What Is a Transfer?

A Transfer Explained

A person takes a picture of a check.

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A transfer is the action of moving money or assets from one location or account to another.

A transfer is the action of moving money or assets from one location or account to another. There are all types of transfers you can make like wire transfers, ACH transfers, and balance transfers. 

Here’s a closer look at what transfers are, how they work and more details about the different types of transfer you may use.

Definition and Examples of a Transfer

A transfer is the act of shifting of money or assets (or even ownership) from one account to another. This is a broad term that covers a range of industries and services, but it is commonly used to talk about moving money from account to account.


Each time you move money from your checking account to your savings account, you are completing a transfer. Likewise, if you moved all the money from your current credit card to one with a lower APR, this would also be considered a transfer.

How Does a Transfer Work?

When you move funds from one location to another—either physically or electronically—you’re completing a transfer.

In a transfer, financial institutions essentially make equal debit and credit entries to complete the transaction. So a funds transfer is actually several payment steps. It starts with the originator or giver sending instructions to debit the account, and ends with the recipient’s institution receiving instructions to credit their account for the same amount.

A transfer could involve shifting money between two accounts you own, such as when you move $100 from your checking account to your savings account to save for a ski trip; or it could involve shifting money from your account to an account someone else owns, such as when you send your friend $20 for pizza you both shared.

Some transfers are free while others charge fees. Some are instant while others can take days or weeks to complete.


Many financial institutions allow you to set up recurring transfers so you can, say, pay your mortgage or business line of credit from your savings account each month, or make payments from a line of credit to a credit card.

Types of Transfers

Here are a few examples of the different types of transfers you can make with financial institutions.

Wire Transfer

A wire transfer happens when you electronically send money from one bank or credit union to another for what’s essentially instant access to the funds by the recipient. They typically use a network like the Society for Worldwide Interbank Financial Telecommunication (SWIFT), Fedwire, or Clearing House Interbank Payments System (CHIPS).

You usually need the recipient’s name, bank account number, address, and ABA routing number to complete the transfer. Wire transfers typically are fast and safe, but you’ll often pay between $15 and $45 for each one you send or receive. An international wire transfer is sometimes referred to as a remittance transfer.

ACH Transfer

An ACH transfer is a bank-to-bank transfer that takes place over the Automated Clearing House (ACH) network. It’s almost always free and usually takes two to three business days to complete.

If you’ve ever paid a bill online or transferred money from one bank to another using your account number and routing number, then you’ve likely made an ACH transfer.

Automatic Transfer of Funds

An automatic transfer of funds allows you to put your savings and payments on autopilot with your bank. It’s a feature where a financial institution automatically moves money between your bank accounts, loan accounts, or brokerage accounts according to a pre-set schedule—such as each time you get paid or at the end of the month. Most financial institutions offer this as a core banking service.

Instant Transfer

Many payment services companies—such as Stripe, Venmo, and PayPal—give you the option of paying an additional fee to instantly transfer money held on their platforms to your bank account or debit card. For example, if someone sends you money via PayPal, you typically have two options: 

  • You can transfer it to your bank account in two to three business days for free.
  • You can have it instantly transferred for a 1.5% fee.


Even though instant transfers have the word “instant” in the name, they can take up to 30 minutes to process.

Peer-to-Peer Transfer

A peer-to-peer or person-to-person (P2P) transfer is often done using a payment app such as Venmo, CashApp, PayPal, or Zelle. They’re easy to use and inexpensive. They usually require you to connect your bank account to send money to another user (typically a friend or family member).

Balance Transfer

A balance transfer is when you shift debt from one high-interest credit card or loan to another card or loan with a lower interest rate. This move can save you money on interest and allow you to pay off your debt faster.

Brokerage Transfer

A brokerage transfer happens when you move your investment accounts from one brokerage firm to another. The whole process can take two to three weeks to complete depending on the institution and assets involved. It usually takes place over the Automated Customer Account Transfer Service (ACATS) system.

Cryptocurrency Transfer

A cryptocurrency transfer can take place when you shift funds from one crypto wallet to another. It can also happen when you send or receive bitcoins, dogecoins, or some other type of cryptocurrency from someone else.

Home Loan Transfer

Not all home loans are transferable, but if you have an assumable mortgage, you can technically transfer it to someone else and they can take over payments. The biggest benefit is that it allows them to lock in a lower interest rate if rates have risen in recent times.

Asset Transfer

If you own land, a home, or a vehicle and need to relinquish that property to someone else—either because you want to gift it, sell it, or have been court-ordered—you can do so through an asset transfer. In some situations, such as when you’re transferring ownership of a house due to divorce, you may need to do a quitclaim deed to complete the transfer.

IRA Transfer

An IRA transfer happens when you move your individual retirement account (IRA) from one bank or brokerage firm to another. For example, if you currently have your IRA with Ally Invest but want to move it over to Vanguard so all your accounts are in one place, you could do so using an IRA transfer.

IRA transfers are generally tax-free as long as you move the money from one qualified account to another and don’t take a distribution.

Key Takeaways

  • A transfer is the act of physically or electronically moving money or assets from one account or location to another.
  • Some common types of transfers include ACH transfers, wire transfers, balance transfers, IRA transfers, and loan transfers.
  • The speed in which it takes to complete a transfer and the fees you’ll pay to do it depend on the type of transfer.
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  1. U.S. Treasury. "Fundamentals of the Funds Transfer Process." Accessed Nov. 18, 2021.

  2. Bank of America. "Transferring Funds FAQs." Accessed Nov. 18, 2021.

  3. Bank of America. "Fast, Convenient and Secure Wire Transfers Through Online Banking." Accessed Nov. 18, 2021.

  4. Wells Fargo. "Everyday Checking: Quick View of Account Fees." Accessed Nov. 18, 2021.

  5. Wells Fargo. "Transfers Questions." Accessed Nov. 18, 2021.

  6. PayPal. "PayPal Consumer Fees." Accessed Nov. 18, 2021.

  7. Ally. "What Is a Rollover IRA?" Accessed Nov. 18, 2021.

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