Bank transfers make sending money easy and convenient
Wire transfers allow you to send money electronically from one person or entity to another. Money can be transferred between banks in the United States and between international and non-bank financial institutions.
Wire transfers are preferred in situations where a large amount of money needs to be transferred or you are the recipient of a large payment. Sending or receiving a wire transfer may involve fees and the time required to process the transfer may vary.
What is an electronic wire transfer?
A wire transfer is an electronic transaction that you can initiate through your bank or a non-bank wire transfer provider such as Western Union.1 When you make a wire transfer, you authorise the bank or wire transfer provider to transfer money from your account to another person’s account through an electronic payment network.
A wire transfer to an individual or a company does not involve the exchange of physical currency. An electronic transfer can be a quick and convenient way to send or receive money. Depending on the financial institution, wire transfers can be processed within a few hours, but can sometimes take several days.
Wire transfers are often used in situations where large amounts of money need to be moved. For example, if you are buying a house, your lawyer may ask you to transfer the down payment and closing costs to his account. If you are selling a house, the proceeds of the sale can be delivered to you by bank transfer. If necessary, smaller amounts can also be transferred by bank transfer.
How to wire money
The process of transferring money is quite simple. The most important things to keep in mind when making a transfer are:
- Limits on the amount of money you can transfer, if any
- Transaction limits on the number of transfers you can make per day
- Processing times for transfers
- Transfer fees
Banks and other money transfer service providers may charge fees for sending and receiving transfers. As a rule, fees for international transfers are higher than those for domestic transfers. Banks may also limit the number of transfers that can be made in a certain period of time or the amount of money that can be sent per transfer.
Here are the four most important steps in an electronic transfer.
- choose a transfer provider
The first step in transferring money is to decide which service to use for this process. If you already have a current, savings or other account with a particular financial institution, your bank may be your first choice. Depending on the bank’s transfer policies, you can order a transfer online or go to a branch in person.
The other option is to use a non-bank transfer provider, such as Western Union or MoneyGram. These companies allow you to send money by wire transfer to a bank account, but the person you are sending the money to also has the option of collecting it in cash or sending it via a mobile payment app.
- provide details of the transfer
When making a transfer, the bank or transfer provider needs certain information to complete the transaction. These include:
A copy of your government-issued identity document
Your source of funding (debit card, credit card or bank account – or cash if you are transferring the money in person to a non-bank provider)
Name and address of the recipient of the transfer
Name and address of the recipient’s bank (if you are transferring money to a bank account)
Recipient’s account number and postcode (again, if you are transferring money to a bank account)
Recipient’s mobile phone number if you are transferring money to a mobile wallet application.
If you are transferring money to another bank, you may also need to provide a SWIFT (Society for Worldwide Interbank Financial Telecommunication) code. This is a unique code assigned to banks and may be required for domestic and/or international bank-to-bank transfers.
- check the terms and conditions and pay the transfer fee
As already mentioned, you will most likely have to pay a fee for transferring money, regardless of whether you do it through a bank or a non-bank operator.
If you transfer money from a bank account, the fee will automatically be deducted from your balance, along with the amount to be transferred. If you use a transfer service from another bank, the fee will be deducted from your bank account, debit card or credit card, depending on the payment method.
If you are not sure about the cost of a transfer, ask for a list of fees in advance. Compare the fees between your bank and a non-bank transfer provider to see which is the cheapest. Before signing the transfer, it is also a good idea to read the small print to ensure that you fully understand the contract.
- wait for the transfer to be processed
Once you have sent a wire transfer, you may have to wait a few hours or a few days before the transfer is processed and sent to the recipient. The time required depends on where you send the money and the amount.
It is advisable to obtain a confirmation number from your bank or money transfer company. This way you can refer back to the transaction later in case of problems.
Is it possible to cancel an electronic transfer?
When you initiate a money transfer, the money is usually transferred immediately from your account to the recipient’s account. This assumes that the transfer takes place during normal business hours.
However, if the transfer is still indicated as ‘scheduled’ in the bank’s processing system, it is possible to cancel the transaction. You can do this via online banking or by calling a branch.
For international transfers, the cancellation time may be slightly longer. For instance, you have up to 30 minutes after initiating the transfer to ask your bank to cancel it. However, this rule may vary from bank to bank. You should therefore ask your financial institution how they handle cancellations.