Modern technology has created numerous ways for customers to initiate a transfer of funds between bank accounts. Transfers can be made by phone, internet, ATM machine, or at a branch having a live teller process the transfer. From the banks perspective there are two primary ways to transfer funds, bank wires and Automatic Clearing house (ACH) network transfers. No matter how the individual initiates the bank account transfer the bank uses one of these two methods to carry out the transaction.
A “grio” or “grio transfer” is a method of payment that is the opposite of a check. A grio is given by the payer to her bank; which then transfers funds to the payee bank or account. Payroll direct deposits are an example of a grio so are online bill payments.
A Wire transfer can be the fastest and most efferent way to transfer funds between bank accounts. The person wishing to transfer funds gives the bank an order to transfer a certain amount, the IBAN and BIC code must be provided so the bank will know where the funds are going. The initiating bank sends a message to the receiving bank requesting that it make payment in accordance with the instructions given. The actual transfer does not occur immediately, it may take up to several days to complete. The banks involved are able to make it seem as though the transfer is instantaneous because they either have reciprocal accounts or work through a third party institution that has reciprocal accounts with the banks involved on the transfer.
Wire transfers are considered the safest method of international payment, encrypted communication methods are used. Wire transfers from the US to other countries are subject to monitoring by the Office of Foreign Asset Control. They monitor to determine if funds are going to terrorists, terrorist countries or countries under sanction by the US Government. If a financial institution suspects that funds are going to any such entity they are obligated by law to block the transfer.
ACH stands for Automatic clearing House; it is a method for transferring money directly between bank accounts. When a web-site has a “pay your bill” option and a person uses this feature they are authorizing an ACH transfer. The same is true when a person uses a check by phone payment option. These type transfers while very convenient can take up to three days to complete. ACH transfers can be set up to occur automatically on a pre-determined date, such as monthly bill payments. They are like a paper check in that the customer cans stop payment and they can be returned for non-sufficient funds.
One advantage of ACH transactions over bank wires is that ACHs can be either a debit or a credit; the customer can send or receive funds. For example, with a payroll direct deposit the customer is receiving funds through an ACH transfer
Modern banking technology makes Bank Account Transfers easy, convenient and safe even for international transactions. The only real danger is if you wire your money to someone you do not know or if you provide the wrong codes on a wire transfer and send the money to the wrong place. Both of these situations would be your fault not the banks.