With so many ways to transfer money, here’s an in-depth comparison of various methods.
It’s easy to get confused by all the money transfer options out there. Which is cheapest? Which is fastest? And what are the pros and cons for each?
If your head is spinning, we’ve written this guide to clear the air. Learn about the differences between various methods to pick the one that works best for you.
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The best options based on transfer type
Cheapest for domestic transfers: PayPal and payment apps
If you want to make the cheapest domestic transfer possible, try PayPal and payment apps like Venmo, Circle and Facebook Messenger Payments. With these services, you can send funds to friends and family for free.
Though PayPal is an excellent choice for domestic transfers, you have better options for international transfers. PayPal can be expensive for sending money overseas.
Cheapest for international transfers: Online transfer services, Circle and potentially bitcoin
Online transfer services like XE, TransferWise and World First are known for low transaction fees and great exchange rates. In some cases, payments app Circle will be an even cheaper option — its 0.25% margin on the mid-market rate is one of the best.
The dark horse in this category is bitcoin, which usually isn’t the most cost-effective choice. However, you could theoretically make an international money transfer at zero cost if you line up the right trades on a P2P exchange like LocalBitcoins.com.
Fastest for domestic and international transfers: Western Union and MoneyGram
Technically, PayPal and payment apps are fastest — you just hit “Send” and your recipient gets your transfer immediately. However, most of the time your recipient will need to withdraw the money to their bank account. Because that usually takes one to two business days, PayPal and payment apps may not be the fastest in terms of a complete transfer.
Instead, the prize for speed goes to Western Union and MoneyGram. When you send a transfer through one of these services, your recipient can pick up the money from any of thousands of agent locations worldwide within minutes.
Cost and speed comparison of different money transfer methods
|Online transfer services||Send: $3–$10|
Exchange rate markup: 0.5%–1.5%
|1–6 business days|
|ACH bank transfer||$0–$3||1–3 business days|
|Bank wire transfer||Send: $20–$50|
Exchange rate markup: 3%–5%
|Up to 2 business days|
|Western Union and MoneyGram||Send: $10|
Exchange rate markup: 1%–3%
(Based on a $500 in-person cash transfer)
|Within a few hours|
|PayPal||Send domestically: 0%–2%|
Send internationally: 3%–4%
Exchange rate markup: 2.5%+
|1 business day|
|Payment apps||Send: Free|
Exchange rate markup (Circle): 0.25%
|1–2 business days (including withdrawal time)|
|Bitcoin||Transaction fees and exchange rate markups vary||1–6 business days (including withdrawal time)|
|US Postal Service||$20–$60||1–10 business days|
Online transfer services
- Speed: One to six business days for a complete transfer (deposit, transfer and withdrawal)
- Cost: Approximately $3 to $10 transfer fee (fee may be based on percentage), with a typical 0.5% to 1.5% markup on the exchange rate
Recently, online transfer services like TransferWise, XE and World First have been giving banks a run for their money. They’re not necessarily faster (they could take longer than bank transfers, depending on how you’re sending your money). However, they typically charge lower transfer fees and offer much stronger exchange rates.
If saving money is your primary goal, an online transfer service is an ideal choice.
ACH bank transfer
- Speed: One to three business days
- Cost: Up to a few dollars
One way to send money from your bank account is by using an Automated Clearing House (ACH) transfer. For domestic transfers, the bank sends your funds to the US-based ACH processing system, which then sends the funds to your recipient’s bank.
What is an ACH bank transfer?
The Automated Clearing House (ACH) is a network that moves money and information between bank accounts through direct deposits and payments. It processes more than $40 trillion each year and supports more than 90 percent of all electronic payments in the United States.
Since your bank needs to send your money through an intermediary, the transfer takes some time to complete — usually one to three business days. However, ACH transfers require less work for your bank than wire transfers, so they typically cost less — free or up to a few dollars.
The Automated Clearing House is based in the United States. If you want to make an international transfer through your bank, use a wire transfer.
Bank wire transfer
- Speed: Up to two business days
- Cost: About $20 to $50 to send and $10 to $20 to receive, with a typical 3% to 5% markup on the exchange rate
A wire transfer is an effective way to transfer money domestically and internationally. It’s quite fast — usually completed within two days and often within a few hours.
The only downside to a wire transfer is the cost. You’ll typically pay $20 to $30 to send a domestic wire and $30 to $50 to send an international wire. Your recipient may also pay receiving fees to their bank — up to $20 for domestic and international wires.
And those aren’t the only fees you might pay. If you send an international wire transfer, your bank will convert your money (say, US dollars) into another currency (for example, euros). During this conversion, the bank may introduce what many people see as a “hidden fee” based on differences in the exchange rate.
How banks make money off the exchange rate
How much is $1,000 worth in euros? According to the mid-market rate, it might be worth 950 euros. The mid-market rate is the fairest representation of what one currency is worth in another currency. It’s determined by what buyers and sellers worldwide are willing to trade two currencies at — and the rate that banks and transfer use when they trade among themselves.
So if you send $1,000 through your bank to your mother in Italy, you might think the bank will send her 950 euros. You’d be wrong: The bank will charge a markup above the mid-market exchange rate. This means that instead of converting your $1,000 to 950 euros, it may convert your money to a smaller amount — maybe 910 euros. The bank will effectively make a profit of 40 euros.
