How to send money to a bank account (2024)

From paying back a friend for a shared meal to contributing to a loved one’s medical expenses or sending money to family abroad, there are many reasons, large and small, for needing to transfer money between people.

According to the Consumer Financial Protection Bureau, about 85% of US consumers aged 18 to 29 have used payment apps to send money, such as Venmo, PayPal and Cash App. These apps are only one way to transfer money, and each method has advantages and drawbacks.

Overview of sending money to a bank account

Consumers have quite a few options for moving money between accounts. In addition to payment apps, you can use Automated Clearing House (ACH) payments and initiate wire transfers directly with your bank. In general, payment apps may offer the highest degree of convenience, but drawbacks include caps on how much you can transfer and how long it takes to transfer funds into a bank account.

ACH transfers, when available, may offer a convenient transfer method, especially for recurring transactions, and typically are not subject to additional fees. Wire transfers are typically the best method for large transfers, though they also tend to have the highest fees. For eligible transfers, Zelle may offer the convenience of payment apps but without delays or fees to get the money into your bank account quickly.

Understanding electronic and wire transfers

Banks and credit unions typically offer two major types of electronic payment transfers: ACH transfers and wire transfers. Additionally, banks and credit unions may also offer electronic payments via the Zelle or FedNow services.

ACH transfer

ACH transfers are typically offered by banks to their customers for little or no fee. These transfers are sent via the Automated Clearing House network and can clear quickly but may sometimes take several days to complete due to precautions against fraud and money laundering.

To initiate an ACH transfer, you’ll need the bank routing number, the account number and the name of the recipient. This method is how direct deposit paychecks are processed. It is also commonly used for transfers between accounts with the same owner at different banks, for example, if you hold checking and savings accounts at different banks and transfer between them.

Wire transfer

Wire transfers are where money is transferred electronically directly from a financial institution. Unlike an ACH payment, there is no intermediary network involved, and wire transfers are typically completed on the same business day but may take up to three business days to complete.

Since wire transfers don’t take the same precautions as ACH transfers, you should be especially diligent about potential scams. Wire transfers typically have a fee for each transfer that varies between financial institutions and based on the type of transfer. For example, banks may charge more for international wires than domestic ones. Using U.S. Bank as an example, fees for consumer wire transfers vary between $20 and $50 per transfer.

Consumers with banks that offer Zelle may have free access to electronic money transfers that are complete within minutes. Zelle is currently offered by more than 2,000 banks and credit unions. Daily and monthly limits on Zelle transfers, including dollar amounts and number of transactions, vary by financial institution.

FedNow is a service that the Federal Reserve offers to banks and credit unions that allows for payments that take seconds to move from one financial institution to another. For consumers at a bank or credit union that offers FedNow services, payments can be made practically instantly to recipients with accounts that also offer the FedNow service. Since the FedNow system is newer and voluntary, it is not nearly as widely available as Zelle, though there’s a growing list of FedNow service providers.

The role of mobile payment apps in sending money

Payment apps such as Venmo, PayPal and Cash App may be used to transfer money to a bank account, but typically, payments are immediately received in the payment app and then must be transferred to a bank account from there.

Venmo

Venmo advises users that free transfers to their bank accounts typically arrive within one to three business days. For a 1.75% fee (with a minimum charge of $0.25 and a maximum charge of $25), users with eligible accounts can also make an “Instant Bank Transfer,” which Venmo advises typically arrives within 30 minutes. These transfers only work with banks in the U.S. and Visa or Mastercard debit cards that participate in instant transfer services.

PayPal

PayPal also offers free standard transfers to bank accounts. These transfers typically take one business day to complete, but depend on the receiving bank’s clearing process, it may take three to five business days for the transfer to fully complete. PayPal also offers an “instant” option generally subject to a 1.75% fee (with a $0.25 minimum), though additional fees may apply for services such as currency conversion.

Cash App

Cash App offers a free standard transfer to bank accounts, which typically take one to three business days. The instant transfer option for debit cards is subject to a 0.5% to 1.75% fee.

