So this isn’t exactly a techie-type post but I’m sure some geeks out there will appreciate this useful trick. The situation is this: you’ve got two different bank accounts with two different banking institutions and you want to transfer money between them, but you want to do it online (because you’re lazy like me) and without fees (because you’re cheap like me). If this sounds like your situation, then read on.
My first attempt to perform this transaction involved two PayPal accounts, both of which were under my name but each linked to bank accounts at two different banks. To avoid fees, I sent money from one PayPal account as a gift to the other, and I had to use the eCheck option. After the transfer cleared, I simply withdrew the funds from the second PayPal account and deposited it into my second bank account linked there. Let me tell you that this does work. The trouble is you have to have two different PayPal accounts. The second problem is PayPal itself: it’s notorious for freezing funds for any “suspicious” activity.
While I had two $x,xxx transfers go through using this PayPal-to-PayPal method without any hitches, I didn’t want to keep risking my funds within the clutches of PayPal’s draconian money handling system.
Fortunately I remembered that I had an old ING Direct savings account that I had opened up in the glory years when CDs returned 5.25%. I had moved all but $5 out of that account but I logged in without any issues. By the way if you haven’t logged in in a while, the PIN must be at least 6 digits long. They don’t force you to change it but I’d recommend it if you were using a 4 digit PIN before.
If you don’t have an ING Direct savings account don’t sweat. It’s free and easy to sign up online. If you want a $25 bonus, simply get in touch with me and I can refer you and I also get $10 myself. Win-win for everybody. They are a virtual bank in that they have no brick and mortar branch offices, so all your account administration is done completely online. This was perfect for me since I wanted to be able to transfer money between my accounts online without writing checks to myself, driving to the ATM, and cashing them. Basically ING Direct gave me all the benefits of a PayPal-to-PayPal transfer without any of the risk.
Once in your ING Direct account, simply link each of the different bank accounts that you want to transfer funds between and wait a few days in between. I think you can only link one account at a time so you’ll have to be patient the first week. Within two days you’ll get some micro-deposits which you’ll need to verify. It works just like adding an account with PayPal so if you’ve already done that before you’ll have no surprises here.
You can link up to three external accounts in ING Direct and money can be transferred freely to and from ING. Once the funds settle online, it’s just one transfer away from being deposited into another external account. No fees, no writing and wasting checks, no driving, no check cashing, no hassle! It’s much safer than entrusting your money to PayPal and doesn’t require you to open up two distinct PayPal accounts either. One simple ING Direct account will do.
Possible bonus: I haven’t played around with it, but I believe you can even schedule automatic transfers that repeat every so often. This is perfect for those banks that waive minimum deposits and banking fees when you have a recurring direct deposit set up. Simply spread your paycheck into your other banking accounts with ING Direct as your medium. Then enjoy free checking with all your banks!
[Update] I tried this but you can’t set up linked account to linked account transfers directly. So you’ll have to stagger two automatic transfers spread across a few days to wait for the transfer to settle. I set one up on the first of the month for a transfer from bank account A to ING, then another on the eighth of the month (a week or five business days) from ING to bank account B. It slows down the process, certainly, but it can be done hands free and fee free. [/Update]
Hopefully this little trick helped you with your quest for the lazy man’s way to transfer money between your bank accounts online and without fees or PayPal.