Updated on 05.22.09

Sending Money Quickly: The Pros and Cons of Various Methods

Trent Hamm

Your brother is stuck in a small town a few states away. His wallet was stolen and he’s without a vehicle. “Help!” he cries! He needs some cash as soon as possible. What are you going to do to help him?

Your daughter loses her job. She calls you up and begs for some help making the rent this month. How will you get the money to her?

Transferring money between people is a tricky problem. In a nutshell, the more flexible it is, the more you’ll pay, and the quicker it is, the more you’ll pay.

Obviously, there are a lot of different ways to transfer money between people who are separated by distance. Below, I’ve outlined four of the most common ones. Each plan has some benefits and some drawbacks to it and is perhaps most appropriate in different situations.

Western Union
Western Union has been a straightforward way to send money electronically since the days of the telegraph. The process is simple – you simply have the person you’re sending money to go to an agent location with a form of ID and you can send the money from your computer (or from another agent location). The recipient has cash in their hands in a few minutes.

When I was young, my family used Western Union a few times in a pinch. In particular, I remember my mother using it twice when my older brother was in the Navy and needed cash in a big pinch – we were in Illinois and he was in California.

Pros: It’s quick and requires almost nothing from the recipient (only a form of ID).
Cons: It’s very expensive compared to other methods. It does require that a Western Union office be available somewhere near the recipient.
When to use it: A person needs money immediately and has fairly limited resources.

Electronic transfer
To put it simply, electronic transfers means transferring money directly from one account at a financial institution to another account, either at the same institution or another institution. I personally use this method fairly often. It’s my preferred way to send money if it doesn’t need to be there instantaneously.

Pros: It usually costs nothing and can often be done from your computer with just a routing number and an account number.
Cons: It often takes several days to make it happen.
When to use it: The other person has a bank account and has some time.

Money orders
Money orders can easily be sent from any post office (and from some private businesses).

I generally find this solution works best when you’re not sending a large amount – some smaller post offices won’t cash money orders for enormous amounts. If you send an exceptionally large money order, the recipient (if they do not have a bank account) may wind up using a check-cashing service to cash it, which will knock 5% or so off their amount – not a good solution.

Pros: The only requirement for a recipient is that they can receive mail. They’re also pretty convenient to send.
Cons: It costs about a dollar and takes a few days to arrive.
When to use it: The recipient has limited resources and no local bank where they have an account.

Although many people still send checks for many purposes, I now see checks for person-to-person transfers as an archaic thing, surpassed by electronic transfers (which, in the end, are basically the same thing without the paper document).

Pros: It’s virtually free and incredibly convenient.
Cons: The recipient has to be able to receive mail, it takes a few days to arrive, and the recipient should have a bank account (or else they’ll have to use a check-cashing service).
When to use it: Most uses that aren’t covered above, though I prefer electronic transfers in most situations.

What solutions do you use for such transfers? What situations do they work best in?

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  1. I’m not sure who they use but I noticed the other day that Walmart has a funds transfer service between locations.

  2. liv says:

    I’ve used Western Union once to send money to someone and it wasn’t bad. Took care of it online. Haven’t used it since (which is not necessarily a bad thing), but it did work for someone who needed money right away.

  3. Steve says:

    How do you do electronic transfers between parties with just routing number / account number? I haven’t seen a way to pay someone this way. In the UK it was as easy as putting in their bank account numbers and sending money.

    Other options you didn’t mention:
    PayPal – some small amounts can be sent for free (depends on receiver’s account), otherwise it’s about 3% fee

    Google Checkout – like PayPal, more set up for businesses than individuals, but individuals can use it, smaller fees (closer to 2%)

    Billpay – most online checking accounts allow you to send a check directly online. Saves you the stamp, but I’ve noticed it usually takes a couple extra days than sending it yourself.

  4. Tamara says:

    I have done electronic transfers to my sister, dad, and a friend and it was done instantly. No delay, no waiting. That is by far, my preferred method of sending money.

  5. Sandy E. says:

    When I do electronic transfers, they are instant too, and no cost.

  6. Eric says:

    How are your electronic transfers instant? Is it because it’s through the same bank or something? But yes, this is also the only method I’ve used. It’s easy and free.

