Not all couples have a joint account. Some just prefer to keep their accounts separate and reconcile joint expenses periodically, including yours truly!
When we first started doing this, we were stumped!
This wasn’t straightforward. Exchanging cash was too cumbersome, writing a check meant a trip to the bank, wires cost money and ACH money transfer isn’t allowed between two different accounts.
Here are some ways you can use to send money to a family member.
Paypal is extremely convenient and the original idea behind Paypal was, as the name suggests, exactly this. You can send or receive money using your registered email ids.
If you pick this route, make sure you do the following to avoid Paypal fees.
- Transfer the amount you’d like to send from your linked bank account into your Paypal account.
- Select the Personal tab and select the appropriate option. By default, the ‘Purchase’ tab is active. You need to change that to avoid PayPal fees. Doing this ensures that neither you nor the person for whom the payment is intended is charged any fees.
- Don’t use a credit card as your funding source as this too will incur fees.
But PayPal has it’s risks too. If they ever flag your account, you’ll be locked out of your funds for 180 days!
Member-To-Member Money Transfer
Some banks allow for member-to-member money transfer if both you and your spouse have an account there. The transfer is usually instantaneous and free of any charges. This is extremely convenient and I really can’t think of any drawbacks with this approach.
Unfortunately, this doesn’t work for us since both me and my wife have different loyalties when it comes to banks and neither of us want to switch!
Using A Hub Account
This is the technique we use. Here’s how it works:
- Select a bank that allows for free ACH push and pull
- There should be zero minimum balance requirements
- Preferably quick ACH turnaround times
- Both you and your spouse open a joint account
- You link your primary bank account to this and your spouse links his/her primary bank account to this account
- Since this is a joint account, any money put in here is available to both, but each of you will get a separate login
- You or your spouse’s profile is NOT shared. For example, you can’t view your spouse’s linked account and vice versa
- When you wish to send money to your spouse, login to this account and do a ACH pull for the amount
- Your spouse can login with his/her id to this account and do a ACH push to her linked account to transfer the money!
This works pretty well for us. Only drawback is that the transfer isn’t instantaneous. ACH transfers usually takes a couple of days depending upon the bank.
eDeposit of Checks
This works if the receiver’s bank allows for free, eDeposit of checks. When you need to send money, simply write out a check for the amount. Your spouse can then scan the check via a scanner or a smartphone and upload it to his/her bank and the funds are made available instantaneously.
Little involved, but hey, avoids a trip to the bank or to the ATM or a mailbox!
Amazon recently started a payment service called Amazon WebPay which allows WebPay users to send and receive money. There are no fees to use Amazon Webpay and you can fund your payments even from your credit card starting at a minimum of $10. Amazon is basically eating any credit card fees for now. But I do not think this is viable long-term and won’t be surprised if this changes in future.
But for now, this is yet another commission-free way to send money to family and friends!
UPDATE: I now use PopMoney instead of a hub account to send money! This is a service that is offered by some banks that allows you to transfer money via the recipient’s bank account, email or phone number. You can read my review of PopMoney here.
Discover’s Money Messenger
UPDATE: Discover recently tied up with PayPal to offer commission-free money transfer service called Money Messenger. You can use your discover card to send money for business or personal use to a PayPal recipient upto a maximum of $500 a month. For personal transfers, there are no fees either to the sender or the recipient. Best of all, the money is deposited instantly and you actually earn a cash back on the transaction! Checkout my post for a more detailed review of Money Messenger.
Do you have a creative way of sending money to your spouse?