Wire transfers can be a convenient and safe way to send and receive money electronically, both domestically and internationally. While wire transfers serve a number of purposes, they can be especially good if you need a secure way to send cash to someone overseas or if you need to transfer a large sum, such as the down payment on a house.
Key Points
• Wire transfers are electronic money transfers between bank accounts, particularly useful for large sums and international transactions.
• Domestic wire transfers are typically completed within one business day, while international wire transfers may take up to five days.
• Wire transfers generally differ from ACH transfers, P2P payments, and checks in terms of speed, fees, and convenience.
• Wire transfers are considered secure but can be more costly, with fees ranging from $0 to $50.
• To send a wire transfer, you’ll need the recipient’s bank details and sender’s identification, and once initiated, these transfers cannot be canceled once initiated.
Wire Transfers Explained
A wire transfer, as the name suggests, is a method of transferring money from one bank account to another electronically. Wire transfers allow you to move large sums of money both within the United States and internationally. Wire transfers are convenient, but they are not instantaneous:
• Domestic wire transfers are typically completed within one business day.
• International wire transfers usually take a few business days; in some cases, up to five days.
Wire transfers allow funds to flow between individuals and/or businesses, and they may be facilitated by banks or a nonbank money transfer service, such as Western Union or Wise.
It’s worth noting, however, that wire transfers can be a more expensive way to move money out of or into a bank account. Depending on whether they are domestic or international and the bank or service you use, the charge could be anywhere from $0 to $50. Another point to know: Wire transfers typically can’t be canceled, so it’s vital to double-check all details carefully when making one.
How Wire Transfers Differ From Other Payment Methods
Wire transfers aren’t the only way to send money. Other options include:
• ACH transfers, which electronically move funds from one bank to another
• Peer-to-peer (P2P) payment services, such as PayPal, Venmo, and Cash App
• Traditional cash or check payments
• Money orders and cashier’s checks
Here are some considerations regarding how wire transfers compare to the alternatives above:
• Speed: Wire transfers are generally faster than writing a check, but P2P payments may be speedier, particularly if you pay a fee for instant transfers.
• Convenience: While many wire transfers can be done online, you may be required to visit a bank branch or retail location in person in some cases. ACH transfers and P2P payments, however, can be done from a smartphone or computer, wherever you may be.
• Fees: Senders often pay fees for wire transfers, while recipients may or may not need to pay a fee. Money orders and cashier’s checks also typically come with fees for the sender, and P2P payment apps usually charge for instant transfers.
• Amounts: Wire transfers typically allow you to send the largest sum of money (upwards of $100,000), which makes them popular in real estate transactions. P2P payment apps usually have daily and weekly limits, and money orders tend to max out around $5,000.
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How Do Wire Transfers Work?
The process for completing a wire transfer is usually pretty straightforward:
• The sender visits a financial institution or a wire transfer service location or initiates the transaction online.
• They provide information about themself and the recipient.
• To initiate or complete the transfer, the sender may also need to pay a fee.
• The bank or service provider will communicate with the recipient’s institution to verify the transaction. The funds will then be deposited into the recipient’s account, where the recipient can access the money.
• In some cases, the recipient may need to pay a fee as well.
Domestic vs. International Wire Transfers
Domestic wire transfers refer to electronic funds transfers between two financial institutions in the United States. These generally take a single business day to complete and are more affordable, with the sender often paying between $15 and $30 and the recipient paying between $0 and $15.
International wire transfers are more complex, given different countries’ regulations and currencies. Expect the fees to be higher for international wire transfers, often between $35 and $50 for the sender and $0 and $30 for the recipient. In addition, prepare for these to take a few days (even up to five) to process.
Information Needed for a Wire Transfer
To complete an outgoing wire transfer (that is, to send money to someone else via wire), you’ll need to supply some information, including:
• The recipient’s full name and contact information (such as their address and phone number)
• The recipient’s bank account and routing numbers (or, for international transfers, SWIFT/BIC and IBAN numbers).
