Transfer

What Is a Transfer?

A transfer involves the movement of assets, monetary funds, and/or ownership rights from one account to another. A transfer may require an exchange of funds when it involves a change in ownership, such as when an investor sells a real estate holding. In this case, there is a transfer of title from the seller to the buyer and a simultaneous transfer of funds, equal to the negotiated price, from the buyer to the seller.

The term transfer may also refer to the movement of an account from one bank or brokerage to another.

Understanding Transfers

A transfer is a term that has a broad connotation among various industries and transaction types. Below are a few examples of how a transfer is triggered for an individual, group, or company.

In all cases, a transfer involves the movement of funds or assets, and the possibility of assigning new ownership.

Banking Transfers

When an account holder moves funds from one account to another, say from a checking account to a savings account with a higher interest rate, or from savings to an IRA account, a transfer has occurred. The transfer does not have to be within the same bank. It can be an interbank transfer from one account held at Bank A to another held at Bank B. Within the banking industry, funds can also be transferred cross-border through wire transfers from a domestic account to a foreign account, and vice versa. The receiving accounts could be held by the same account holder or could be owned by a different person or company. Funds are normally transferred for purposes of financial planning, to take advantage of better investment rates, to make payments for goods or services, to bring up the required balance of another account, to gift someone or an organization, or to save money, among other reasons.

Brokerage Transfers

Investors normally transfer funds and assets from within or outside their brokerage accounts. An investor who needs to fund his investment account so that he can purchase more shares may choose to make the transfer from another investment account held with the same broker or held with another broker. Most assets like company stock, bonds, certificates of deposit (CDs), mutual funds, etc. can be transferred in-kind from one investment account to another. These assets can also be transferred to another person or charitable organization as gifts. Money transfers can also be made from an investor's bank account to his brokerage account, and vice versa.

Payments and Cryptocurrency

In the payment space, a transfer involves moving money from one account to another. Internal transfers may include moving money from one account to another owned by the same individual or organization. Transfers between people include wires, but also e-payments like PayPal and Venmo.

In the crypto-economy, funds and cryptocurrencies are transferred frequently between users to public addresses where the funds can be accessed with a private key unique to each user. When goods and services are traded, the buyer would transfer, say bitcoins, from his holdings to the seller’s digital address. This is similar to any other market, whether brick-and-mortar or e-commerce, where transfers between sellers and buyers are what defines a market.

Cryptocurrencies can also be transferred from one cryptocurrency exchange to another exchange where they are deposited in an account also held by the sender or someone else that the seller is gifting or transacting with. Also, trading cryptos for fiat money also initiates some sort of transfer where the user can transfer money from his bank account to the exchange and buy coins with the funds.

Asset Title Transfers

Titles on assets like cars, land, and homes can be transferred when sold or gifted to an individual or corporation. When a homeowner sells his home to another, he needs to fill out the quitclaim deed or any other forms needed to transfer the title of ownership. A landowner can transfer his title to anyone or any corporation if he wants to. Ownership transfer can come about due to selling the land, gifting it, willing the title to a beneficiary, following a court order, or foreclosure from bankruptcy. Even the ownership of a phone can be transferred if the mobile carrier permits it. In this case, the mobile phone, phone number, and the contract can be transferred to another entity who would take ownership of it and accept the legal responsibility of fulfilling the bill payments as they come due.

Loan Transfer

Loans can also be transferrable. For example, a homeowner with an assumable loan can transfer the mortgage to someone else like the buyer if s/he qualifies for the loan. This could be a win-win solution for both parties involved in the transaction. When a car is sold, the seller can transfer the title along with the car loan to the buyer if s/he is found creditworthy.