What’s a bank transfer? How they work and how to make one
There are different options for sending and receiving money—each with their own pros and cons. In this article, get an overview of what a bank transfer is and how to make one yourself.
4 min read
Transferring money from your bank to another person or entity is pretty straightforward, but there are a few things you need to know—including how to perform one and how long the different types take. Which is why we’re here to iron out the details for you so that you can make seamless transfers without putting too much thought into it. Ready? Let’s get started.
Banking basics
Banking jargon can be confusing—but it doesn't have to be. Find simple explanations to popular banking terms.
Simply put, bank transfers are a fast, free payment method that allow you to send money between accounts or banks.If you hold two different bank accounts within the same bank, then you can transfer funds between the two accounts. But bank transfers also let you transfer money to other people or companies. This is a great way to send money to friends and family, or to pay bills or invoices—all without ever having to withdraw cash.
How to make a bank transfer
When it comes to bank transfers, you have several options. Let’s take a look at each of them.
Digital bank transfers
Digital bank transfers are performed online—either through a mobile app or web browser. To make a digital bank transfer, simply log in to your online bank account. Then, you’ll need to enter the correct details of the recipient along with their account details. This method is considered quite safe, as the banks do the heavy lifting of transferring the money for you.
Bank transfers via phone
If digital transfers aren't your cup of tea, you can contact your bank via phone to make a bank transfer. A banking representative will then ask for certain details to verify your identity, along with the recipient’s account number, before initiating a transfer. However, it’s worth noting that (depending on the country) you’ll likely first need to register for phone banking in order to use the service.
Branch bank transfers
The final option is to head to your bank branch and request the transfer in-person. Here, you’ll likely need to fill in all the details about the beneficiary’s bank account on a paper form in order to transfer funds.
How long do bank transfers take?
Different money transfer methods have a variety of waiting times. However, if you want to transfer funds to a bank located in the same country as yours, the recipient should receive money within one business day—and some may be processed instantly. International money transfers, on the other hand, normally take 4-5 business days.
Wire transfers vs. bank transfers
Wire and bank transfers are both excellent ways to send money. However, a wire transfer is different from a bank transfer. In a wire transfer, the role of the sender's bank is more of an intermediary. Meanwhile, a bank is directly involved in a bank transfer, as the name suggests.You can use wire transfers to send funds internationally, whereas bank transfers are ideal for domestic payments. In order to make international payments via your bank, you would first need to set up a bank transfer by using the same SWIFT network that wire transfers depend on. In a wire transfer, the sender's bank sends information to the recipient's bank before transferring the money to the recipient's account. In contrast, with bank transfers, the bank sends money directly to another account.
Wire transfers vs. bank transfers
Bank transfers
Wire transfers
Duration
Up to 5 days
Same day
Cost
Affordable
Expensive
Security
Less risky
More risky
Used for
Direct deposits and recurring payments
Urgent cash transfers and one-off expenses
Reach
Mainly domestic
Global
What’s the best option for you?
The decision about which option is better for you depends on the types of business you conduct. For instant payments, a wire transfer is often the best option. However, they are also usually more expensive, and although wire transfers might be quicker, bank transfers are more secure. At the end of the day, it’s about what works best for you and your needs.
Money transfers with N26
Want to transfer funds seamlessly? We’re guessing that’s a yes. Then try SEPA Direct Debit! With N26, you can collect direct debit payments from consumers in euros via SEPA transfers. And as a 100% mobile bank, N26 lets you send money within and across member countries with just a couple of taps. Open your free bank account today and discover more smart features for managing your money.
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