What Is A Wire Transfer?

When you need to send money fast, wire transfers can help you get it where it needs to be safely and securely.

While the cost is slightly higher than common peer-to-peer ways of sending money back and forth, there’s little waiting for transfers to happen and funds availability is usually immediate.

What Are Wire Transfers?

A wire transfer is a term that describes the electronic transfer of money. Most commonly, the term “wire transfer” refers to bank wires, which transfer money between banks using networks such as the Fedwire Funds Service (Fedwire for short) or Society for Worldwide Interbank Financial Telecommunication (SWIFT).

The term “wire transfer” goes back to when long-distance communication was done over telegraph wires. 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 recipient. That coded message authorized the release of funds to the person on the other end.

What Are the Types of Wire Transfers?

Wire transfers are domestic or international, depending on where the transfer originates and its destination.

Domestic Wire Transfers

Domestic wire transfers are sent and received in the same country of origin. For example, a wire sent from a bank in New York to one in California would be considered a domestic wire.

International Wire Transfers

International wire transfers are those where the sending and receiving banks are located in different countries. For example, if your U.S.-based bank or credit union sends a wire transfer to a bank in Germany, it’s considered an international wire transfer.

Other Types of Wire Transfers

Some electronic funds transfers are referred to as wires but not processed through the most common bank and nonbank networks outlined above. These include:

• ACH transactions. These types of transactions process through the Automated Clearing House, like electronic checks and bill payments
• Peer-to-peer payment tools. Paypal, Cash App and Venmo allow you to send money directly to people, and you may not need a bank account.

When looking for the best way to send money, it’s wise to review all the options—from wire transfers to P2P payment tools—to find the safest and most cost-effective fit for your transaction.

How Do You Initiate a Wire Transfer?

Today, wire transfers happen in a wide variety of ways beyond the telegraph wires of yesteryear. No matter the type of wire, there’s always a sending and receiving party and an entity in the middle facilitating the transfer.

When you initiate a wire through your bank, you’ll generally need to provide the following:

• Recipient’s name
• Recipient’s bank account number
• Recipient’s routing number
• Amount of money to be transferred

If you initiate a wire transfer through a nonbank provider like Western Union or MoneyGram, you’ll typically need the recipient’s name, phone number and address.

Whether you’re using a bank or third-party wire transfer provider, you’ll need guaranteed funds to initiate your transfer—the money you’re sending needs to be paid up front, funded either by your bank account or cash.

How Do You Initiate a Wire Transfer Online?

To start a wire transfer online, you generally need to log into your bank account and navigate to the section for transfers. From there, you’ll enter the information mentioned above and transfer funds online without ever having to visit a branch.

How Much Money Can You Send via Wire Transfer?

Banks and credit unions set their own maximum daily limits for wire transfers. However, it’s important to know that wire transfers, both domestic and international, are subject to bank scrutiny.

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 wires below $10,000 to avoid having the transaction reported. Suspicious bank wire activity is reported using a Suspicious Activity Report (SAR) and filed with FinCEN.

If a bank fails to file the necessary CTRs and SARs, it could be subject to fines for violating banking regulations.

How Much Are Wire Transfer Fees?

Wire transfers typically have processing fees. These fees vary by provider, but a good rule is that domestic wires will cost less than international wires. According to Forbes Advisor’s checking account fee survey, the median incoming domestic wire transfer cost was $5 in 2021, while the median outgoing domestic transfer fee was $25. Outgoing international wire transfers may cost $45 to $50 or more.

Many U.S. banks have gotten into the practice of waiving fees for incoming wires and only charge account holders when sending a wire transfer. Check with your financial institution to see if their accounts generally or your particular account tier offers wire transfer fee waivers or reduced fees. You could also find that your bank charges a reduced wire transfer fee if you initiate the transfer through your online banking portal rather than visiting a branch and initiating the wire in person.

When sending a wire transfer through a nonbank provider, fees generally depend on the wire amount and several other factors. Nonbank providers have several additional fees that can impact the cost of a wire, including:

• How you fund your wire. There are different fees for using credit cards, debit cards and funding directly through your bank account.
• Loyalty programs. Patrons can earn points when sending money and then redeem points for reduced fees.

It’s good to check all the fees before initiating a transfer.

How Long Does a Wire Transfer Take to Reach the Recipient?

When sending money via wire transfer, transmission times vary.

If you’re sending money domestically via a bank wire using Fedwire or SWIFT, many wires are completed the same day—often within a few hours. There’s usually a cutoff time for same-day wire transfers, which means if you initiate your transfer by that time, your bank will guarantee the funds will reach your recipient the same day. Wires initiated after that time may take until the next day to process.

When using nonbank wire transfers, the processing time varies according to where the money is being received. A wire sent from Ohio to Texas might be ready in as little as 10 minutes, whereas a wire sent from Ohio to Poland could take 24 hours. The speed depends on several additional factors like local banking laws, funds availability and system availability (whether there’s an outage on the nonbank provider’s system that delays the transfer).

There’s generally no hold when wired funds arrive at their destination, so funds are available immediately.

How Long Do International Wire Transfers Take to Reach the Recipient?

International wire transfers can take longer than domestic wires to process because more than one banking system gets involved. For example, an international wire initiated from the United States to France would involve a U.S.-based funds clearinghouse and a France-based funds clearinghouse. This extra step means extra processing time.

For those who frequently send money internationally, there are alternatives to international wire transfers to help keep fees down and speed funds along.

Are Wire Transfers Safe?

Compared to putting a check in the mail, wire transfers are considered an extremely safe way to transfer money. They are secure transactions initiated by authorized personnel at your bank or nonbank wire transfer service. Once initiated, they can’t be canceled. That means consumers should be hypervigilant about knowing the people who send funds.

Many scam artists try to entice consumers to wire funds instead of mailing a check or using a credit card because bank wires can’t be canceled or reversed once initiated. The only exception to this rule is for international wire transfers, which can be canceled within 30 minutes of initiation.

What Are the Alternatives to Wire Transfers?

If you’re concerned with fees but still need to send money quickly, there could be alternatives that lower costs and make funds move faster than a paper check.

Wire Transfer vs. Direct Deposit via Zelle

While they’re not “direct deposit” in the same way as your paycheck, apps like Zelle can quickly and immediately send funds directly between bank accounts. While most banks have daily limits on Zelle transfers, Zelle works with nearly any bank account (even if your bank doesn’t offer a partnership with Zelle) and there are no fees to send or receive money.

Wire Transfer vs. ACH

If you need to send or receive money quickly but can’t wait up to three days, the ACH system can help you avoid wire transfer fees and move money faster than a paper check. You can use your bank’s built-in transfer feature to add a recipient and process an ACH payment. You’ll just need their name and bank account number.

The Bottom Line

Wire transfers are secure and can help you get your money to whomever you’re paying with little delay. While the cost may be higher than some other payment methods, you’ll have peace of mind knowing that your money will arrive on time and be ready to use.

Frequently Asked Questions (FAQs)