Moving money from one bank to another is easy, especially with online banking. However, there are some nuances you should be aware of. Before you move money, make sure that your new account is set up for all automatic transactions and direct deposits. This includes any recurring bills you pay or paychecks you receive.
Bank drafts
A bank draft is a negotiable instrument that guarantees payment and is commonly used to pay for large purchases. It’s also more secure than a personal cheque, which can bounce because of insufficient funds. It also allows you to transfer money without the recipient’s banking information, which is helpful when dealing with a remote buyer.
A bank draft can be bought from a financial institution and is usually redeemed at the same bank that issued it. It’s like cash, and it can be lost or stolen if not kept in a safe place. However, if you change your mind about a purchase or realize that the seller is a scammer, it’s possible to cancel the draft by taking it back to the bank. You’ll need to show proof of identity and pay a fee for the service. A similar form of payment is a money order, which is redeemable at many banks. However, it may take several weeks to receive your money.
Money orders
Money orders are a great alternative to cash or personal checks when you need to send funds to someone. They’re also a convenient way to pay for items or services without giving out your personal bank account information. You can purchase money orders at post offices, grocery stores, Walmart and other locations. They cost less than a cashier’s check and are usually easier to buy, as you can pick them up while running errands.
To buy a money order, you’ll need cash and the name of the recipient. The teller will fill out the form and give you the money order. The money order is guaranteed for up to the amount specified on it, so it’s a safe way to make a payment. Money orders are also an alternative to sending cash through the mail, which can be risky and slow. They’re also a great choice for international transactions. They may take longer to arrive, but they’re generally a safe option for making international payments.
ACH transfers
ACH transfers are an easy and inexpensive way to move money between bank accounts. Trillions of dollars travel through the ACH network each year. They’re used for everything from direct deposit to paying bills online. The ACH system is managed by an organization called NACHA, or the National Automated Clearing House Association.
Unlike wire transfers, ACH payments are processed in batches three times a day. They are then sorted into deposits and payments by the ACH operator, which may be a federal reserve bank or a depository financial institution (known as an RDFI). Generally, the transfers are processed within one to three business days after being sent to an RDFI.
However, if the transaction is submitted before the daily cutoff time, it can be processed in real time. For example, Zelle, a mobile payment app, works directly with hundreds of banks and credit unions to allow same-day transfers for no extra cost. In 2022, Zelle ACH transactions grew 74%.
Wire transfers
A wire transfer is an electronic payment that moves funds from one bank account to another. It is used by businesses, individuals, and organizations to send money worldwide. It is also a popular way to pay bills and receive payroll or tax refunds. A wire transfer can be made at a bank or through online banking portals.
Unlike checks, a wire transfer is a direct and irreversible payment. However, it is not without risks. If you’re transferring a large amount of money, it’s important to check out the fees and processing timeframe before sending it.
Wire transfers are done through a network of banks and transfer agencies. A sender pays upfront at their bank and provides information about the recipient, including their name, bank receiving account number, and the amount to be transferred. The sender’s bank then transmits the information to the recipient’s bank via a secure system. The transaction is complete once the recipient’s bank receives the funds and deposits them into their account.