If you're like most people, you have multiple bank accounts: a checking account for your routine expenses, a savings account for your emergency fund, a high-yield savings account to grow your money, a joint checking account to share with your spouse… the list can go on and on.

With so many accounts to manage, you'll likely have to shuffle money between them quite often. There may be times when you need to transfer money to other people, such as paying rent to a landlord or reimbursing a friend for an Uber ride.

There are several ways to move money around. The best way to transfer money depends on how much time you have, the transfer amount, and how much you’re willing to spend on it.

Considerations when transferring funds to an external account

When deciding the best way to transfer money between banks, the following factors should be top of mind.

Fees

Fees vary significantly between transfer methods. If cost is your primary concern, writing a check or an electronic funds transfer (ACH) is likely the best choice, as these methods are usually free.

Speed

Some transfer methods can take several days to complete. If you need to transfer money quickly, a wire transfer or peer-to-peer payment app will be the speediest option.

Security and convenience

When transferring money, there is some risk of scams or fraudulent activity. ACH transfers and wire transfers tend to be the safest ways to move money between accounts.

These three factors will influence the type of transfer method needed.

5 ways to transfer money across different banks

There are five types of transfers offered by banks, credit unions, and other financial institutions:

• Check

• Electronic funds transfer (or ACH)

• Peer-to-peer transfer

• Wire transfer

• Third-party services

Each will have its pros and cons, which will help you pick the transfer method needed. For example, you don’t want to spend money on a wire transfer when a simple paper check, often free, will do just fine.

Let’s further break down each of these transfer options.

1. Checks

Checks are the most traditional way to transfer money. Whether you need to pay your utility bill or want to send a gift for a friend's wedding, writing a check can be a simple way to transfer money.

Benefits

• Typically free: Some checking accounts charge monthly fees, but free checking options are available. If you have an existing checking account, writing a check is free.

• Provides a paper trail: Writing a check also provides a paper trail; when the check is cashed, you can see the transaction on your bank statement, and the bank will have a record of the transaction if you need to prove it happened later.

• Technology not required: The recipient doesn't need to have a smartphone with a banking app or money transfer app to cash a check; they can deposit the check at their bank in person or through a check processor.

Drawbacks

• Checks can be lost or modified: Checks aren't the most reliable method of transfer. They can be lost in the mail or stolen, compromising your bank account information in the process.

• Large transactions can take longer to process: Checks take some time to process; typically, the funds clear within one to two business days. But for larger check amounts or newer accounts, the bank may place a longer hold on the check.

• Fees may apply to cash the check: For the recipient, there may be a fee to cash the check. If they need to cash the check at another external bank or through a check processing service, the fee can range from $0 to 4% of the check amount. Those fees can add up; if a service charges 4% of the check amount and the check is for $1,000, the fee would be $40.

• Not always accepted: Checks aren't always accepted as a payment method. For example, when you put down a security deposit on an apartment or place a down payment on a vehicle, personal checks may not be permitted.

2. Online ACH transfer

ACH transfers are electronic transfers made between banks or credit unions using the Automated Clearing House (ACH network). You typically receive your paycheck by direct deposit via ACH, but you can also transfer money between your own bank accounts or to another person's bank through ACH transfer.

Benefits

• They're usually free: ACH transfers between bank accounts are usually free as long as you have an existing checking or savings account.

• Transactions are reversible: In some circumstances, ACH transfers are reversible. For example, if you accidentally send a duplicate payment, enter the wrong payment amount or transfer money to the wrong recipient, you can notify the bank within 24 hours of noticing the error, and the bank will reverse the transaction.

• You can set up recurring transfers: You can set up recurring transfers to automatically transfer money to another account. For example, you can set up transfers of $100 to your emergency fund every payday, making it easier to save money.

Drawbacks

• Transfers can take several days: ACH transfers usually take one to three business days to complete.

• There may be an added fee for speedy transfers: Some banks offer same- or next-day transfers, but there may be an added fee for these services. The fee varies by bank, but it usually ranges from $5 to $10 per transfer.

• You need the recipient's information: Unlike writing a check or peer-to-peer platforms, ACH transfers require you to have more information. To transfer money via ACH, you'll need the recipient's full name, bank account number, and routing number.

