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A wire transfer is an electronic method for moving money from one person or bank account to another. It allows you to send money quickly and safely without the need for physical cash. To make a wire transfer, the sender must provide information to their bank about the recipient's identity, their account number and the amount of money they're sending.
Wire transfers cost more and require more information than other methods of sending money, including peer-to-peer transfers that are free and done using an app, such as Venmo, PayPal or Cash. But you can typically send larger amounts with a wire transfer and choose from different payment and receiving options, including cash.
Types of Wire Transfers
There are two types of wire transfers: domestic transfers and international transfers (also called remittance transfers). Each of these varies in cost and delivery times.
| Domestic vs. International Wire Transfers | ||
|---|---|---|
| Domestic Wire Transfers | International Wire Transfers | |
| Definition | The electronic transfer of funds—sometimes from one bank to another—within the same country | The transfer of money from one bank account to another in a different country |
| Required information | Recipient's name, address, bank routing number and account number | Recipient's name, address, routing number, SWIFT code (a bank identification code) and account number; some countries require specific bank or account identifiers |
| Time to transfer funds | Within 24 hours | Up to five business days |
| Currency conversion? | Only involve one currency, so no conversions | May include a currency conversion, often with an added fee |
How Much Does a Wire Transfer Cost?
The cost associated with wire transfers depends on the individual bank or financial institution. Many banks charge not only to send a wire transfer (outgoing fees), but to receive one (incoming fees). The least expensive wire transactions are typically incoming domestic transfers, and the most expensive are outgoing international transfers.
For international wire transfers, the recipient's bank deducts around $8 to $10 from the amount of money wired to the recipient. Some banks may charge additional fees above the standard transaction costs, such as online versus in-person transfers, cancellation fees and correspondent bank fees. Make sure to check with your financial institution before doing a wire transfer to find out how much it will cost or what fees you may incur.
| Wire Transfer Fees | |
|---|---|
| Outgoing domestic transfer | $20 to $35 |
| Outgoing international transfer | $35 to $50 |
| Incoming transfer, domestic or international (to a U.S. bank account) | $0 to $25 |
How Long Does a Wire Transfer Take?
The time it takes for a wire transfer to settle typically depends on whether it's a domestic or international transfer. Domestic wire transfers generally take one day, while international wire transfers can take two to five business days.
There are a few reasons why transfers may take longer to complete:
- Weekends, holidays and after-hours transfers may prolong a wire transfer process. Banks and credit unions have designated cutoff times, which means they won't process a transfer on the same day if it's after a certain time. This can affect the delivery of your transfer. Your bank's website will have details about cutoff times for deposits, transfers and payments in its Help or FAQ section.
- Keep in mind that a wire transfer might get delayed if the bank sending the funds makes a mistake or you give wrong information for the transfer.
Pros and Cons of Wire Transfers
Wire transfers provide a fast and secure method of sending money electronically. But there are some disadvantages to this type of transaction to keep in mind.
Pros of Wire Transfers
- No cash needed: Wire transfers don't require you to have physical cash since the money is transferred electronically.
- Convenient for large amounts: Wire transfers are a relatively easy, quick and secure way to send large amounts of money to someone—either domestically or outside the U.S.—for things like making a down payment on a house or sending funds to a relative abroad.
- Secure: U.S. federal regulations require individuals to verify their identity and provide their physical address to open an account and use a wire transfer service. This makes it very difficult to move funds anonymously and prevents cases of wire transfer scams.
- Funds easily accessible: After a transfer is complete, the funds are usually available to the recipient for immediate use or withdrawal.
Cons of Wire Transfers
- Can be costly: The cost of wire transfers can add up, with fees up to $50 per transaction.
- Cheaper options: Alternative payment methods can be cheaper. For example, an ACH transfer can be done through your bank for domestic transfers. These are cheaper than a wire transfer, but may take longer—often more than a single business day—to process.
- Can't be canceled: Wire transfers generally can't be canceled once they are initiated.
Are Wire Transfers Safe?
Though wire transfers are generally secure, they are sometimes used in fraud schemes. Consumers should never wire money to anyone they haven't met in person. It's possible that a friend or family member seemingly asks you to wire them money in a Facebook message or email as a result of an online hack of their accounts. Consider an urgent request to wire funds or a confirmation code red flags.
Mortgage wire fraud is a common type of real estate cybercrime in the U.S., and typically happens when a fraudster tricks a homebuyer into sending a wire transfer for closing costs to a phony bank account. A hacker may send a fraudulent email to a homebuyer, posing as someone who's part of the transaction. The fraudster can then tell the homebuyer about a change in the wire transfer instructions and advise them to send money to a different bank account. Once swiped, the money is typically funneled to a fraudulent U.S. bank account and quickly withdrawn via cash or check.
Once your money is sent to a scammer through wire transfer, there's no way to get it back because digital wire transfers generally cannot be canceled. Scammers can quickly pick up your money at any of the wire transfer company's locations. To avoid these scams, only wire money if you know the person you're sending money to and you have discussed the transaction previously.
The Bottom Line
Wire transfers allow money to be sent between different banks. They're a relatively convenient way to send large amounts of money, both domestically and internationally. There are fees involved and wires may take some time to clear, especially if the money is being sent to someone in another country.