  7. guinness416 says:

    In the immigrant parts of most cities there are usually companies which provide remittance services. They usually focusing on one or a couple of countries “back home” but some can do more than that. These groups are much cheaper than western union and usually do a whole bunch of other stuff very economically – visas, tax returns, resume services, etc. That’s how we send money to my mother in law every month.

  8. Baker @ ManVsDebt says:

    This is perfect timing. I’ve been looking into these different sorts of methods just in case we get in a pinch during our overseas move!

  9. Scott says:

    How about PayPal.com? All you need is a verified email address. It will cost you a percentage of the amount sent and it helps if you have a bank account to tie it to but if need be, they will mail you a check.

  10. Damester says:

    Instant electronic transfers? Wow. What bank do you use?


    I’ve both sent and received electronic transfers. From accounts within same bank (which should be instantaneous, but in the case of JPMOrgan Chase can take three full business days!) and between different banks, both in U.S. and abroad.

    All took a minimum of one full business day (as defined by the banks!)

    Instantaneous? Yea. Taking the money out of your account. But NOT being available that same day in someone else’s account.

    Seriously, what banks are you all talking about. Because I may want to shift.

  11. Dena Bugel-Shunra says:

    I used Western Union once, to get money fast to a friend stuck abroad and in a sudden pinch.

    The money got there fast. The fees were *crazy*. And the credit card company blocked my card immediately thereafter, because they suspected the transaction to be dubious. Mind you, they *did* send the money! But the next time I wanted to swipe my card, boom – the charge was refused and I had to call customer service and explain before I could use it again.

    It’s just not worth the hassle.

  12. Steve says:

    Are you doing this electronic transfer through some bank’s website? Or are you going to the bank and giving a teller the routing/account numbers of someone else’s account? I have several accounts with major banks and have never seen this option on the web interface.

  13. Cory says:

    A scam going on right now is that you receive a call from someone claiming to be your relative who is in dire need of money. They ask you to use one of the money transfer options mentioned.

    The scammers most often target older people claiming to be a grandchild and it’s happening a lot in even rural areas around where I live. They will often ask you to assign a password to protect the money. The reason is that most services do not require an ID if the person knows the password.

    In other words be CERTAIN who you are giving the money to. Scammers love quick same-as-cash options.

  14. Ryan says:

    A little bit slower but I would also recommend Xoom.com . Very easy to use, they do have a “fast” service for a slightly larger fee, and very inexpensive. I have used this service to pay people all over the world multiple times, even in third world countries, with no problems at all.

    Xoom trumps Western Union any day of the week so long as it isn’t a dire “need now” emergency.

  15. Lara says:

    The idea of checks and money orders getting used is something that’s fascinated me for years, in the same way looking at a Model T is fascinating. I’m European, and for all my financial life, electronic transfers have been the way to go.

    I can’t even think of a reason to use checks (the one time in my life I received one, it was a contest prize and they needed visual money to hand over for the photo op), and money orders feel so incredibly outdated. As does Western Union, though I can kind of see the sense in it if the transfer has to go through within hours rather than a day or two as it would in electronic transfer to an account.

  16. Brent says:

    You’re forgetting PayPal.

  17. Bryce says:

    Paypal is instant. If they have a paypal debit card they can use the money immediately.
    You do need to pay the standard paypal fees, though.

  18. nuri says:

    Work for a bank. We do ACH (Automatic ClearingHouse) transfers, as ETO’s. We say they take two business days, but many times they are completed in one. The two is in case we need to do additional verification.

    There’s also straightforward Wire Transfers. All you need for those are the other banks Wiring ABA/Routing number and account type and number.

    Our bank only charges for outgoing, to cover the fee of the Federal Reserve ($15), other banks may charge more and may charge for incoming. It isn’t instant, but it’s typically same day if done during business hours.

    ETO’s are my preferred method. They work for just about everything.

  19. Faculties says:

    I second PayPal.

    Apparently Xoom used to be a reliable company, but if you google “Xoom complaints” you’ll get a ton of complaints on several complaint sites. Sometimes the money doesn’t get there; sometimes money is debited from your account without your authorization. The chief problem seems to be that the customer-service people are in the Philippines and don’t speak English well enough to cope with many of the complaints.

