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Say you want to send money to a relative in South America, or you bought a painting at an online auction hosted in Europe. International money transfers, such as international wire transfers (which SoFi does not offer at this time), can be a convenient way to move funds between different countries. These transfers are typically completed electronically, without any currency physically changing hands.

When choosing the best way to make an international money transfer, it’s important to consider cost, funding speed, and any limits that might apply to how much you can send. Learn the details here.

How Do International Money Transfers Work?

International money transfers work by allowing individuals or businesses to send funds from one country to another electronically. Rather than sending cash, a paper check, or a money order in the mail, it’s possible to transfer money from your bank account (or possibly another funding source) to someone else.

Completing an international transfer is usually a straightforward process. For the popular option of a wire transfer, as well as some other methods, you’ll usually need to have:

•   Your recipient’s name and address, and the name and address of their bank

•   An international bank account number, or IBAN for the recipient

•   A routing number for the recipient’s bank which, when it’s an international transaction, is a SWIFT or BIC code

•   Your bank account number and routing number

•   Funds to complete the transfer

Wiring money internationally from your bank account can be a safer option than mailing funds via a check, as there’s no risk of any physical currency being lost or stolen along the way. An international wire transfer can also be a faster method of sending money, depending on which type of transfer service you’re using.

International Wire Transfer Regulations

There are no rules on how much money you can send overseas via an international money transfer. While the federal government doesn’t limit how much you can send, there are financial regulations that govern when money transfers need to be reported.

•   Specifically, the Bank Secrecy Act of 1970 requires banks to report transfers in excess of $10,000 to the Financial Crimes Enforcement Network (FinCEN). That rule applies to individual and aggregate transfers occurring in the same business day. FinCEN uses reporting data to monitor for and detect potentially criminal activity, including money laundering.

(Worth noting: There are also rules to know if you’re thinking about opening a bank account in another country. If you maintain overseas bank accounts or investment accounts, you’ll need to file a Report of Foreign Bank and Financial Accounts, or FBAR, on FinCEN Form 114. This form must be submitted with your tax return each year.)

Back to the topic of outgoing money transfers: Know your rights. The Consumer Financial Protection Bureau (CFPB) enforces federal protections for money transfers. Specifically, consumers have the right to:

•   Have money delivered to the correct person or business

•   Be informed of the currency exchange rate and any fees or taxes the money transfer service will collect

•   Cancel a transfer within a certain time frame without being charged a fee

•   Report problems to the transfer service and have them investigated

These regulations are designed to prevent consumers from being charged unfair fees or otherwise being taken advantage of when sending money internationally.

Recommended: Benefits of Mobile Banking

3 Ways to Transfer Money Internationally

There are several options for completing international money transfers. Comparing the pros and cons, as well as how they work, can help you to decide which one might be right for your needs.

1. International Bank Transfer

Some banks may offer international transfers without any fees as part of their suite of mobile banking tools.

If this international bank transfer isn’t available, you might consider an international wire transfer at your bank if you have a checking account, savings account, or other bank account. You can tell the bank which account you’d like to transfer funds from, provide the recipient’s information, and the bank does the rest.

•   How long an international wire transfer takes can depend on your bank and the recipient’s bank. It may take anywhere from one to five business days, or more if you’re sending a larger amount of money.

•   Keep in mind that once you submit a wire transfer request, it’s very difficult to get the money back, so you’ll want to double-check your information beforehand.

•   There’s one thing to watch out for with bank transfers: international wire transfer fees. Banks can charge a fee to send the transfer on your behalf, which you’ll need to pay before the transfer can be completed. You could easily pay anywhere from $35 to $50 per transfer, depending on where you bank. (Some banks may offer free international wire transfers for certain types of accounts; check with your financial institution to see what may be available.)

Now you know the drill for international wire transfers, which can be a secure and reliable way to send funds overseas.

2. Money Transfer Services

Money transfer services can send funds internationally, and in some cases, they may arrive much faster than they would with a bank wire transfer.

•   There are money transfer services that allow you to send funds internationally online using your bank account number, credit card, or digital wallet. Others may have branches where you can schedule bank account or cash transfers in person.

•   When comparing money transfer services, it’s important to consider the banking fees. Fees vary depending on which country you’re sending funds to and how much you need to send. For example, Western Union currently charges $8 to send up to $1,000 from the U.S. to certain locations in Central and South America. Prices vary depending on how the funds are accessed as well, such as whether they will be deposited into a bank account or picked up at a Western Union location.

•   Also note the time required. Some transfers may take up to five business days. Other services (like Western Union’s “Money in Minutes”) promise a much faster timeline, whether within 24 hours or mere moments. Make sure you understand the details before sending funds.

