What Is an Online Bank Transfer?

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Before the Internet became popular and common in every household, many corporations transferred and wired money from one bank account to another. This process was typically easier then carrying large sums of money from one location to the other using physical currency. Also the recipient of the funds could have been in another state or country. Now, consumers and small business owners alike have the ability to transfer funds from either multiple accounts that they own or accounts owned by friends, family, merchants.

Definition

  • When performing an online bank transfer you must access your own online account. Determine the amount you would like to send to the recipient. Input their information and authorize the transaction. The entire process is done online. To ensure accuracy of an online bank transfer you must know the routing and the account number of the recipient. A routing number is a unique set of numbers that identifies a specific bank. The recipient should be able to either contact their bank directly to find out what their routing number is or look on their checkbook.

Timeframe

  • Online transfers can take as little as 24 hours to approximately 5 business days. The bank you are using and also the recipient's bank determines the length of time that it may take for a transaction to go through. Online transfers operates similar to a direct deposit. Most likely the recipient will see his or her funds in their account at midnight the following business day or sometime early the next morning. Some banks work strictly online, which may allow a quicker processing time in transferring money because they know you cannot go to a physical location to handle the same transaction.

Online banking

  • Online bank transfers can only occur when be customer has requested or applied for online banking. You are given a unique username and password typically by your own creation to access your account. Once accessed, you are able to select the account you would like to use to issue the transfer and input the details of the recipient. Most banks offer online banking free of charge as an added benefit for their customers. Online banking also allows you to connect any money management software like Quicken or Microsoft Money.

Benefits

  • Online transfers benefits customers as they do not have to waste time going into their physical bank to transfer money. They can pay a certain bills like their mortgage or car note using online bank transfers. Customers also save money by not having to purchase stamps or order new checks. Customers tend to get their payment to their intended recipient quicker by performing online transfers as opposed to waiting for the mail or other forms of payment to reach the recipient.

Warnings

  • When performing an online transfer it is essential that you verify the account and routing number before initiating a transfer. If either of these pieces of information is incorrect it will cause your money to go into another account and delay your intended recipient to receive the money. Also ensure you double check the amount you would like to send because if you send the wrong amount it may take a longer to get the balance corrected and the amount credited back into your account.

References

  • Photo Credit online image by Leticia Wilson from Fotolia.com
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