As the sender, you’ll also need to provide:
• Your name and contact information (often along with a government-issued ID or driver’s license)
• The funds for the transfer (either physical money or your bank account information)
• Your name and phone number
• Any fees to cover the wire transfer service.
Recommended: ACH vs. Wire Transfers: Which Should You Use?
Advantages and Disadvantages of Wire Transfers
Wire transfers have both pros and cons to consider vs. other payment methods. The table below breaks down some of the benefits and drawbacks of using a wire transfer:
| Pros | Cons |
|---|---|
| You can wire large sums of money. | Wire transfers come with fees for the sender and sometimes the recipient. |
| Domestic wire transfers are fast, usually within one day. | International wire transfers take more time, typically taking a few days. |
| Wire transfers allow you to send money internationally. | You can’t reverse a wire transfer once it’s initiated. |
| Wire transfers are generally considered safe. | Fraudsters have developed a number of bank scams that utilize wire transfers. |
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Types of Wire Transfer Services
There are two main types of wire transfer services: bank and nonbank.
Bank Wire Transfers
A traditional bank wire transfer requires that both the sender and the recipient have a bank account. The sender will need to know the recipient’s bank account information to transfer money from their own bank account to the recipient. You typically either visit a local bank branch to initiate the wire transfer or use your bank’s online platform. Some banks and credit unions may even waive fees (or offer lower fees) to members.
After initiating the wire transfer, the sender’s and the recipient’s financial institutions will communicate through an electronic system, such as SWIFT, to securely complete the transfer.
Nonbank Wire Transfer Services
You don’t have to work directly with a bank to wire money. You can also use a nonbank transfer service, such as Western Union. To complete the transfer, you may visit a service location in person, fill out a form, and physically provide the money to the wire transfer service provider. Another option that’s often available is to complete the process online, drawing funds from your bank account. The funds can then be made available for pickup in person or be sent to the recipient’s checking account or to a mobile wallet on their phone.
SWIFT and IBAN in International Transfers
International wire transfers require a little more information than domestic transfers. In addition to providing your and the recipient’s basic information (such as name and account details), you’ll typically need to know the recipient’s SWIFT and IBAN codes:
• The SWIFT (Society for Worldwide Interbank Financial Telecommunication) code identifies the recipient’s bank. In this way, it acts like a routing number, but they are not the same. You may also see this referred to as a BIC (Bank Identifier Number).
• The IBAN (International Bank Account Number) code identifies the recipient’s account at their bank.
The U.S. and Canada do not use IBANs. For instance, someone wiring money from another country to the U.S. would instead need to know the recipient’s bank account number and routing number. Australia and New Zealand also use different codes.
Wire Transfer Fees and Costs
Wire transfer fees vary depending on the financial institution or nonbank wire transfer service you use, but they typically range anywhere between $0 and $50. Senders almost always must pay a wire transfer fee, though some banks and credit unions don’t charge fees to send, at least domestically. Recipients sometimes have to pay a fee as well, particularly for international wire transfers.
Typical wire transfer fees are as follows:
• Outgoing domestic wire transfers: $0 to $30
• Incoming domestic wire transfers: $0 to $15
• Outgoing international wire transfers: $35 to $50
• Incoming international wire transfers: $0 to $30
The Takeaway
Wire transfers can be an effective way to electronically transfer money between individuals and/or businesses, both domestically and internationally. While you’ll often pay a fee to initiate a wire transfer (and sometimes to receive one), this payment method has several advantages, such as its speed and the ability to send large sums of money.
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FAQ
How long does a wire transfer take?
Domestic wire transfers typically process within 24 hours; if you time it right, the transfer may even complete in the same day. International wire transfers take a little longer, usually between one and five business days, depending on the country to which you’re wiring money.
Are wire transfers safe?
Wire transfers are typically considered to be a safe way to send money, as long as you know the recipient and have their correct information. However, many fraudsters use wire transfers in a number of common bank scams. To avoid this risk, never wire money to a person you don’t know, and educate yourself on common fraud tactics.
Can I cancel a wire transfer?
You cannot cancel a wire transfer once you have initiated it. Thus, you should always make sure all the information is correct before initiating a wire transfer.
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