•   There may also be limits on the amount you can send. If you’re trying to send larger amounts in a single transaction, you may be asked to split it up into several smaller transfers. Doing so could result in paying more fees to send money internationally.

It’s always wise to do your research before getting ready to use a money transfer service to make sure you fully understand the requirements, timing, and fees.

3. Person-to-Person Payment Apps

Person-to-person payment apps, such as PayPal, Wise, and WorldRemit, allow you to send funds from your bank account to someone else, sometimes almost instantly. To make an international money transfer via an app, you might just need to know the recipient’s email address, phone number, or bank account number.

Fees will vary. With PayPal, for instance, consider:

•   The current fee is 5% of the transaction amount for personal international transfers using a PayPal balance, up to $4.99.

•   There are other possible fees, such as a 2.9% funding fee for using different sources of funding, as well as currency conversion charges.

•   There may be limits on how much you can send in a single transaction or per day.

The recipient may have to pay a fee for instant availability of funds vs. waiting for the funds to transfer over a few days to their bank account.

Which Is the Best Method to Send Money Internationally?

There is no single best method to send money internationally, as some options might work better for some people than others.

For instance, you might choose a bank transfer if you don’t use person-to-person payment apps and you need to send a larger amount of money. Or you might head to an international money transfer service if you’re hoping to deliver funds in a shorter time frame and you want to avoid the wire transfer fee that your bank charges.

Again, the most important things to consider when choosing a money transfer option include:

•   How much it will cost you in fees

•   Where you can send money to, as some person-to-person payment apps (such as Venmo) don’t allow you to transfer funds to other countries

•   When the money you send is likely to arrive

•   What funding methods you can use (say, cash vs. a bank account)

You may also need to consider your recipient’s ability to receive funds. If they don’t have a bank account, for example, then you might need to opt for a person-to-person payment app or money transfer service that allows you to send cash so they can pick it up at a brick-and-mortar location.

Recommended: Guide to Depositing a Check

Tips on International Wire Transfers

When transferring money internationally, it helps to do your research first to choose the best way to move funds. Apart from that, consider how you might be affected by regulatory guidelines.

•   As noted, if you’re transferring more than $10,000 from your checking account to someone else’s, your bank is required to report that to the IRS and possibly other law enforcement entities. Even though you may be doing nothing wrong, sending large amounts could put you under scrutiny if your bank believes those transfers are suspicious.

•   If you’re receiving money via international wire transfer, it’s also helpful to know what you might pay. Banks charge fees to send wire transfers internationally, but they can also charge you money to receive them. A typical amount is $15. That’s something you’d like to know up front so that you’re not taken by surprise when a deposit you’re expecting ends up being less than the full amount.

Knowing these details can help you understand international wire transfers and use them effectively.

The Takeaway

If you need to make an international money transfer (or receive one), there are different ways to do it. These methods include wire transfers, money transfer services, and payment apps. Choosing the one that’s most cost-efficient and/or fastest might suit your needs best, so it’s helpful to shop around.

FAQ

What is the best way to transfer money internationally?

The best way to transfer money internationally is the one that allows you to get money where you need it to go in the way that suits you best, whether that means in the shortest time frame or while charging the lowest fees. With that in mind, the options for sending money internationally include wire transfers at a bank, money transfer services, and person-to-person payment apps.

What is the cheapest way to transfer money internationally?

The cheapest way to transfer money internationally may be a transfer directly from your bank, if your bank doesn’t charge for this feature. Otherwise, you may need to comparison-shop and see how money-transfer-service and payment-app fees stack up.

Is there a way to transfer money internationally for free?

Depending on your financial institution and the type of bank account you have, your bank may allow you to transfer money internationally for free. There are money transfer services that advertise that they allow you to send funds internationally without paying a fee. However, there may be limits on how much you can send (or the requirement that you send a large sum), the transfer may take several business days, and a bank account may be required for both the sender and the recipient.

About the author

Rebecca Lake

Rebecca Lake has been a finance writer for nearly a decade, specializing in personal finance, investing, and small business. She is a contributor at Forbes Advisor, SmartAsset, Investopedia, The Balance, MyBankTracker, MoneyRates and CreditCards.com. Read full bio.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

This content is provided for informational and educational purposes only and should not be construed as financial advice.


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Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

SOBK0423016

You may wonder if it’s possible to open a bank account for someone who is in prison. The answer is, yes, it may be possible to start a bank account for a prisoner, provided it’s allowed by the Department of Corrections in the state where the individual is incarcerated. (Worth noting: It may also be a challenge to find a bank that offers this kind of account.)