    You can also send a traveler’s check to someone – you need to specify their name on the check and sign it. I haven’t done this but people tell me it works.

  20. Tony says:

    As far as I know, PayPal is instant as long as both parties have previously gone through the several day process of initially linking and verifying their accounts. PayPal works great, too, for collecting money for group events. You can send out emails to each person requesting payment and track payments made through PayPal. One thing to note, though, is that payments pulled from a credit card via PayPal incur a percentage service charge. Either account for that with everyone’s payments or present two payment amounts.

  21. Jim says:

    One method we found to get money to someone is to deposit CASH directly at their bank into their account. It doesn’t cost you anything and it is fast if not instant. If you directly deposit it at their bank then theres no wait for the money to be transferred between banks. But you have to deposit CASH or they will take a while for a check to clear.

  22. Anne says:

    My solution for my dad and me was to create a bank account with him in his state with both of us jointly on the account. Then, I get a debit card down here in my state. When I need money, he puts it in the bank on his end, and I either get it from an ATM or spend it directly off the card. Always instant.
    He can’t just deposit cash into my personal account down here because I only use credit unions and stay away from national banks like the plague.

  23. Mary says:

    When I do electronic transfers to family members who also have accounts at Bank of America, the money is available to them instantly, no matter where they are.

    I find this very convenient, since I can do it from my home computer whenever I need to.

    Someone I know told me a story about her daughter running out of gas in a bad neighborhood late at night. She pulled into a gas station and realized she didn’t have enough money left in her account to buy gas. She called her mother on her cell phone. Although her mother was on the other side of the country, she was able to log into her B of A account on her home computer and transfer funds from her account to her daughter’s account. Within the minutes, the daughter was able to swipe her debit card through the pump and put gas into her car.

  24. Pennie says:

    When son was away in college and needed an occasional *loan,* I simply deposited cash into his account (in person) at a local branch of his brick and mortar bank. Once I explained the dilemma it was always immediately posted and available for his withdrawal.

    No fees, no hassle, no wait.

    Of course we’re talking $300-$500, not in the thousands…

  25. Anne says:

    My parents and I had a similar set up to what Anne and Penny described. It worked quite well and it was pretty easy to untangle my accounts from my mom’s later once I was all set with my first job after graduation.

    I also used Western Union a few months ago and the fees were nuts. Plus because it was the first time I used the service I still had to call a CS rep to verify my identity. I know all of these restrictions are to prevent money laundering, etc. but they’re a pain in the butt. I am going to have to try PayPal although my did still hasn’t paid me back from the WU transfer.

  26. kitty says:

    Here is the way I used some years ago in Europe — I needed to get cash from my mother to my relatives and didn’t want to carry it around.
    Note: it wouldn’t work if your wallet is stolen as it requires a credit card.
    Here is what I did:
    1. My mother sent a check to my credit card issuer for $2000. Note that this card had no balance. She also called the credit card company to let them know that I’d be withdrawing the money and from which country. She did it to find out the details – i.e. if it would cost me anything, how much would it cost in interest if I take money before they get her check, etc.

    2. In a couple of days I went to the very first bank in Europe and asked them for cash advance on my credit card in the amount of $2000. By that time the credit card’s issuer has already got my check. So there were no days for which they could charge me interest as my transaction simply reset the balance to 0.

    Now, if there had been some time delay between the time they get the check and the time the charge is posted I’d be charged interest for these couple of days. But a couple of days worth of interest is a very small amount. At 15% a year it would be under $2 for $2000.

  27. Kacie says:

    I’ve used PayPal or Revolution Money Exchange to zap money around.

  28. Brigitte says:

    At TCF, cash deposits made to a teller take 3 days to clear. No joke. Same problem has been had with Standard Federal, and again since they changed to Bank of Annoyance.

    My mom is listed on my checking account at our local credit union in case of emergencies, but I’m not listed on hers. However, we can still do instant money transfers between accounts (we went in and got it set up; I can’t see the balance on her account, and she can’t see mine, at her request). Between banks takes days though.

