The Safest Ways to Transfer Money

There are plenty of ways to transfer money. However, the safest way to do so depends on the situation. For example, paying a vendor at a market with cash can be smart. But you certainly shouldn’t put a lot of cash in an envelope and mail it to pay a bill. 

That’s why it’s important to be aware of the various options for transferring money between accounts you own or to other people and businesses. It’s important to understand how each method works, as well as its pros and cons, before choosing how you want to transfer money. You might find that there are safer, faster or cheaper ways than a traditional method you have come to rely on. 

Transfer online from one account to another

One of the easiest and safest ways to transfer money to another account is through an electronic funds transfer. For example, if you’re employed, your paycheck might be deposited into your bank account through an electronic funds transfer. All government benefit payments, such as Social Security, are now paid through EFT direct deposits. And many companies allow bills to be paid electronically, which is safer than sending checks that can get lost in the mail.

If you have set up online access to your financial accounts, you can transfer money instantly from one account to another at the same institution (for example, from your checking account to your savings account at the same bank). To do this, simply log onto your account and select the option to make an internal transfer between your accounts. 

To make an external transfer to an account you have with another institution, you’ll likely need to go through a few more steps to link those accounts. You’ll have to enter the account and routing numbers for the external account. Some financial institutions will send a small test transfer of a few cents that you must verify when linking to an external account. Depending on the financial institution, there also might be a fee to transfer funds electronically to external accounts, and there might be limits on the number and dollar amount of transfers. 

Many banks and credit unions also offer the option to set up recurring online bill payments. Or you might be able to set up electronic bill payments through your service providers. However, this sort of electronic funds transfer isn’t typically an option for transferring funds to other individuals. You would have to have access to their accounts to move funds into them.

Pros: Fast, easy and secure

Cons: Some financial institutions charge fees for external transfers; not a practical option for transfering money to other individuals’ accounts

Write a personal check

Writing a check is a relatively easy way to transfer money between accounts you own, to someone else or to pay bills. And it can create a paper trail of payments, which can come in handy in certain situations. 

However, it’s not as fast as transferring funds electronically because it can take a few days for checks to clear. Plus, there can be costs associated with checks. Not all financial institutions provide their customers with checks free of charge. And if you write a check for more than the balance of funds in your account, the check may bounce. You might be charged a fee by the company you wrote a check to and a nonsufficient funds fee by your bank.

Sending checks to make payments to individuals or businesses is certainly safer than sending cash. However, it’s not risk-free. Checks can get lost in the mail or even stolen out of mailboxes by thieves, who can change the names of payees and the amounts. 

Pros: Safer than cash payments; provides proof of payment

Cons: Processing takes longer; some financial institutions charge a fee to order checks; amounts and recipients can be altered by thieves

Get a cashier’s check

Rather than writing a personal check to transfer funds, you could get a cashier’s check from your bank or credit union. You must pay for a cashier’s check upfront, and the financial institution guarantees it. So, it’s safer for the recipient because it won’t bounce, and only the designated payee can cash it. In fact, sometimes a cashier’s check is required for large transactions, such as a down payment on a home.

Cashier’s checks also are safer for the person paying with them because they don’t have any personal information on them, such as an address or account number. However, they’re not as convenient as personal checks or online transfers because you have to visit your bank or credit union to purchase one. Also, financial institutions typically charge a $10 to $15 fee for issuing cashier’s checks. 

Pros: Safe for senders and recipients

Cons: Fees to purchase; more time consuming than other transfer methods

Send a money order

Like a cashier’s check, a money order is an alternative to a personal check. However, it can be purchased at a wider range of locations, including banks, credit unions, supermarkets, convenience stores and U.S. Post Office locations. Plus, the fees for money orders tend to be lower—$1 to $5. But the maximum money order that can be purchased is $1,000. 

Because money orders are prepaid, they can’t bounce and clear almost immediately—which makes them safe for businesses that receive them. And they can be safer than personal checks for the people who use them because their address and account numbers don’t appear on them. 

However, there are money order scams. Be aware that if anyone pays you with a money order that is for more than the amount of the item or service you’re providing and asks you to return the difference through some other form of payment, it’s a scam. In these situations, the money orders that are sent are fake.

Pros: Safe for senders and recipients

Cons: Fees to purchase; more time consuming than other transfer methods; can be associated with scams

Use a wire transfer

A wire transfer is another type of electronic funds transfer. It’s a good way to send money quickly and securely, especially large amounts of money or overseas transfers. It’s safe for the sender as long as you know the recipient. And it’s safe for the recipient because the funds are guaranteed (unlike a personal check, which can bounce).

However, sending a wire transfer isn’t as easy as writing a personal check. If you wire money from your bank account to another account, you must know the recipient’s full name, contact information and bank account details. Typically, you will have the option to initiate a wire transfer in person at a bank branch or through online banking. If you wire money through a wire service such as Western Union, you can transfer money from one bank account to another (which requires knowing the recipient’s account details) or you can send cash to a wire service location for pickup. Plus, banks and wire transfer services charge fees for wiring money. 

Also, be aware that scammers often ask people to make payments with wire transfers because there is no way for them to get their money back once it is wired. So, if you get a call or email from someone telling you that you need to wire money to make a payment, it’s likely a scam. No government agencies, businesses or legitimate telemarketers will pressure you to send money through a wire transfer.

Pros: Secure way to transfer large amounts or to send funds overseas

Cons: Fees; requires knowledge of recipient’s account information; can be associated with scams

Use a money-transfer app

It’s now fast and easy to transfer money electronically to people you know using a peer-to-peer payment app. Many banks and credit unions offer customers the option to download and use the Zelle app to digitally transfer money. All you need is the recipient’s phone number or email address to send money directly from your bank account. 

There also are services such as Venmo, PayPal and CashApp that you can link to your bank account, debit card or credit card to send money to friends, family and some merchants. Typically, the recipient must also have the app to receive payments. 

There can be fees, depending on the payment method you link to (fees are more likely to be charged for credit card transactions). Although the services are secure, it’s important to use them to send money only to people you know (and to confirm you’re sending it to the right person).  That’s because you typically can’t cancel payments once they’ve been sent. Only in some instances can you stop a payment if you sent it to a phone number or email that hasn’t been registered with the service.

Scammers know this, which is why they often ask for payments to be made through peer-to-peer payment apps. To avoid being scammed, you should never use a payment app to make a payment to someone you don’t know. 

Pros: Fast, easy way to send money to people you know; can be a free way to transfer funds

Cons: Fees can be attached to transfers made with credit cards; payments typically can’t be canceled; can be associated with scams

Find Out: Can You Get Your Money Back From Payment App Scams? ‍

Bottom line

The safest way to transfer money depends on whether you’re moving money between accounts you own or to others. It also depends on how fast the money needs to be transferred and available to the recipient, whether you’re willing to pay fees and your comfort level with technology. If you’re not sure which option is best for you, talk with a representative at your bank or credit union for help.

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