Opening an account can be a positive step. Being imprisoned can limit someone’s ability to pay bills, grow savings, and generally manage their finances. Opening accounts for inmates at external banks can help them to earn interest on savings while saving money on fees. And it can potentially make their reentry into society easier upon release.

While inmates may have access to prison accounts, those can come with high fees, and they typically don’t pay interest. A prison account is a special type of account that allows an inmate to store funds which can be used to pay for hygiene items and other necessities while they’re incarcerated. It doesn’t impact their lives when released.

So, let’s take a closer look at this topic:

•   Whether it’s legal to open a bank account while in prison

•   How to apply for a bank account while in prison

•   What documentation is required to start an account

•   What kinds of accounts are available, including whether joint accounts are a possibility

Let’s start learning about accounts for inmates.

Is It Legal to Open a Bank Account While in Prison?

It’s legal to open a bank account while in prison, unless state law or correctional facility policy specifically prohibits it. The best way to find out whether opening accounts for inmates is allowed is to check with the Department of Corrections in the state where the person is incarcerated.

In Texas, for example, the Department of Criminal Justice encourages inmates to open accounts at an external bank of their choice. They can then link this bank account to their prison account. This can be used to replenish their account for items bought while in prison. Excess funds in their prison account can also be transferred to their external bank account.

The state of New York, on the other hand, prohibits inmates from opening outside bank accounts. Specifically, prisoners are not allowed to open:

•   Checking accounts

•   Savings accounts

•   Stock accounts

•   Mutual fund accounts

•   Money market accounts

•   Certificate of deposit (CD) accounts

•   “In trust for” accounts

Inmates in New York are also barred from receiving distributions from any U.S. savings bonds they might own. Prisoners who enter the system with existing checking accounts or other bank accounts are required to close them.

So, if you are thinking of opening a savings account for an inmate, whether or not you can will depend on where they’re imprisoned. If you’re able to open some kind of savings account for an inmate, the next challenge may be finding a bank that will allow you to do so. Let’s look at that issue in a bit more detail next.

Why Banks Might Refuse to Help Prisoners

Not all banks are willing to open accounts for prisoners. Financial institutions can establish their own policies for when opening accounts for inmates is or isn’t allowed. If you’re trying to figure out how to open a bank account for an inmate and you’re hitting a brick wall with banks, it could be due to one of the following:

•   The bank requires a valid ID for the inmate, which you don’t have.

•   You have not been granted power of attorney (POA) for the inmate.

•   The inmate has a negative ChexSystems report (which is a reporting system for the banking industry) or previous issues with managing a bank account.

•   The bank is concerned that funds deposited to the account might be seized by a government entity.

•   The bank is concerned that the account may be used to conduct illegal activity.

It’s also possible that banks may be worried about running afoul of any rules or regulations established by their state’s Department of Corrections or Criminal Justice. In that scenario, it may be easier for the bank to simply not offer accounts for inmates to avoid any issues.

Applying for a Basic Bank Account for an Inmate

Let’s say that it is legal in the inmate’s state for them to hold a bank account, and you have found a financial institution that is willing to open an account. The next step would be to begin the account.

Keep in mind that opening accounts for inmates isn’t exactly the same as opening a checking account or savings account for yourself. In terms of how to open a savings account for an inmate, there may be one of three possibilities you can pursue. Again, the options you’re able to choose from could depend on what’s allowed by the inmate’s correctional facility and/or state.

Option 1: Specific Prison/Bank Arrangement

Correctional facilities may allow inmates to have outside bank accounts if they open them at an approved financial institution. For example, in Wisconsin inmates are allowed to open interest-bearing accounts at a bank that’s approved by the Department of Corrections.

If you’re trying to open a bank account for an inmate, you could check with the Department of Corrections or Criminal Justice to find out which banks are approved. The Department of Corrections should also be able to tell you what restrictions or requirements apply when opening accounts for inmates.

Recommended: How Much Money Do You Need to Open a Bank Account?

Option 2: Applying to Bank of Choice

While some correctional facilities require inmates to open external accounts at approved banks, others give you some leeway in deciding where to bank. As noted, Texas encourages prisoners to open accounts at the bank of their choice if they like.

If you’re trying to open a savings account for an inmate, the hard part may be finding a bank that will allow you to do so. You can start by checking at your current bank to see if it’s an option. If not, you can then try contacting other banks in the area to see which ones offer inmate accounts.

Recommended: How Many Bank Accounts Should You Have?

Option 3: Wait Until Release

Though not ideal, an inmate could simply wait until they’re released to open a savings account. This may be easier said than done, however, if the inmate isn’t able to meet the bank’s requirements for account opening.