    When I was a teen, Visa had a student debit card that was linked to my parents’ account. If they put money on it, it was available immediately, but still took 3-7 days to debit from their account. Came in very handy when I ended up having to spend over half my spending cash on water in Egypt because the tour group didn’t allot enough of the pre-paid water for us.

  29. Gary Mahler says:

    I’m not shilling for Wal Mart, but recently needed to get money to a relative fast and found Western Union to be cumbersome and difficult plus they decided that the person I was sending money to was someone that had scammed them. Finally went to Wal Mart and transferred the money through them. The cost was less than Western Union, and it was available in ten minutes for the relative.

  30. dream says:

    I am NOT their biggest fan but Bank of America is where most of my family banks and electronic transfers literally take just a few seconds. It IS because the accounts are in the same bank. Transfers to another of my own accounts from BoA can take days.

  31. Oliver says:

    For folks in the USA, I typically transfer money electronically via my bank’s (USAA) website. These ACH or EFT transfers typically arrive in the destination accounts overnight and are immediately available for the recipient — most banks treat incoming EFT as a direct deposit.

    For my family outside the USA, I created free joint checking accounts and mailed them debit cards. Fidelity’s mySmart Cash Account has no international transaction or ATM fees, and no monthly fees. When I want to send money overseas, I simply transfer the funds into the appropriate Fidelity checking account and the recipient can immediately withdraw their funds from the closest ATM — no fees, no hassles.

  32. T'Pol says:

    Electronic Transfers taking time? Wow! In my country whichever bank you use, they are instantly done. I am a preferred customer at my bank so I pay nothing to make electronic transfers through Internet Banking. At some banks, there is a 1,50 TL (almost a dollar) fee for electronic transfers between different banks. If you are transferring funds between accounts at the same bank, that has no cost at all whether you are transferring TL, USD or Euros.

    If you go to a bank branch and have electronic transfers done, they may cost you about 10 USD. I never set foot at a bank anymore. Thanks to Internet Banking with top notch security. Whenever I want to make a transfer, the bank issues me a one time only password thru my cell phone at no cost and I make my transfer using that password. I have also set up notifications of transfers over 1000 USD. Whenever a transfer exceeding 1000 USD is made from my account, I receive a no cost SMS to my cell.

    We do not use personal checks. That has never been a form of payment in my country.

  33. Dot says:

    I am not also a fan of Bank of America. I did open an acount for my brother. Anytime i send him money I do it that way.

  34. Michelle says:

    We belong to a credit union that offers “Shared Branching” and online/phone banking. I have my online/phone banking set up to be able to transfer to a myriad of accounts. When my husband/kids call/email me and need money, I can immediately transfer to their accounts, wherever I am, or more importantly, wherever they are. When my daughter was in England and my son was in college it worked great. They could be in line checking out at a store and be short, call mom on their cell and have the money transferred instantaneously. (Figure out the repayment thing later! ;-) If I was gifting them money for birthdays or tickets home, it was handy to use the online banking and transfer to their accounts. Other family members have accounts at the credit union, too, so I can transfer to theirs with no problem.

    “Shared branching” is great, also. If both the giver and recipient belong to credit unions that offer it, the giver can deposit funds into the recipient’s account at a credit union (during regular office hours) and the recipient can go into ANY credit union nationwide that does “Shared branching” and withdraw it from their own account. Neither party is privy to the others balance. Just make sure that the money that you are depositing will not be “held”.

    All this and NO FEES!

  35. Mary Johnson says:

    We jut dealt with this yesterday. I’ve never thought about trying a electronic transfer. We went to the post office and overnighted a check to our son so that we would know he would have it the next day. I don’t know how the fees compare to western union.

  36. Botch says:

    Your bank can make an electronic ACH transfer, usually with one day availability and the cost should be about $5.

    For same day availability ask your bank for a wire transfer to be disbursed upon receipt of proper ID. This may cost $10 or $15 and can be sent to any bank anywhere in the country in case your desperate receiver has no account.

    Both these type transactions require a lot more Bank Secrecy Act paperwork and liability so depending where you bank, there may be some resistance. Best to bank where you are known.

  37. Ned says:

    Don’t forget Paypal! Also, Chase has a convenient feature wherein I can enter someone’s info online, and they will cut them a paper check and mail it to them. Free for both parties. Meant to be an online bill-pay feature, but I can pay anyone.