Many consumers consider this a bank’s “hidden fee.” In fact, charging a margin above the exchange rate is common among all money transfer services. Even still, banks typically charge the highest markups among money transfer providers.
Cash pickup services like Western Union and MoneyGram
- Speed: A few minutes for cash transfers; hours to a few days for bank transfers
- Cost: About $10 for the transfer fee, with a typical 1% to 3% markup on the exchange rate
Foreign exchange services like Western Union and MoneyGram have long been reliable alternatives to banks. They can be faster and cheaper, and they have physical locations — which makes transfers convenient if you only have cash. Your recipient can usually pick up cash at a local agent location in minutes.
With these services, you can also send money online with a credit or debit card or through your bank account. And you can simply have the funds deposited into your recipient’s bank account within a few hours. (Bank transfers may be more expensive, however.)
You’ll find that Western Union and MoneyGram tend to charge exchange rate markups that are between 1% and 3%. For example, if $1,000 is worth 950 euros according to the mid-market rate, Western Union and MoneyGram may convert your money to 920 euros instead.
- Speed: Typically one business day (including deposit, transfer and withdrawal)
- Cost: Approximate transfer fee of 0% to 2% domestic and 3% to 4% international, with a typical exchange rate markup of at least 2.5% above PayPal’s wholesale currency rate
PayPal is technically an online transfer service, but it doesn’t come with the same advantages of sites like TransferWise or XE.
For international transfers, PayPal charges a percentage fee and an exchange rate markup that makes it more expensive than other online platforms. (PayPal doesn’t publish its exchange rates, but it typically adds a 2.5% margin on the rate it gets from its own bank.)
The good news is that PayPal can be a good choice for domestic transfers. It charges nothing to transfer money if you pay with your PayPal balance or a linked bank account.
PayPal is effective if transfer speed is your main concern. Transfers among PayPal accounts are instant, and your recipient can complete a withdrawal within one business day.
- Speed: Instantly to deposit and send money; one to two days for withdrawal to bank account
- Cost: Typically free to deposit, send, receive and withdraw money; Circle charges an exchange rate markup of 0.25%
Mobile-based payment services like Venmo, Circle, Square Cash and Facebook Messenger Payments are especially popular among younger users. They can also be excellent options for money transfers.
Payment apps are top-notch for domestic transfers, which they can complete instantly. And it’s usually free to link a payment source and withdraw money (withdrawals typically take one to two business days).
For international transfers, not all apps are good options. You can’t transfer foreign currencies on Venmo and Square Cash, for example. However, apps like Circle allow transfers in currencies beyond the US dollar.
Circle for international money transfers
Circle is available in 14 countries and allows you to transfer US dollars, euros and British pounds. It’s free to deposit, send, receive and withdraw money on the platform. Further, Circle’s exchange rate markup of around 0.25% is one of the best on the market.
- Speed: One to four business days
- Cost: Transaction fees for deposits, withdrawals and transfers vary; exchange rate markups vary
Bitcoin is one of the most interesting ways to transfer money. However, it’s often not faster or cheaper than other methods.
It’s not faster, because you have to convert your fiat currency into bitcoins and then send the bitcoins to your recipient. After, your recipient must sell the bitcoins back to the fiat currency they want.
What is fiat currency?
Fiat currency is government-issued and -regulated money like US dollars, Japanese yen and euros.
It’s also not cheaper, especially because you’ll lose money on the exchange rate twice: once when you buy bitcoins and once again when your recipient sells the bitcoins.
For these reasons, it’s usually not a good idea to use bitcoin for a money transfer unless you’re using a peer-to-peer bitcoin exchange.
Using peer-to-peer bitcoin exchanges
Transferring through bitcoin isn’t usually cheaper or faster than sending through money transfer services — but it can be.
The trick is to use a peer-to-peer (P2P) bitcoin exchange. If you and your recipient are willing to spend the effort lining up the right trading partners, you could theoretically complete an international money exchange at no cost.
Sending a check or money order by US Postal Service
- Speed: One to 10 business days for US Priority Mail
- Cost: $20 to $60 for US Priority Mail
Bank transfers and online money transfer services are all the rage these days. But you can still send money the old-fashioned way: pop a check or money order into an envelope and send it off.
Sending a check overseas through services like USPS’ First-Class Mail International is easy, but it could take a long time — from a week to 21 days — before your recipient gets the money.
Faster methods include:
- US Priority Mail International. Six to 10 business days, starting at $23.95
- Priority Mail Express International. Three to five business days, starting at $40.95
- Global Express Guaranteed. One to three business days, starting at $62
Sending money to someone domestically takes one to three business days and can cost as much as a postage stamp.
Overall, using mail for money transfers may have worked OK in the past, but nowadays there are much faster and cheaper options.
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Which method should you choose?
Each money transfer method has its pros and cons. However, cost and speed are primary concerns for most people.
If your recipient needs funds in just a few minutes, Western Union and MoneyGram are effective options. But if your recipient is willing to wait a few days, online transfer services and payment apps are your best bet — they’re relatively fast, and they could save you quite a bit on your next transfer.