What is a bank transfer?

A bank transfere is a general term used to describe the transfer of funds from one bank account to another. Whether at national or international level. Bank-to-bank transfers allow consumers to transfer money electronically. It's here digitalization of the banking sector.

More specifically, they allow you to transfer money from an account with a bank to an account with another institution. If you've never used this service before, it may seem a little confusing.

If you need help understanding how it works, here's what you need to know about bank transfers. But before you start, here is a premium training that will allows you to know all the secrets to succeed in the Podcast.

🥀 Basic principles transfers

Most top banks make it easy for their customers to transfer funds. Although this service is often free, it is best to confirm this before initiating a transfer.

The rules regarding the amount of money you can transfer at once may vary depending on your bank. But in general, anyone who wants to transfer funds can do so through their computer or mobile device. Once you initiate a wire transfer, your other bank account can receive those funds within days.

Keep in mind that bank-to-bank transfers only allow people to exchange funds between their checking accounts personal and their savings accounts. If you want to send money to another person, you need to find out if your bank offers this service.

Bank transfers can mean slightly different things depending on a wide variety of other factors. Broadly, the term can be used to refer to one of two distinct things:

• A national money transfer, where funds are sent from one bank account to another in the same country;
• An international money transfer sending funds from one bank account to another in a different country, usually involving a currency exchange.

🥀 Bank transfers: international vs. national

Domestic bank transfers go by several names. In the United States, for example, these types of transfers are essentially synonymous with ACH transfers, while in the United Kingdom they are known as CHAPS transfers.

Within the EU, bank transfers are called SEPA payments, while in Canada they are called Interac e-Transfers. Domestic bank transfers are characterized by banks using a national communications network to send funds from one local bank account to another.

In the case of international transfers, on the other hand, bank transfers are generally synonymous with wire transfers. In this case, banks around the world send money to their accounts using an international communication network called SWIFT.

The SWIFT (Society for Worldwide Interbank Financial Telecommunications) network is a banking network used for global interbank exchanges. It has more than 7 institutions connected in 000 countries.

🥀 What is an ACH payment?

ACH payments are funds that are routed through the Automated Clearing House (ACH). A clearing house in the USA functions as a sort of " intermediate » between banks by transferring money electronically from one bank to another bank.

When you transfer money from your bank via an ACH payment, many transfers are grouped together at specific times of the day and sent in batches.

Examples of similar payment networks abroad are the EU's SEPA (Single Euro Payments Area), CHAPS (Clearing House Automated Payments System) from the United Kingdom and direct entry into Australia.

🥀 Types of bank transfer

There are generally two types of transfers: one-off transfers and permanent transfers.

Punctual transfer

A transfer is deemed to be one-off if the order is issued for a single transaction. In most cases, if it is carried out online from the bank's internet platform, this service is free. If it is requested in branch, by fax or by telephone, it may be invoiced (for example up to 4 €).

In the event that the beneficiary's bank details are incorrect or incomplete, additional costs may be added.

Permanent transfer

A transfer is said to be permanent (or automatic) if the order is given to the bank to repeat it several times at regular intervals. This order can be programmed for a fixed or indefinite period. It can be canceled at any time provided you notify your bank by mail with AR.

When done online, standing orders are usually free. If they are set up or modified in-branch, a fee (for example 1 €) can be claimed when setting up the service. International transfers are chargeable.

Most often the bank retains a percentage of the transfer (for example 0,08% of the amount). Exchange and port commissions (SWIFT fees) can also increase the bill.

🥀 The hidden costs of bank transfers

Generally speaking, domestic bank transfers are relatively cheap to send and can even sometimes be free. Fees, if any, are always taken from the debtor's account.

According to the account agreement specific to each bank and each type of account, fees may be withheld depending on the source of the order (counter or Internet) and whether it is an account abroad. Generally, transfers via the Internet are free, unlike transfers ordered at the counter, which are subject to a commission.

International bank transfers, on the other hand, are where money transfers become expensive. This is because when you transfer abroad with a bank, you will pay hidden fees (called foreign exchange margin) to convert your currency to another currency in addition to all the standard fixed fees, commissions and others.

At the extremes, many people pay total fees ranging up to 10 to 15% or more of the total amount of their transfer in order to send money overseas, which often makes the process extremely expensive.

Luckily, there are plenty of low-cost currency exchange and fintech providers out there. These providers use a savvy network of international bank accounts to completely bypass the SWIFT network, avoiding almost all fees for their customers! As a result, users often pay less than 1 or 2% of the amount of their transfer in fees!

🥀 ACH Transfer Vs Bank Transfers

Although ACH transfers from banks are usually cheaper than wire transfers, they still take a bit longer to arrive. Usually two to three days. This is because the batch processing system means that transfers have to wait for a specific time slot until the money is transferred along with the other transactions.

Bank transfers, on the other hand, always require fees that generally fluctuate between 25 and 40 € for transfers from US accounts. However, these transfers are relatively quick and usually take up to 24 hours.

🥀 Bank transfers and transaction dates

La date of operation est that at which a debit or credit transaction is recorded by a bank. If the transfer order is ordered at a time slot close to the end of the business day, it will be considered received the following business day.

If the time of receipt is not a working day, the transfer order is deemed to have been received on the following working day. The execution of each payment transaction is notified to the holders of the two accounts concerned (debtor/creditor). The periodicity of the notifications depends on the account agreement. It can be daily, monthly, etc.

It is possible to dispute a transfer operation by sending a letter to his bank with AR. Several scenarios are possible:

• if the amount of the transfer is higher than requested, the debtor has a 8 week lead time;
• if the operation was not authorized or was incorrectly executed, this period is extended to 13 months after the debit date before foreclosure.

🥀 How to make a bank transfer?

Before making a bank transfer, you must ensure that you have sufficient credit in your account. Otherwise, you expose yourself to a rejection (and therefore to the related costs). You must also have the RIB of your creditor with his BIC (Bank Identifier Code). He determines where his bank and his IBAN are domiciled (International Banking Account Number) that identifies their bank account.

Whether at the counter or online, you must complete a transfer order. This order indicates your account number, the amount to be transferred, the execution date and the bank details of your creditor. The bank is prohibited from making a transfer without your consent unless ordered by the Public Treasury.

🥀 Important points

In order to transfer money between bank accounts, you may need to link your two accounts. Sometimes it can take up to a week.

If you need to transfer money to your account at another bank, it's best to avoid waiting until the last minute to get started. If the timing is a problem, you may be able to speed up your transfer. But it can cost you dearly.

Some banks allow customers to set up their accounts for recurring transfers. So if you automate your finances and periodically transfer money between accounts at different banks, setting up this feature could save you time.

🥀 FAQ Here is an example of a bank transfer FAQ

What is a bank transfer?

A bank transfer is an operation for transferring money between two bank accounts. It's a quick and easy way to send or receive funds.

How to make a transfer?

All you need to do is provide your bank with the recipient's IBAN account number and name. You then indicate the amount to transfer. The operation is secure and almost instantaneous.

Is a transfer chargeable?

Most transfers between individuals are free within the euro zone. However, fees may apply for transfers abroad or with specific conditions.

Can I cancel a transfer?

You can cancel a transfer before its final execution. But once the transfer is effective, it is no longer possible to go back. The refund request will then depend on the recipient.

Are transfers traceable?

Yes, each transfer made is recorded by the banks. The sender and recipient are known. This helps combat fraud and money laundering.

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