  38. Rachel says:

    I like to use the electronic transfer. It makes everything very easy, and I don’t have to worry about going into the bank.

    I also love the feature where Chase will send out the checks for you. I think this is an awesome way to save time and money because you don’t have to worry about the stamps and you don’t have to order any checks!

  39. Kim says:

    curious about the e-transfers. This would work in most of the scenarios above, but what about the one where the person just had their wallet stolen? Without ID, I can’t access my own funds in my own bank account, so how would the other party do so when they are out of town and away from their own banker who would probably know them on sight?

    In that case, it would seem that Western Union or Moneygram (available at WalMart and some other places) would be the only option, but perhaps other banks work differently.

    I sometimes have to offer two forms of ID at my own bank to access my own account. This has puzzled me for a long time. They have my info on file, including a signature card, why then do they put me through the wringer to access my account? And yes, I’m with one of the big banks, but when I first opened my account back in junior high school they were a tiny little local bank.

  40. Mona says:

    Another good idea is a prepaid credit card. Many prepaid companies will allow 2-3 cards issued on the same account, making it good for families. Walmart has the best deal… $3 to load money. Others charge around $5. There may be cash withdrawal fees as well, but they are nominal.

  41. lu3 says:

    When each of my daughters started college, we set up a joint checking account for her with my name on it as well (free for students at the bank I use) and used it to do immediate account to account transfers of monthly spending money. Now that they are on their own, we still maintain those checking accounts (still free) with small balances, and if there is an emergency or if they need to repay me for money loaned, we can still do immediate account to account transfers. They use debit cards or checks to access the money.

  42. Heather says:

    I tried to send my brother money through Western Union on my computer and it was a diasaster. before they would send it they wanted to know what year I got a mortgage (I own four houses which have been refinanced multiple times) what year I opened a credit card with Chase – can’t remember – and several other question including my social security number’s last four digits.

    I finally went to a grocery store and it went smoothly.

    Western Union is a disaster in my opinion.

  43. prodgod says:

    PayPal is great for instant transfers, BUT it can take 3-5 days for the recipient to transfer the money from their PayPal account into their bank account (unless they have a PayPal debit card, but who does?)

    Nobody else has experienced this? It’s even stated clearly on their website.

  44. Maggie says:

    Bank of America does very well for accounts that are both B of A … even when they originally were two different banks (say, in our case, Fleet Bank in NJ that was recently bought by B of A, and a long-time B of A branch in the Florida Keys). An important key to making the first transfer happen in minutes is to set up the account info on your transfer list ahead of time.

    Paypal works well, but your recipient needs to have a Paypal account. If you want cash quick, they’ll need a Paypal debit card.

    The other way we’ve done it is to drive to our nearest branch of the recipient’s bank. Armed with only their name and account number … and a guess at their age in case of two similar names … if I deposit cash they can access it with a debit card or at their bank in literally seconds.

    I’ve done this with Commerce bank, PNC Bank, and Wachovia.

  45. Dean says:

    In the UK you can either
    1. Pay $50 to have the money transfer done within the hour,
    2. Have up to $16000 transferred free within 30 minutes – 2 hours
    3. Have larger amounts transfer in a three-four working days.

  46. noko says:

    @Oliver – Fidelity’s mySmart Cash Account *does* charge a 1% fee for withdrawing cash from foreign ATMs. This is a wholesale currency conversion fee charged by the VISA network, and the fee is passed on to the customer by Fidelity. It’s still a very reasonable price for foreign currency.

  47. Rebecca says:

    When I was in college, I kept a bank account at a bank located near my mom so she was able to deposit cash and any cheques that arrived at her house in my name.

    I also have a paypal account with a debit card, which helps especially if you are traveling internationally, as paypal charges less than US$1 for currency conversions!

  48. Chris says:

    As others have mentioned PayPal is great. That is actually one of the biggest selling points to sellers versus traditional merchant acccounts is the speed of receipt of funds. For highly leverages sellers it is a great resource.

    Electronic Funds Transfer, just to define it further can be defined between the low value and high value clearing system. Most of us use the low value (ACH) clearing system for our bill pay and companies use it for such things as direct deposit of pay checks.

