Moving money between different banks is something many people do without thinking twice — paying a friend back, sending money to a family member, or moving savings to another account. These transactions are called external transfers, and while they’re common, it’s important to understand how they work, how long they take, and what risks to watch out for.
This guide breaks down external transfers in plain English, so even if you’re brand new to banking, you’ll feel confident using them.
What Is an External Transfer?
An external transfer happens when money is sent from an account at one bank to an account at a different bank. This could be:
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Moving money from your checking account at Bank A to your savings account at Bank B
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Sending money to a friend who uses a different bank
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Paying a bill or transferring funds to another person or business
The key difference is that the money is leaving your bank and going to another financial institution.
Why People Use External Transfers
External transfers are widely used for everyday financial needs, such as:
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Splitting rent or utility bills with roommates
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Sending money to family members
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Moving money between personal accounts
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Making certain types of bill payments
Some businesses may also request payment through an external transfer, but this is where caution is important. Once an external transfer is sent, it can be difficult — or impossible — to reverse.
Real-life example:
If a stranger selling concert tickets online asks you to send payment via bank transfer, that’s a red flag. Unlike credit cards, external transfers usually don’t offer strong fraud protection.
How External Transfers Work
Most banks make external transfers easy to set up through:
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Online banking websites
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Mobile banking apps
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Phone banking
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In-branch visits
To send money, you’ll typically need:
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Your account number
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The receiving bank’s routing number
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The recipient’s account number
Once entered, many banks save this information so you don’t need to re-enter it next time. Some banks may also verify the external account before allowing transfers.
Common Limits and Fees to Know About
Banks often place restrictions on external transfers for security reasons. These limits may include:
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A maximum amount per transfer
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Daily or monthly transfer caps
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Limits on the number of transfers allowed
For example, a bank might allow:
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Up to $5,000 per transfer
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No more than $10,000 per day
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A set number of transfers per month
Some banks offer external transfers for free, while others may charge a small fee per transaction. Transfers between accounts at the same bank are usually free.
Types of External Transfers
Not all external transfers work the same way. The speed and method depend on the type of transfer used.
Electronic Funds Transfers (EFTs)
An EFT is a broad category that includes many types of electronic payments. You probably use EFTs all the time without realizing it — debit card purchases, direct deposits, and even some checks are processed electronically.
EFTs often begin almost instantly, though banks may take a day or two to fully process and settle the transaction behind the scenes.
ACH Transfers: The Most Common Option
ACH transfers (Automated Clearing House transfers) are one of the most popular ways to move money between banks in the U.S.
Here’s how they work:
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Transfers are grouped and processed in batches
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Funds usually arrive within 1 to 4 business days
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Large banks may process them faster than smaller ones
ACH transfers are commonly used for:
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Paychecks
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Monthly bills
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Scheduled transfers between accounts
Many banks allow you to schedule ACH transfers ahead of time, which is helpful for recurring payments like rent or savings contributions.
Wire Transfers (Mostly for International Payments)
If you need to send money internationally, a wire transfer is usually required. These transfers move money quickly through specialized banking networks and are often completed the same day.
However, wire transfers:
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Often come with higher fees
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Carry greater risk if sent to the wrong recipient
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Have limited options for cancellation
Always double-check recipient details before sending a wire transfer.
Setting Up Recurring External Transfers
Many banks let you automate external transfers by setting up a recurring payment or “standing transfer.” This is useful if you regularly move money between banks or want to build savings automatically.
Example:
You could set up a monthly transfer of $200 from your checking account at one bank to a high-yield savings account at another bank.
Frequently Asked Questions
How long do external transfers take?
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EFTs often start immediately but may take up to a few days to settle
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ACH transfers usually take 1–4 business days
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Timing can depend on bank processing cutoffs and weekends
Do all banks allow external transfers?
Most banks do. You may need to link and verify an external account before sending or receiving money.
Are there transfer limits?
Yes. Limits vary by bank and may apply per transaction, per day, or per month.
The Bottom Line
External transfers are a convenient and widely used way to move money between banks. They’re easy to set up, flexible, and helpful for managing personal finances. However, they come with fewer protections than credit cards or payment apps, so it’s important to only send money to people or businesses you trust.
When used carefully, external transfers can be a powerful tool for staying organized, paying bills, and reaching your financial goals.
