It would seem that there are more and more ways to send money, with new methods popping up regularly. Using Zelle, ACH payments, or initiating a transfer through your bank itself have become common practices.
One of the oldest methods of transferring money without using paper or goods is wire transfers. These have been used regularly since the 1870s and, believe it or not, wire transfers are still frequently used today.
What is a wire transfer?
A wire transfer is a way to send money electronically between banks. The term itself originated because these transfers used to be sent via telegraph lines. However, today money is usually transferred through a network like Fedwire or the Society for Worldwide Interbank Financial Telecommunication.
When do you use a wire transfer?
When you are doing a transaction with a bank you may need to use a wire transfer. For example, if you’re buying a home, this method may be necessary for the downpayment, or if you’re the seller, you may be the recipient ofone.
Additionally, if you’d like to send money across the country (or even to a different country) using a wire transfer can help you get the money exactly where it needs to go and get it there quickly.
If you need to send a large amount of money quickly, a wire transfer might be the best way to go. Banks can hold checks over $1,500 for up to ten days, meaning that the recipient won’t have access to their money. In a situation where time is of the essence, wire transfers save the day.
How long does a wire transfer take?
These transactions can be completed in a matter of minutes, or it may take several days. Some of the factors that affect the length of time include:
- Bank holidays
- Bank cut-off times for receiving wire transfer orders
- International transfers take longer than domestic transfers
The Expedited Funds Availability Act requires banks to make wire transfer funds available for withdrawal the next business day after receiving the funds.
To expedite the process, check with your bank about their cut-offs for wire transfers before initiating a transfer. By getting your transfer started before their daily cut-off time, your transfer could arrive a day sooner.
What information do you need to make a wire transfer?
Another way to get your transfer completed faster is to make sure you have all of the information you need. You’ll need quite a bit of information to initiate a wire transfer. Once the process has started, they cannot be canceled, so you’ll want to double-check that you have all of the information exactly correct.
Before initiating a wire transfer, you’ll need:
- Your bank account number
- The recipient’s full name
- Their bank name and address
- Their bank account number and routing number
You may need your driver’s license or other government-issued identification to make the transfer. Be sure to check the bank or wire company’s documentation requirements ahead of time, especially if you’re making the transfer in person.
What fees are involved?
Wire transfers almost always have fees associated with them. Usually, both the sender and the recipient have to pay fees.
However, the amount of the fees involved can vary wildly, so it’s worth doing your research to see how much the transfer will cost you and the recipient.
Some banks charge a fee that is based on a percentage of the money transferred. Larger transfers may end up costing significantly more than smaller transfers, meaning you have to cough up even more money to get the funds from one place to the other.
Wire transfer companies may charge a flat fee for any amount, or the fee may increase as the amount goes up. Whichever sending method you choose, calculate the fees ahead of time to ensure you have enough in your bank account to cover both the transfer and the fees. If the person you’re transferring to needs a certain amount of money, check into the fees on their end so you can make sure they get the full amount they need.
Wire transfers are a great way to send money between banks. While there may be a fee associated with the transfer, the transfers are quick and the recipient won’t have to wait to access the funds once they are received. You can make the process quicker by being prepared with all the information and documents you need, and save yourself some money by researching fees before deciding whether to use a bank or a wire transfer company.