What kind of requirements exactly? That could mean providing a valid ID and proof of address. And again, something like a negative ChexSystems report could lead the inmate to be denied a bank account. Unpaid balances or suspected fraud are other red flags that may result in an application for a new bank account being rejected.

Can Prisoners Be a Part of a Joint Bank Account?

You might be wondering how to open a joint bank account with an inmate or if it’s even possible. Whether a prisoner can open a joint bank account with someone else can depend on the bank’s policies. If you’re opening a joint bank account and the bank requires you to do so in person, for example, you may need to provide documentation showing why the joint account owner cannot be present.

Required documentation can include having power of attorney granting you legal authority to act on behalf of the inmate. The rules for establishing power of attorney and the scope of powers granted can vary from state to state.

If the bank allows you to open joint accounts online, then you may not be asked for this document. You will, however, likely need to provide the following for a joint account:

•   The inmate’s name

•   Their date of birth and Social Security number

•   A current address, phone number, and email address

If you’re missing any of those pieces of information, you may not be able to proceed with opening a joint account online. You could call the bank to ask how you can finish the account setup if you run into issues.

Keep in mind that managing a joint bank account — one shared with an inmate before they’re incarcerated — may be handled differently. As mentioned, New York requires inmates to close existing accounts before entering prison. But other correctional systems may allow those accounts to remain open.

If you have a joint account with an inmate, it’s important to note whether any court orders exist or are likely to be filed that would allow for seizure of account assets for repayment of a nondischargeable debt, such as back child support, past due tax bills, and federal student loans. Keep in mind that co-borrowers for joint loans are equally responsible for shared debts, even if one person is incarcerated.

Required Documents to Open a Bank Account

Banks typically have a standard list of documents they require to open a bank account. The list can include:

•   Valid government-issued ID

•   Proof of address

•   Social Security number

•   Birth certificate when other forms of ID are unavailable

Opening bank accounts for inmates can require additional documentation if the bank needs a power of attorney form. An attorney can help you complete a power of attorney for an inmate, which may require a visit to the correctional facility if state law prohibits digital signatures. State law can also dictate whether a power of attorney for an inmate needs to be notarized in order to be legally valid.

Types of Bank Accounts for a Prisoner

The types of bank accounts you can open for a prisoner will generally be governed by Department of Corrections policy. But if you’re able to open a bank account for an inmate, you might be able to choose from these options:

•   Checking accounts

•   Savings accounts

•   Money market accounts

•   Certificate of deposit accounts

These options may also be available once an inmate is released. If a former inmate is having trouble getting a regular checking account after release, they might consider second chance checking or a prepaid debit card instead. These can be easier to access and provide support for day-to-day banking in a way that can be very helpful.

•   Second chance checking is designed for people who have been denied a checking account in the past. Usually offered at online or smaller, local banks, these accounts can help people to develop good banking habits so they can upgrade to regular checking later. They may not offer the full array of bells and whistles, and they may involve higher fees.

•   Prepaid debit cards, meanwhile, allow you to load funds onto the card, which you can then use to pay bills, make purchases, or withdraw cash at ATMs. A prepaid debit card is not a bank account but it can provide a formerly incarcerated person with a way to manage their money until they can get an account at a bank.

The Takeaway

Having a bank account can be a positive experience for inmates, but opening a bank account for a prisoner can be quite challenging. Not all states allow inmates to start accounts, and not all banks are willing to have prisoners as customers.

Whether you’re opening accounts for inmates while they’re incarcerated or after they’re released, choosing the right place to bank matters. Specifically, it’s important to find a bank that offers the best combination of features and benefits for inmates and former inmates and makes it possible for you to open that account before the prisoner is released.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

Can an incarcerated person open a bank account?

Whether an incarcerated person can open a bank account will depend on the policies set by the Department of Corrections in their state. Some correctional facilities allow inmates to have external bank accounts, while others limit inmates to having prison accounts only.

Can ex-prisoners have a bank account?

Yes, ex-prisoners can open bank accounts. However, their banking options may be limited if they have a negative ChexSystems report. Former inmates may consider second chance checking accounts if they’re unable to meet the requirements for a regular checking account.

How much money can a federal inmate have in their account?

The Bureau of Prisons (BOP) does not specify an upper limit on how much money a federal inmate can have in their prison account. Inmates can receive funds at a BOP-managed facility, which are deposited into their commissary accounts, by MoneyGram, Western Union, or U.S. Postal Service.

About the author

Rebecca Lake

Rebecca Lake has been a finance writer for nearly a decade, specializing in personal finance, investing, and small business. She is a contributor at Forbes Advisor, SmartAsset, Investopedia, The Balance, MyBankTracker, MoneyRates and CreditCards.com. Read full bio.