If you are an investor that is looking to buy Bitcoin using a wire transfer or bank transfer, you should first look for a crypto exchange that supports bank transfer as one of their payment methods. This is because using your bank account to buy Bitcoins would probably be the most straightforward and convenient payment methods to buy Bitcoin. However, if this is your first time buying Bitcoin, it might be a bit confusing in knowing where to start.
Bank Transfer payment methods
Depending on where you are from, there are basically two universally accepted ways to buy Bitcoin with your bank account. Either SWIFT or Sepa bank transfer. There are other types of transfers that can be made via bank so it is up to you to check out which type of bank transfer is supported by your crypto exchange and local bank account.
A bank transfer is basically a low cost and simple way that you can use to buy Bitcoin. All you will need to do would be to enter the details of your bank account, similar to what you would do when making payment anywhere else online. However, it is important to note that when you want to buy crypto using a bank transfer, these transfers via bank could take a couple of business days to be processed.
How to Buy Bitcoin With Your Bank Account
There are a few simple steps that we have listed below that you can take when you buy Bitcoin using a bank account. The methods may slightly vary depending on your bank and also the crypto exchange that you are utilising but it should generally be the same.
Step 1: Create a Bitcoin wallet/storage
To ensure your Bitcoin is secure, and if it is your first time buying crypto, you should first set up a crypto storage. Take note that your storage should be private and its private key contents should only be held by you for security reasons. You absolutely should not store your Bitcoin on an exchange for an extended period of time to reduce risk of your Bitcoin being lost.
Step 2: Select Register for a user profile with a crypto exchange
After you have created your wallet, you should look for a crypto exchange that you deem safe enough and also offers the type of coins you are looking to invest in. The bare minimum information that most exchanges require would be an email address and then to create a password for your user profile.
Of course, you will have to investigate whether or not the exchange you have selected actually lists a bank transfer as one of their available payment methods.
Some exchanges also impose a identity verification process in order to comply with Anti-Money laundering and Counter-Terrorism Financing requirements. Some of the information that you might need to provide for the first time would include your full name, residential address, contact number, a government-issued identity card, an utility bill or bank statement in order to prove that your address is real.
After creating your profile, remember to enable 2-factor authentication if the crypto exchange provides this security feature.
Step 3: Making a deposit into the exchange using your bank account through a bank transfer
After logging into your newly created account, you should navigate to the part of the site that lets you deposit your currency into the platform in exchange for Bitcoin.
You will usually be prompted to enter the amount of currency worth of Bitcoin into the system and then subsequently you will have to select the option to deposit your funds via a bank transfer. After that it is just a matter of following the site’s instructions to buy Bitcoin with your bank account.
Step 4: Buying your Bitcoin
After the site has confirmed your deposit from your bank account, you should check the balance of your account to see whether the deposit amount is correct. Take note of any deposit fees that the exchange may have charged to your profile.
You can then proceed to buy and sell the cryptocurrencies that you want on the option that would be stated on the exchange. You just need to simple click “Buy Bitcoin” from the list of cryptocurrencies provided on the exchange and just simply input the amount of Bitcoin or value of your currency that you wish to spend on. Take this moment to check all the details and any fees that the exchange may have charged you before proceeding with your transaction purchase.
Step 5: Transferring Bitcoin into your wallet
After the transaction has been completed and you have gotten your Bitcoin from the exchange, you will then need to transfer your Bitcoin from the exchange into your private Bitcoin storage. All you need will be the Bitcoin storage address and you will just need to select “Send Bitcoin” and enter this address. Take a moment to check if all details are correct before confirming the transaction for the first time.
Selecting the right crypto exchange when buying Bitcoins.
With cryptocurrencies becoming more widely popular and available globally whether you are from the United States or South Africa, there are many different exchanges available no matter which of the countries that you reside in. As such it will be important to compare the exchanges available for you and select the exchange that is most suitable for you when buying Bitcoins.
Here are a number of factors that you should take into consideration when you select a crypto exchange.
Payment methods: What are the payment methods available when buying Bitcoin? Some payment methods offer credit card or debit card payments or even Paypal. You should select the exchange that offers the payment options that you are most comfortable with.
Fees: You should take into consideration the type of fees that are charged by the exchange when you want to buy Bitcoins. Or withdrawal and deposit fees when you buy and sell Bitcoins? Remember to also take into consideration any transaction fees that the exchange may charge you.
Transaction Limits. Are there any limits placed on your user profile when you buy Bitcoins? Some exchanges place selling or purchase limits on user accounts and this can either be removed through increasing the number of trading volumes over a 30-day period or by completing identity verification processes.
Processing times: You should take into consideration how long it might take to buy Bitcoins. Some ways of paying such as using a credit/debit card may get your crypto faster on some exchanges, but when you buy Bitcoins through a bank transfer might take a couple of business days for you to get your crypto.
Types of crypto supported. What is the crypto that you can purchase with your money? Some exchanges provide more options other than Bitcoin for your investment needs while other exchanges would offer a few options which comprise the main type of crypto such as Bitcoin and Ethereum.
