What are Bank Transfers?
Bank transfers are a means of transferring funds from one account to another account electronically, without having to physically move money between accounts. Also known as a wire transfer, bank transfers a popular for:
Sending money on a one-off basis
Wiring money internationally
Paying for products and services online
Bank transfers are popular because they’re a universally available payment method for banks around the world, so you should be able to easily transferring money internationally around the globe provided your recipient also has a bank account. You should note that once initiated, bank transfers cannot usually be reversed.
How does a bank transfer work?
Depending on where you are in the world, bank transfers can be processed via a number of different networks. These include:
SWIFT network: SWIFT stands for the Society for Worldwide Interbank Financial Telecommunication. This network is a secure messaging system used by banks worldwide to send information to one another, including bank transfer instructions. Rather than directly sending funds, the SWIFT network sends payment orders from your bank to your recipient’s bank, often through a series of other agents. Despite what the name may suggest, SWIFT transfers may take several working days to be processed (especially if you are making an international bank transfer) and can involve fees from both the sending and receiving bank. To make a transfer on the SWIFT network, you might be asked to provide a SWIFT/BIC code which you can find using our calculator. For example if you're sending money to Mexico, you will need the correct SWIFT code for the Mexican bank.
ACH: ACH stands for Automated Clearing House, and refers to an electronic movement of funds from one account to another. This payment method is one of the most popular US payment systems and is commonly used for domestic bank transfers, bill payments, and direct deposits. ACH transfers will usually take several working days to be processed.
Bacs: A Bacs payment is one of the most popular bank-to-bank transfer methods in the UK. Bacs was formerly known for Bankers Automated Clearing Services and are operated by the 16 major UK banks. Direct debits are the most popular use for this payment method.
CHAPS: CHAPS stands for Clearing House Automated Payment System, and is a high-value bank-to-bank transfer system used for larger sums in place of Bacs payments in the UK. CHAPS payments are usually paid on the same day, but also, therefore, will usually have higher fees.
How can I make a bank transfer?
There are several ways you can send money with a bank transfer, and each will slightly change how a bank transfer actually works and the transfer fees (for example, based on the Bank of America Exchange rates and fees, it charges $45 for an international wire transfer). What's more, the way you make a bank transfer can affect how long your bank transfer takes, the fees incurred, and if you are sending money internationally, the exchange rate for your transfer. As an example, if you would like to send money abroad from Canada using CIBC bank you may be charged a margin of 2 – 5% for foreign exchange rates.
With your bank
You can elect to make a bank transfer with your bank. This is a convenient and easy way of sending money, although international bank transfer can take longer and have higher fees than some alternative methods. Our guide to wire transfer fees breakdowns the charges you might expect when sending money domestically and abroad. Also, you can check these fees by checking out some of our bank guides such as the Bangkok Bank foreign exchange rates and Chase Bank Exchange rates.
If you're making a domestic transfer, check out our guide on free wire transfers to avoid paying unnecessary fees.
To make a bank transfer will your bank, you will usually need to have a few details to hand, including:
Your recipient's name
Their bank account number
Their sort code
With a transfer provider
A transfer provider is another popular choice for making a bank transfer to send your money internationally. Some of the benefits of using a transfer provider for your bank transfer include:
Lower fees compared to banks
More favourable exchange rates
Faster transfer times
You can learn more about the wire transfer times in our guide covering how long does a wire transfer take.
An additional benefit to transfer providers is that you have a wider range of payment and delivery options. For example, you can pay by bank transfer and have your funds delivered to your recipient via:
Bank account
Cash
Mobile airtime top-up
Mobile eWallet
Alternatively, you could have your transfer paid into your recipient’s bank account but pay for the transfer by credit/debit card or cash. These options can all vary depending on the provider you go with, however, so make sure you’ve checked your payment options before locking in your transfer.
Making a bank transfer with WorldRemit
WorldRemit is one of our top recommendations for sending money internationally. Known for low fees and fast transfer times, WorldRemit covers over 150 countries and 90 currencies with options to sending bank-to-bank transfers, all well as a range of other payment and payout options.
One big selling point of WorldRemit is that 90% of transfers are authorised in minutes, making it a great option for sending fast bank transfers compared to using a traditional bank.
Read about WorldRemitWhether you are making a bank transfer with your bank or with a specialist transfer operator, the steps remain fairly similar:
First, you’ll navigate to the bank transfer section of your online banking or log-in to your money transfer provider account
Enter your recipient’s name, bank details, and any other information required to make your transfer (for example, the currency you are converting to, the date the transfer needs to be made, the sum you are sending)
Check any fees that may be associated with your bank transfer and confirm you are happy with them
Initiate your transfer
Depending on the circumstances of your transfer, your funds could be received within minutes or up to several working days.
What are the main advantages and disadvantages of bank transfers?
Pros
Cons
Alternatives to bank transfers
If you don’t want to make a bank transfer, you do have a few other options for sending money:
Paying by card
Paying to transfer money by debit card can have lower fees than a bank transfer and a faster transfer time, so this is a good option to consider. However, paying by credit card may come with more expensive fees.
Cash pickups
Instead of a bank-to-bank transfer which can take longer to be processed, you can opt for your recipient to receive your transfer of funds as a cash pickup. This is often a much faster way of getting money urgently to your recipient. A good option for cash pickups is WorldRemit.
Mobile eWallets
Another option is to have your transfer delivered to a mobile eWallet which can be sent up through your chosen money transfer provider if both parties have an account. This method usually supports faster transfer times and is easy to use.
How long will a bank transfer take?
Some bank transfers can be processed instantly, especially if you are sending a smaller sum within the same country. Equally, some international bank transfers are capable of being processed within minutes, but we’d recommend checking your transfer provider can facilitate this first as timings can vary depending on the provider and where you are sending money to.
On average, bank transfers will take anywhere between being delivered on the same day up to 3 working days.
Bottom line: how does a bank transfer work?
Bank transfers are an excellent way to transfer money electronically, without physically having to handle cash yourself. This type of transfer is great for a range of uses, from businesses paying vendors and employees to migrants and expats looking to send money back home to family abroad. Hoever, bank transfers come with some fees and you always have to check the foreign currency exchange rates. If you would like to learn more about bank fees and exchange rates when making an international money transfer using a bank, you can check the following guides depending on the bank you would like to use and where you are sending money from:
If you're looking to make a bank transfer, we'd always recommend comparing providers to find the best option for you in terms of cost, transfer time, exchange rates and reliability. Use our comparison tool to find the right operator for your transfer needs.
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