3. Peer-to-peer transfers

Peer-to-peer transfers are a relatively new — though rapidly increasing in popularity — method of transferring money digitally. According to the Pew Research Center, 76% of Americans said they used at least one of the major payment apps: PayPal, Venmo, Zelle, or Cash App. These platforms allow you to transfer money to other users without having to write a check or know the other person's banking details.

Benefits

• Instant transfers available: With some apps, you can transfer funds and the recipient can receive the money within minutes.

• Convenient and fast: With peer-to-peer apps, you can transfer money from your phone in a matter of seconds. This feature makes it easy to split the check with friends, pay for items you purchase at a farmer's market, or send a cash gift.

• Eliminates the need to carry cash or cards: If you use peer-to-peer apps, you don't have to worry about writing checks, taking out cash, or keeping track of your credit cards.

Drawbacks

• Potential for scams or fraud: Unfortunately, scams and fraudulent activity are fairly common. The Pew Research Center reported that 13% of PayPal, Venmo, Zelle, or Cash App users said they had sent money to someone and later realized it was a scam.

• Added fees may apply: Although instant transfers can give users quick access to cash, there is an added cost. Rapid transfers incur added fees. For example, Venmo charges 1.75% of the transaction amount for instant transfers (up to a maximum of $25).

• Not available for all transactions: Not everyone has a peer-to-peer payment app; if they don't have an account or aren't willing to set one up, you won't be able to transfer funds to them.

4. Wire transfers

A wire transfer is a way to transfer money between banks; usually, wire transfers involve larger sums of money. For example, you may need to complete a wire transfer to put a down payment on a house.

Benefits

• Wire transfers are fast: When a loved one needs cash fast or you need to complete a transaction quickly, a domestic wire transfer can move the money within hours or even minutes.

• You can transfer large sums: While some transfer methods have daily or monthly caps on transfer amounts, wire transfers allow you to move large sums. If you're buying a home or a new car, a wire transfer will typically be a better option than other transfer methods.

• They're more secure than checks: With a check, there's no guarantee that the check writer has the funds in the account, and the check can bounce. Wire transfers are only completed if the funds exist in the sender's account, so the recipient has more peace of mind.

Drawbacks

• Transfers cannot be canceled: Wire transfers can't be canceled or reversed once the recipient has accepted the funds. If you make a mistake or send it to the wrong person, there's no way to get that money back.

• Added fees apply: Most banks charge fees for incoming and outgoing wire transfers. Wire transfer fees vary by bank, but they can range from $15 to $35 for domestic transfers and $20 to $65 for international transfers.

• International transfers can take longer: Although domestic wire transfers can be completed very quickly, international transfers take longer; an international wire transfer can take up to five days.

5. Third-party services

Third-party services like Western Union or MoneyGram allow you to wire money to recipients in the U.S. or other countries. Unlike other transfer methods, you can complete a transfer with cash, and the recipient can pick up physical dollars at a qualifying location.

Benefits

• Cash transfers permitted: With third-party services, you can visit a location with cash in hand and set up a transfer to a loved one.

• In-person transfers and pickups: Transfers can be completed online or in person, and the recipient can visit a service location and get physical cash on the spot.

Drawbacks

• Limited transfer amounts: There are limits on how much money you can transfer through these services on a daily, weekly, or monthly basis.

• Fees can be high: Fees vary by service and funding method, but they can be expensive. For domestic transfers, fees can be as high as 1.7% of the transaction amount.

• Not reversible: Once a transfer has been picked up or deposited, it cannot be reversed or canceled.

How to transfer money with confidence

Finally, you’ll want to take a few precautions to move your money safely. Here are some best practices to follow to protect yourself and your wallet.

• Only send money to people you know and trust: Before transferring money to another bank, make sure you know and trust the recipient. Transferring money to someone you haven't met is risky, and you could lose money.

• Double-check recipient details: Before completing a transfer, verify the recipient's bank account details. Double-check the routing and account numbers to prevent sending the money to the wrong account.

• Select secure passwords: Use unique, strong passwords and use multi-factor authentication with payment apps and online bank accounts to prevent scammers from using your information.

Now that you've learned about the different ways to transfer money and the fees associated with each method, you can choose the best approach for your needs.

With today's banks, online transfers are easy; many banks allow you to initiate wire transfers, make payments through Zelle, or transfer money between your own accounts at no cost. If you frequently need to transfer money, look for a bank that offers digital features and mobile apps so you can manage your money on the go.