Ease of use. The exchange that you have selected should offer a simple and easy to use user interface so that it makes it as easy as possible for you to buy Bitcoins.
Information required for verification. When you are selecting the exchange to buy Bitcoins, you should check what information or documentation is required by the exchange for verification purposes? How long would the verification process take?
Security Features. One of the most important features when you are selecting an exchange to buy Bitcoin, you should ensure that the crypto exchange is taking preventive measures and utilising security protocols in order to protect investor information as well as assets invested into the exchange.
Customer support. What are the customer support contact methods that the exchange allows you to use? How long and what is the service that can be expected from the exchange?
Reputation. You should check out Bitcoin forums and review websites to determine what level of community trust that the exchange has and how many users are actually active on the platform. This would determine the liquidity levels of the exchange.
Storing your Bitcoin
Sometimes, certain exchanges allow its investors to store newly acquired coins on their exchange where you purchased it from. You have the option of doing this, however it should not be recommended as first of all, the person who is actually controlling your private keys to your coins are the exchange – and not you. Another reason why you should be wary when you store
Coins for the first time on the platform is because they are a valuable target for malicious users and hackers and there were numerous incidents of breaches in history.
As such, the most safest way of storing your Bitcoin would be to keep them in a secure storage that is owned by you that allows you to control your own private keys. This is especially important when you buy Bitcoin for the first time. There are also plenty of options on where you store your Bitcoin when you buy them and it is up to you to do your research before selecting one that is best for you.
Is It Safe to Buy and Sell Bitcoin Through This Method?
This method offers the most safest and secure way to exchange your local currency into Bitcoin but only if you are absolutely confident that the coin platform you have chosen is reputable and trustable as you will be essentially providing your personal financial details to them.
As such to ensure that it is safe, you should find out at least who are the people that are behind the platform, where it is based, if it is regulated thoroughly by a local financial agency and how long it has been around in the market.
If the coin platform you have selected is a peer-to-peer platform, it is also without a given that you need to be certain of the identity of the person you are dealing with before you buy any coins from them. As such you should look out for any platforms that have some sort of review or reputation system and provide security features in place to protect against any scams or fraud.
Now that you know the basic steps and what to look out for when you buy your coins through your banking institution, here are a few coin platforms that we recommend and that are reputable and trustable.
The Best Bitcoin Exchanges
eToro is one of the best trading platforms out there as they are supported in almost every single country globally and provides support to the main type of coins which include Ethereum and Litecoin.
eToro is different from other exchanges such as Coinbase in that they are a social trading platform. What this means is that the platform allows its users to buy and sell coins as well as watch what type of trades other people are performing.
A unique feature of eToro is their copy trading feature which allows its users the option to make any trade that another user performs. How this works is that, if you have selected one person to copy their trade patterns, once that user makes a buy, you immediately make the same buy. This is a special feature that not many other platforms have.
eToro was founded by a pair of brothers Ronen Assia and Yoni Assia back in Israel in 2007. They had a vision to provide great user experience and ease of use to its users of which most broker coin platforms at the time lacked.
As of today, eToro has over 3 million users worldwide and about 250,000 of this are active at any given time.
eToro is a platform that is one of the earliest brokerages that offer coin trading to its users and as a security feature, stores all of its coins in secure self-owned cold storages. It is also important to note that eToro does not allow its users to have their own private keys.
It does however allow its users to buy coins by sending and receiving funds from external coin storages. There are limits placed on how much a user can send out or receive at any time into their eToro storage though. But as of today, eToro only allows 3 types of coin to be transferred out of their storage which are BTC, ETH and XRP. Other coins need to be stored on the platform and not allowed to be sent out.
Another important feature is that eToro actually places limits on your user profile depending on how much trading volume you are going to buy. This standard is generally split into four different user types which are Bronze, SIlver, Gold and VIP, and as such and deposit as well as trading limits would depend on the type of user profile.
There is a general deposit limit placed on eToro users when they want to pay through their banking institution. This limit is set at $500 for any deposits and for added security measure, $10,000 is the maximum amount allowed for deposits.
One disadvantage of eToro is that they tend to charge above average fees compared to their other competitors on the market. For example, they charge an overnight holding fee and this fee is higher if coins are held over the weekend. The overnight hold fee comes at a price of 0.24$ for every $1,000 worth of leveraged long exposure.
A bright side is that eToro does not charge any fees for non-leveraged positions but is charged triple the price when held over the weekend.
There is also a fee charged when you perform any withdrawal of funds through a credit/debit card or your banking institution. There will be a minimum withdrawal amount of $50 and also on top of that, eToro actually charges an inactivity fee which starts after a year and is charged at $10 every month.
One advantage of eToro for users is that the platform takes into account the security and safety of their user profiles very seriously by investing into top tier security features which prevent any malicious attacks and threats. One of these features include reinforcing their payment features to ensure safety of their user’s money.
