Online money transfers are becoming faster and easier as electronic banking becomes more of the norm for the industry. You can transfer between accounts within the same bank or between two accounts at different banks, or you can send money through an intermediary service and allow a second person to complete the transfer. These services are often free; some provide instant transfers.
Transfer Within the Same Bank
Move Money Between Banks
Use Third-Party Intermediaries
If your online banking services do not permit you to send funds directly to another bank account, a third-party intermediary service such as PayPal can help you accomplish the transfer. You simply set up a PayPal account, verify your identity and link your bank account information to your PayPal account. Money can be transferred among multiple accounts using this service. The person you are sending money to must also have a PayPal account. Transfers between friends and family members are free in most cases.
Make Anonymous Transfers
Transferring money from one bank account to another anonymously also typically requires a third-party service. This can require a bit more effort, such as setting up a virtual wallet with a third-party service, linking your bank account and funding the wallet with digital currency. Digital currency is a medium of exchange used on the Internet. Although it holds value in the virtual world, it has no physical presence. Bitcoin is a prominent form of digital currency used internationally.
When sending anonymous transfer with digital currency, the receiver needs access to a virtual wallet to convert the digital currency into a money transfer to a second account. However, the value of digital currency is not always tied to real-world money, and the value is not always consistent in a real-world conversion, sometimes being valued more and sometimes less than its physical counterpart, depending on exchange rates in the current market.
In recent years, digital currency has been tied to several money-laundering schemes, and the U.S. Treasury Department, the Internal Revenue Service and the U.S. Securities and Exchange Commission have issued guidelines on how this type of transfer should be monitored. For example, the IRS now treats virtual currency as taxable property. When making anonymous transfers from one bank account to another using virtual currency, federal regulations apply, and the penalties for money laundering can be severe.
Consider Casual Transfers
For casual transfers between friends, mobile apps available on smart phones and Android devices allow instant transfers. One company that offers these services is Venmo, purchased by Braintree in 2012, which was in turn purchased by PayPal. Using Venmo to transfer funds from your bank account to a friend's account is free. Transactions from your virtual Venmo wallet are instant; transfers from the wallet to bank accounts can take one business day, according to the company's website.
Check the BBB
Before using unfamiliar online money transfer services, check with the Better Business Bureau (BBB) to see the company's report card. The BBB handles consumers’ complaints both for companies that choose to become accredited through the BBB and those that do not, but are reported to the agency by consumers.
- Bank of America: Electronic Funds Transfer FAQs
- Businessweek: Cash is for Losers!
- Coinbase: What Is Bitcoin?
- U.S. Bank: Zelle Person-to-Person Payments in the U.S. Bank Mobile App
- Venmo: Make and Share Payments
- Forbes: New York's Financial Regulator, Benjamin Lawsky, Maintains Lead On Bitcoin Regulation
- Internal Revenue Service: Notice 2014-21
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Vicki A Benge began writing professionally in 1984 as a newspaper reporter. A small-business owner since 1999, Benge has worked as a licensed insurance agent and has more than 20 years experience in income tax preparation for businesses and individuals. Her business and finance articles can be found on the websites of "The Arizona Republic," "Houston Chronicle," The Motley Fool, "San Francisco Chronicle," and Zacks, among others.