods, likely a wire transfer.
Another good way to transfer money between banks is to use a wire transfer.
If it’s completed by the daily wire transfer cutoff time (which is normally some time before 5pm Eastern Time), a wire transfer is typically delivered the same day. If you need to have money transferred from one bank to another so that it’s available immediately, the wire transfer method would be the best way to transfer money between banks.
Wire transfers can be done online if you bank with one of the large banks that has robust online account services.
If your bank does not have an online option for doing a wire transfer, you can usually go into a bank branch and fill out the paperwork to do a wire transfer, or you can sometimes call in the wire transfer.
Wire transfers usually involve a fee, normally between $15 and $40. However, there are business accounts (I have one with Chase) you can set up that have the benefit of waiving wire transfer fees.
Other Methods of Transferring Money Between Bank Accounts
There are lots of other ways to transfer money from one bank account to another, but the two listed above are the best ways to move money between accounts at different banking institutions.
- Cash or Cashier’s Check: It it’s reasonable for you logistically, you can go to the bank that you want to transfer from, withdraw the money you want to transfer, then go and deposit it into your account at the other bank.
- Personal check: You can write a personal check to yourself from the bank you want to transfer from and deposit the check at the bank you want the money transferred to. In this case, the money you deposit will likely not be available until after the check has cleared the account that the check is written from.
- Other electronic transfers: If you wanted to be creative, you could use services like Venmo, PayPal, Zelle, and others to connect your bank accounts, and use those apps to make the transfer.