What are bank transfers?

Bank transfers are an easy way of sending money between bank accounts, without the hassle of handling cash. This is great for passing money over long distances and has the added benefit during the pandemic of being contact-free.

What are the different types of bank transfers?

There are three types of bank transfers available in the UK, all of which allow you to transfer money: BACS, CHAPS and Faster payments. We have dedicated posts explaining the pros and cons of BACS and CHAPS payments, so if you fancy reading more check out those links but here’s a quick run through.

BACS

Put simply, Bacs payments are Bankers Automated Clearing Service, which is the most popular method for business payments. Bacs allows for regular and scheduled payments, which is why they’re often used to pay salaries and state benefits. The payments do take three working days to process though, unlike the same day delivery of the CHAPS system.

CHAPS

CHAPS or  Clearing House Automated Payment System is used by many high-street banks for high-value payments. They allow same day payment delivery (but be warned, they are pretty strict with cut-off times for submitting payment requests).

Faster payments

Faster payments are used by customers to transfer money (you guessed it) fast. Whilst CHAPS are best for payments over £250,000, faster payments are used for anything under that.

What do you need to make a bank transfer?

In the majority of cases, all the details you’ll need to make a bank transfer are as follows:

• The date you want the payment to be made
• The name of the person/ organisation you want to pay
• The sort code (six-digit number) and the account number (eight-digit number)
• A reference to identify the payment- this could be anything from your name, ‘rent’ or ‘PIZZA DELIVERY’

How long does a bank transfer take?

As an individual, you are most likely to be making faster payments if you’re transferring any amount under £250,000 from a personal account. Under this system, your payments will arrive in the recipients account often instantaneously, or up to 2 hours from the time of sending. That’s not a guarantee however- just a standard estimate.

What if you’re sending money abroad?

Things aren’t quite as simple if you’re sending money abroad. To make an international payment, you need a few more details and are subject to cut-off times (which vary depending on the bank) but they usually should take between one and five working days. If you’re every in any doubt or have any concerns, the best port of call is to get in touch with your bank as soon as possible.