Recurring transfers make life easier by helping you manage cash flow and savings automatically. The goal is to move the right dollar amounts to the right accounts at the right time and never forget to make a payment. Whether you're saving for retirement, paying the mortgage or home equity line, making your credit card payment or setting aside money for a major purchase or vacation, recurring transfers can help. Money just has to travel from one account to another, and it's easier than you think. Get.com will show you how.
How Recurring Transfers Work
Banks classify transfers into two types: one-time and recurring. You can schedule a one-time transfer for a specified amount of money on a certain date up to 1 year in advance; the bank will automatically make the transfer only that one time. In contrast, you can initiate a recurring transfer; the bank will make repeating, identical transfers the way that you specify until you tell it to stop. Most banks allow you to establish recurring transfers between savings accounts or checking accounts, as well as linked checking, savings, money market, investment, credit card, loan, mortgage or line of credit accounts.
Setting Up A Recurring Transfer
Depending on your financial institution, you can probably set up recurring transactions online or on a mobile device as well as at your bank. You'll have to know the routing numbers for all the accounts involved, and your bank may have limitations on which accounts you can link. You'll need to enter:
- Information for the money's originating account.
- Information for the money's destination account.
- The dollar figure for how much you want to transfer each time.
- The frequency of the transfer.
Depending on the types of accounts involved, you may want to choose a monthly or biweekly transfer schedule to contribute to a retirement savings account, for example, to coincide with each pay period.
How To Cancel Recurring Transfers
For some banks, if a service representative helped you set up the recurring transfer, you may need assistance to cancel or change it even if you have online access to the scheduled transaction. In many cases, however, you can simply change your online settings for the transfer; it may be as simple as selecting cancel, edit or delete and saving your preferences to make your change active. Other financial institutions may require you to submit written notice 2 weeks to 60 days prior to your end date. Ask your bank about their policy on canceling recurring transactions if you can't find this information online or in the terms and conditions for your account.
Advantages And Disadvantages
Like all financial services, recurring transactions are not a one-size-fits-all solution. While they provide a hassle-free way to pay your bills or make regular business payments, it's important that you weigh up the pros and cons to make sure that they're the right fit for your needs.
Pro: You can set up or edit most recurring transfers online or from a mobile device at any time.
Con: Stopping the recurring payment may require you to call, send a secure message to or visit your financial institution.
Pro: You'll never forget to make the transfer on time; the bank will automatically do it for you until you tell it not to.
Con: You'll have to remember that the transfer is going to take place and ensure that sufficient funds are available to cover it.
Pro: You may be able to use recurring transfers for your mortgage, car loans, or savings or investment accounts.
Con: If the selected date falls on a holiday or weekend, the account you're transferring the money to may not receive it until the following business day.
Pro: You can set options to transfer funds to several accounts regularly.
Con: Federal Regulation D prevents more than six transfers a month from savings or money market accounts combined.
Pro: Recurring transfers apply to a wide range of accounts and financial products.
Con: Rules may vary, depending on the types of accounts.
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