    The high value clearing system, i.e. wire payments provide instant clearing between bank accounts and is usually the easiest way for any cross border transactions. Costs can be all across the board. For individuals they can charge you anywhere between 25 and 50 dollars to send and another 10-25 dollars to receive. Companies have more leverage. One of my companies I had negotiated an 8 dollar wire fee.

  49. Good review! It really depends on the situation as you pointed out. The faster, the more expensive . . . usually.

  50. Kevin says:

    In Canada, if you have a joint-bank account setup with the person who needs the funds you can drop money in as they need it (assuming it’s coming from the same bank). Such transfers are immediate and can be done safely over the internet, via phone banking or even at an ATM. Also the money can come not just from bank accounts but also lines of credits etc. As I went through university my parents were able to keep track of money being withdrawn/my spending and able to transfer money over immediately as it was needed.

    Usually banks have a limit on how much money can be moved around from an account over a single day so check this ahead of time before jumping straight in. Also, each bank and banking packages have their own fees and restrictions, so best to check ahead of time, but certainly an option.

  51. tammy says:

    Great post! And orginal – I don’t think I’ve seen this covered anywhere.
    My bank does instant transfers and it is awesome when one of the kids, who also bank there, needs quick cash.
    PERFECT transaction policy…

  52. Dooley says:

    My mum is listed on my checking account, so she just deposits money directly if I’m in a pinch. It’s nice that she can also write herself or my dad a check from it if they pick up something for me. You definitely have to really trust your parent and their financial prowess, as well as the unlikelihood of their taking out a spat on your checking account.

    That being said, I also have my own accounts to which she is not a party.

    I’ve also been in the Money Transfer pinch, though. I opened a Wells Fargo account for the same reason (i.e. my mum could deposit money, which I could then take out) for when I was in Europe. I was explicit about all of this signing up for the account. Lo and behold, I get to Europe, and can’t get any money out. It wasn’t just my account, either – my parents called and the entire Wells Fargo system wasn’t working in Europe. Needless to say I don’t have an account with them anymore.

    And boy, those money transfer fees were insane.

  53. Tordr says:

    There was one method the list forgot:
    Sending paper money by post –
    Pro: Fast as the mail. Does not require the recipient to have an account. Untraceable.
    Cons: Illegal. There is a small chance of the money disappearing, and you have no way to get it complain because it is illegal.

    If you do this, please cover the money with a covering letter or two, so you cannot see the money through thin envelopes. Also no coins.

  54. ace says:

    I would recommend Revolution Money Exchange [RME for short], as a great deal of people are flocking to it lately. They do have a debit card. They are “paypal like” except RME has a few limitations.

    You can use RME with the Abundant Living System providing the inviter accepts RME. I love RME despite the 2500 monthly limit. It’s not a bad thing to actually have a limit in place, as I have heard horror stories from those who had been fxxked from using paypal and how some people had thousands of dollars stolen from paypal via false complaints from buyers on sites like ebay and such.

  55. Steve says:

    I still haven’t seen anyone post how ACH works in their banks. Is this an option on your bank website? Or are you going into a branch and requesting an ACH transfer?

    On all my bank accounts, I have options on the web to add external accounts, but they have to be accounts that I own. Typically, the bank sends some trial deposits and I confirm the amounts to verify that I own the account. Then, I can initiate ACH transactions.

    Please provide more detailed information on how you are able to do an ACH to a 3rd party with your bank, and which bank it is.

  56. ChrisD says:

    The EU is also trying to make it easy to transfer money between countries, some counties are better than others. Transfer any amount up to 50,000EUR from Germany to the UK (you need to get BIC and IBAN numbers which is easy enough), cost 15cents. Transfer any amount from the UK to Germany, £20. France got out of the requirement to offer same price international transfers by putting it on their website and then claiming a technical issue made that impossible to use, forcing you to come into the branch and spend money.
    Having a transfer take 3 days was almost purely an excuse to hold on to your money for free for 2 day and 23 hours. That is slowly changing so some UK transfers are instantaneous and other still take days.

  57. adsenseempire says:

    Nice post! This is also my biggest earning area. However, it�s not a much yet, but I am sure it will improve.

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