On top of that, eToro also places all funds invested into their platform on different storages held by the safest banks which are regulated to ensure safety of funds. eToro also complies with each respective country’s regulatory requirements such as KYC compliance and AML checks.
eToro also encrypts their websites with SSL and enables two-factor authentication on all their user profiles.
Luno is an exchange that has been around since 2013 and focuses more on smaller, less popular markets such as certain countries in South East Asia and South Africa. They have expanded to many countries that are developing markets with exponential growth potential and is a great exchange that also offers payments through your financial institution.
Their service is on par with better, larger exchanges such as Coinmama and Coinbase and one advantage of Luno is that this platform allows more access to countries to buy Coins that may not be available on other exchanges.
Luno offers a simple and intuitive buy sell interface which makes it both easy for beginners to use and also has enough features for experienced traders to buy coins on their platform. The only problem with Luno is that since they offer support for mostly niche markets, their trading volumes are relatively low with an average of over $USD 4.5M in a year.
The supported coins for Luno include BTC, ETH, XRRP and LTC. The coins can be bought using a debit card or a credit card. All of the deposits and withdrawals of the coins can be made directly through your banking institution. All transactions are also instantaneously processed and you will receive your coins as soon as the transaction is processed.
Luno offers a fee structure which is similar to most other platforms where fees decrease as your trading volume increases. Market makers do not need to pay any fees at 0% while market takers’ fees start from 0.10% and discounted down to 0.03% depending on the 30-day volume.
When compared to other exchanges on the market, Luno actually offers competitive fees overall. Payments through your banking institution however would incur a small flat fee depending on the country you reside in.
Luno offers security features that are similar to most other platforms which include hashed passwords whenever you are logging in and also two-factor authentication being employed on user profiles whenever they wish to log in.
Coinbase is an exchange based in the US and is a BTC broker where investors can buy and sell cryptos. Coinbase is widely accepted as the biggest coin exchange worldwide and has the one of the highest trading volumes of any platform of almost 1.2M of BTC.
Coinbase offers the popular coins on their platform which include BTC,ETH and also LTC. The best method to purchase coins on Coinbase would be paying through your banking institution and the process takes a few business days up to 4-5 business days. This is also possible by directly using your debit card or credit card
There is a limit that Coinbase imposes on its users which increases over time unless user profiles are fully verified. As such, Coinbase sacrifices some users’ anonymity for better overall security in order to comply with KYC and AML regulations. If you are a person who may value anonymity, then you can consider other platforms that do not require as much verification or identification.
This is because the Coinbase confirmation process requires a lot of verification information which includes residential address, a photo that is issued by a governing body and even utility bills in order to prove that your address exists. This is because Coinbase is regulated by a financial services company in the US. Users who go through this verification do not need to worry about this information being leaked out as Coinbase assures its users that these information are securely stored and would not share with third parties.
As Coinbase is a broker platform, they do not charge any fees when you make deposits through your banking institution to your user profile. However, there is a 1.49% fee whenever any coins are bought no matter whether you use a debit card or credit card, not counting any fees that your financial institution may charge on top of this.
To ensure that its invested assets are secured, they store their user funds in physical storages that are placed securely in vaults around the world. Additional security features include encrypted SSI and storages using AES-256 encryption.
Frequently Asked Questions (FAQ)
Q:What types of different bank transfers are available?
There are basically two types of bank transfers available when you want to buy and sell Bitcoin. The first type is SWIFT, which is a global standard used to send payment instructions and messages that use your bank account. This is because any bank transfers on a global scale rely on the SWIFT network to conduct paying instructions when a person buys Bitcoinsthrough bank transfers. The other type would be SEPA, which is an European standard for any bank transfer that is denominated in EURO. The advantage of SEPA over SWIFT is that SEPA transfer actually improves money transfer time, fees and also facilitates money transfers through uniformed bank account numbers.
Q: What are the advantages of using either a SWIFT or SEPA Transfer?
Either a SWIFT or SEPA Transfer would be one of the lowest payment options you could use to buy and sell cryptocurrency and transfer your payment. This is why there would be several cryptocurrency exchanges that provide a free or at least low-cost deposit fees if you are using bank transfer, SEPA or SWIFT and are most of the time the only payment methods if you are looking to sell cryptocurrency in exchange for fiat currency
Q:What are the disadvantages of using either SWIFT or SEPA Transfer?
The only disadvantage of paying for your cryptocurrency utilising a bank transfer through SWIFT or SEPA transfer is the time taken for transactions to be done. A bank transfer using SEPA would usually take about 1-3 business days depending on your bank and also the cryptocurrency exchange in question. SWIFT payments could potentially take up even more time than a SEPA transfer. As such, the final price you will end up paying for your cryptocurrency could be different due to the volatility of cryptocurrency assets.
Q: What cryptocurrencies could I purchase with SEPA or SWIFT?
Depending on the cryptocurrency exchange that supports the crypto, both SEPA or SWIFT bank transfer can be used to purchase Bitcoin, Ethereum, Litecoin, Bitcoin Cash, Ripple,Dash, etc.