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 will allow you to know all the secrets to succeed in Podcasts.

What is a bank transfer?

Un bank transfer is an operation that allows money to be transferred from one bank account to another. It is one of the most common and secure means of payment, used by both individuals and companies.

The process is relatively simple: the originator (the one who sends the money) asks his bank to debit his account to credit the beneficiary's account. This request can be made via different channels: online on the bank's website or mobile application, directly at the counter of a bank branch, or by mail. To make a transfer, it is necessary to have the beneficiary's bank details, in particular their IBAN (International Bank Account Number) and sometimes their BIC (Bank Identifier Code).

There are several types of bank transfers. Occasional transfers are used for a one-off transfer, while standing orders are used to schedule regular payments on a fixed date, such as rent. SEPA (Single Euro Payments Area) transfers are used for transfers in euros within the European Union, while international transfers are used to send money to accounts outside the SEPA zone.

Processing times vary depending on the type of transfer. A SEPA transfer is usually completed within one business day, while an international transfer can take several days. Most transfers are free when made within the same bank or within the same SEPA area, but fees may apply for international transfers.

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 for how much money you can transfer at one time 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 transfer, your other bank account can receive these funds within a few 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. Generally speaking, 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 sends 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 each other's accounts using an international communications network called SWIFT. The SWIFT network (Society for Worldwide Interbank Financial Telecommunications) is a banking network serving global interbank exchanges. It has more than 7 connected institutions in 000 countries.

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

Bank transfers come in several distinct categories, each meeting specific money transfer needs. Occasional transfers, as the name suggests, are used for one-off money transfers. They are particularly suitable for one-off payments such as settling a large purchase or reimbursing a sum to a loved one.

Le permanent transfer, also called automatic transfer, allows you to schedule regular transfers on a fixed date. This type of transfer is ideal for recurring payments such as rent, electricity bills or monthly contributions. Once set up, it is executed automatically according to the defined frequency, until the payer decides to modify or stop it.

Le SEPA transfer (Single Euro Payments Area) is specific to euro transfers made within the European Economic Area. It includes the countries of the European Union as well as other countries such as Switzerland or Norway. This type of transfer is subject to European regulations that guarantee fast execution times and limited fees.

Le international transfer, also called SWIFT transfer, allows you to send money to accounts located outside the SEPA zone or in a currency other than the euro. This type of transfer generally involves longer delays and higher fees due to exchange rates and bank commissions applied by the different institutions involved in the transaction.

Le instant transfer, a recent innovation in the banking sector, allows money to be transferred in seconds, 24 hours a day, 24 days a week. Although this service is generally paid for and capped at a certain amount, it meets a growing need for speed in money transfers, particularly for emergency situations or commercial transactions requiring immediate confirmation.

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. Depending on the account agreement specific to each bank and each type of account, fees may be withheld depending on the origin of the order (ATM or Internet) and whether it is a foreign account. Generally, transfers via the Internet are free, unlike transfers ordered over 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 considered 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 frequency of 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?

To make a bank transfer, you must follow several very specific steps that guarantee the security and proper execution of the operation.

La first stage consists of logging into your online banking area or going to your bank branch. For an online transaction, you generally have to identify yourself with your personal identifiers and a security code, often sent by SMS. In the banking area, you then have to locate the section dedicated to transfers, often easily accessible from the main menu.

THEnext step requires the entry of beneficiary information. It is necessary to indicate the IBAN of the recipient account, which is a unique bank identification number. If the beneficiary has already received a transfer before, their details are usually saved in the beneficiary book, which makes the operation easier. For a new beneficiary, it will be necessary to enter all the bank details.

Then comes the entering the amount to be transferred and the reason for the transfer. The reason is not mandatory but it is recommended to provide it to facilitate the monitoring of transactions. It is also possible to choose the date of execution of the transfer: immediate or deferred. For a permanent transfer, it will be necessary to define the frequency of payments.

La last step is the validation of the transfer. It is crucial to check all the information entered before confirming the transaction. The bank generally requests a double validation, often via a code received by SMS or a validation on the mobile application, to guarantee the security of the transaction. Once the transfer is validated, a summary of the transaction is provided, which it is advisable to keep as proof.

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

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.

Remember to confirm that your transactions take place when they are supposed to. Before we leave you, here is some training that will help you master trading in just 1 hour. Click here to buy it.