All About Bank Transfers – Forbes Advisor
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When you need to send money fast, wire transfers can help get it where it needs to be safe.
Although the cost is slightly higher than common ways of sending money between people, there is little waiting for transfers to happen and availability of funds is usually immediate.
What are wire transfers?
A wire transfer is a term that describes the electronic transfer of money. Most often, the term “wire transfer” refers to wire transfers, which transfer money between banks using networks such as Fedwire or the Society for Worldwide Interbank Financial Telecommunication (SWIFT).
The term “wire transfer” dates back to the days when long distance communication was done by wire. To send money over long distances, customers would go to a telegraph office and make their payment. The telegraph office would then send a coded message to the telegraph office closest to the addressee. This coded message authorized the release of funds to the person on the other end.
How do wire transfers work?
Today, wire transfers occur in a number of ways beyond the telegraph wires of yesteryear. Regardless of the type of wire, there is always a send and receive part and an entity in the middle that makes the transfer easier.
When making a transfer through your bank, you usually need to provide the following:
- Recipient’s name
- Recipient’s bank account number
- Recipient routing number
- Amount of money to transfer
If you’re making a bank transfer through a non-bank provider like Western Union or MoneyGram, you’ll usually need the recipient’s name, phone number, and address.
Whether you’re using a bank or a third-party wire transfer provider, you’ll need secured funds to initiate your transfer. This means that the money you send must be prepaid, funded from your bank account, or in cash same day loans.
What are the types of wire transfers?
Wire transfers are either domestic, which means they are transferred within the same country, or international, which means the transfer moves between two separate countries.
It is important to know that wire transfers, both domestic and international, are subject to bank review.
Banks must report all wire transfers over $ 10,000 using a Currency Transaction Report (CTR) and submit it to the Financial Crimes Enforcement Network (FinCEN). Banks are also responsible for reporting any suspicious activity, such as a customer trying to send multiple bank transfers under $ 10,000 to prevent the transaction from being reported. Suspicious bank transfers are reported using a Suspicious Activity Report (SAR) and filed with FinCEN.
If a bank fails to deposit the necessary CTRs and DASs, it could face fines for violating banking regulations.
How much do wire transfers cost?
All wire transfers generally have a processing fee. These charges vary by provider, but as a general rule, domestic cables will cost less than international cables. Inbound domestic wire transfers cost around $ 15, while outbound domestic wire transfers range from $ 25 to $ 30 or more. Outgoing international transfers can cost anywhere from $ 45 to $ 50 or more.
Many US banks have made a habit of waiving fees for inbound transfers and only charging account holders when sending a wire transfer. Be sure to check with your financial institution to see if their accounts in general or your particular account level offer wire transfer fee waivers or reduced fees. You may also find that your bank charges a reduced wire transfer fee if you initiate the transfer through your online banking portal rather than going to a branch and initiating the transfer in person.
When sending a wire transfer through a non-bank provider, the fees usually depend on the amount of the wire transfer and several other factors. Non-bank providers have several additional fees that can impact the cost of a wire transfer, including:
- How you finance your transfer. There are different fees for using credit cards, debit cards, and financing directly through your bank account.
- Loyalty programs. Customers can earn points when they send money and then redeem points for a reduced fee.
It is recommended that you verify all charges before initiating a transfer.
How long does it take to send / receive money by wire transfer?
When sending money by wire transfer, transmission times vary.
If you send money to the country via a wire transfer using Fedwire or SWIFT, many transfers are made on the same day, often within hours. There is usually a cut-off time for same-day bank transfers, which means that if you initiate your transfer at that time, your bank will guarantee that the funds reach your recipient on the same day. Threads launched after this time may take up to the next day to process.
International wire transfers can take longer than domestic wire transfers because multiple banking systems are involved. For example, an international wire transfer initiated from the United States to France would involve a United States-based fund clearinghouse and a France-based fund clearing house. This extra step means extra processing time.
When using non-bank wire transfers, the processing time varies depending on where the money is received. A wire sent from Ohio to Texas can be ready in as little as 10 minutes, while a wire sent from Ohio to Poland can take up to 24 hours. Speed depends on several additional factors such as local banking laws, availability of funds, and system availability (if there is an outage on the non-bank provider’s system that delays the transfer).
When the wired funds arrive at their destination, there is usually no hold, so the funds are available immediately.
How secure are wire transfers?
Compared to sending a check in the mail, wire transfers are considered an extremely secure way to transfer money. Wires are secure transactions initiated by authorized personnel at your bank or non-bank wire transfer service. Once they are started they cannot be undone. However, this does mean that consumers should be hypervigilant when it comes to knowing who they are sending money to.
Many scammers try to trick consumers into wire money instead of sending a check or using a credit card because wire transfers cannot be reversed or canceled once initiated. The only exception to this rule is international wire transfers, which can be canceled within 30 minutes of initiation.
What are the other types of wire transfers?
Some electronic funds transfers are called wire transfers, but are not processed by the more common banking and non-banking networks described above. These include:
- ACH Transactions, processes through automated clearinghouse, such as electronic checks and bill payments
- Peer-to-peer payment tools, like Paypal, Cash App or Venmo, which allow you to send money directly to people, often without a bank account
When you search for the best way to send money, it’s a good idea to go through all the options, from wire transfers to P2P payment tools, to find the safest and most cost-effective solution for your transaction.
Wire transfers are safe and secure and can help get your money to its intended recipient in a very short time. While the cost may be higher, you’ll have peace of mind knowing that your money will arrive on time and be ready to use without the bank deductions that come with checks.