Zelle

Unlike the other payment apps, Zelle was developed by a group of 30 major US banks. Rather than using a separate app, consumers with banks that support Zelle can enroll in their existing bank app or online banking platform. If your bank doesn’t offer Zelle, you can still use Zelle by downloading the mobile app and linking a Visa or Mastercard debit card.

The biggest advantage of Zelle over alternative payment apps is that funds are typically available in the recipient’s bank account within minutes with no additional fees. Zelle doesn’t charge any fees, but the banks who use Zelle may charge customers.

In-person options for transferring money

If you prefer to send money in person, several options are available, even if you don’t have a bank account. You will likely be able to initiate an ACH or wire transfer in person with the bank if you already have an account with a bank or credit union with brick-and-mortar locations.

If you don’t have a bank account or don’t have access to a physical branch, you can still transfer money in person via companies such as MoneyGram, Ria and Western Union. These companies may allow you to pay using various methods such as cash, credit card, debit card or bank account. Fees can vary significantly based on how the transfer is funded.

Exploring international money transfers

International money transfers may be accomplished in multiple ways. If the recipient has a bank account in the foreign country, you may be able to initiate an international wire transfer with your bank. Transfer times can vary, so you should consult your bank or credit union regarding the estimated time for the specific transfer.

Companies such as MoneyGram, Ria or Western Union also allow you to transfer money internationally and may allow the recipient to pick up the funds as cash. These services may be an attractive option in countries where the recipient doesn’t have a bank account.

“Always be aware of exchange rates,” said Jocarl G. Zaide, CPA and CFO of South Asialink Finance Corporation about transferring money internationally. “The foreign exchange market is volatile, and rates can fluctuate significantly. To get the best deal, compare rates from different services before making a transfer. Some banks and transfer services offer better rates for larger amounts, so it’s worth checking if consolidating your transfers could be more beneficial.”

Understanding money transfer rates

International money transfers come with multiple fees to consider. When transferring from the U.S. to other countries, you should consider:

• Exchange rates: the current rate at which the provider is converting U.S. dollars to the foreign currency
• Transfer fees: fees the provider charges to facilitate the transfer
• Transfer taxes: taxes that are applicable to the transfer

Exchange rates often serve as a hidden fee since providers may offer worse exchange rates than their competitors, so they net more profit on the transaction. Transfer fees also vary across providers and may be a flat fee or variable based on the amount being transferred. There may also be additional fees to expedite the transfer or for when the recipient picks up the money. State and local transfer taxes should be the same for all providers in the same area.

“Fees can vary widely between banks and other financial institutions,” said Zaide. “It’s not just the upfront fees you need to watch out for. Hidden charges in the exchange rate can also add up. Always ask for the total cost, including all fees and the exchange rate, to compare the true cost of your transfer.”

In the U.S., you have specific rights to information before and after you pay. Read the CFPB guide to sending money to another country to learn more about your rights and what you can expect from the process.

The cost, time and safety of different transfer methods

Transfer methods can differ dramatically between fees, how long a transfer takes and how secure the transfer is, so it’s imperative to consider all your options before committing to a specific transfer method.

For transfers that are both fast and cheap, your best options are likely FedNow and Zelle. FedNow and Zelle are only available within the U.S. and are subject to transfer limits set by the financial institution you use to access them. Domestic wire transfers are usually processed on the same business day they are initiated, but also typically come with fees that are generally not present with FedNow, Zelle or ACH transfers. International wires generally take longer to complete and come with greater fees.

The non-Zelle money payment apps generally allow instant transfers between wallets on the app. However, depositing those funds in bank accounts requires choosing between waiting one to five business days and paying fees to expedite the transfer. Funds in these payment apps may not qualify for FDIC or NCUA deposit insurance coverage that a U.S. bank account will generally provide.

While all the payment transfer methods available are generally considered safe, bad actors are always working to steal funds. The most important thing you can do is never send money to someone you don’t know. It’s very difficult, if not impossible, to recover funds accidentally transferred to the wrong party, so be especially cautious of any situations where someone is creating urgency to get you to initiate a transfer. Double or triple-checking you have the right beneficiary on the other end of the payment can save a lot of heartache.