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The Ultimate Guide To Wire Transfers

The Ultimate Guide To Wire Transfers

Due to the popularity of the Internet and electronic transfers, the term “Wire transfers” has become a little polluted and confusing. That is why we have created our ultimate guide to wire transfers. It explains what wire transfers are, what they used to be, what they are traditionally defined as, and how they compare to other types of electronic funds transfers. Our ultimate guide to wire transfers will answer every question you have ever had about wire transfers.

What Is A Wire Transfer?

According to  Wikipedia, the term “Wire Transfer” means the electronic transfer of funds from one entity to another. It may also be called a bank transfer, or a credit transfer.

According to The Balance, a traditional wire transfer is the transfer of funds from one bank or credit union to another bank or credit union.

According to Investopedia, a wire transfer is the transfer of funds from one financial institution or bank to another. Such transfers are known under US law as remittance transfers. However, these days the term wire transfer refers to any electronic transfer of money from one entity to another.

What Is A Wire Transfer Compared To Other Transfer Types?

To clear up any confusion, here is the difference between wire transfers and other types of electronic funds transfers. Hopefully, the concept of wire transfers will become a little clearer once you understand how it differs from other types of electronic funds transfer.

What’s the Difference Between Direct Deposit And A Wire Transfer?

A direct deposit is slower than a wire transfer, and it is often cheaper too. With direct deposit, you are limited to your own currency, whereas with a wire transfer, you may transfer and convert money at the same time. Many times a wire transfer is immediate when sent nationally, whereas direct deposits are done overnight within one or two days.

What Is The Difference Between A Wire Transfer And An ACH Funds Transfer?

Instead of a bank communicating with another bank, they send a list of transfers to an automated clearing house. The ACH completes the transfers overnight on behalf of the bank. Credit unions and other financial institutions may use an Automated Clearing House too.

ACH is cheaper than wire transfers are because banks do not have to communicate with each other directly, which saves on processing time for the bank. Instead of the bank doing the transfer work, they pass the work on to the ACH. Direct deposits are done via an Automated Clearing House.

What Is The Difference Between A Wire Transfer And An Electronic Funds Transfer?

An electronic funds transfer is an umbrella term for any sort of funds transfer where the Internet is used in some way. For example, a wire transfer may be considered an electronic funds transfer, just like a third-party transfer (like with PayPal) may be considered an electronic funds transfer. An electronic funds transfer is also called an EFT.

How Long Do Wire Transfers Take

It all depends on the type of transfer you are trying out. For example, one bank may transfer money to another bank in the same country almost instantly. Others may take a few hours.

Many wire transfers will happen the same day. If you are transferring money aboard, then it may take up to two days. In some circumstances and with some transfer companies, your conversion and transfer may take between two to four days or maybe even two to seven days.

Third party companies such as PayPal, Skrill, Google Wallet and so forth will often transfer funds from one account to another instantly or within two to four hours. Withdrawals from third-party online accounts such as PayPal will often take just a few minutes.

Direct deposits and any form of AHC transfer will take as long as overnight because of how they work. Banks submit their transfers at the end of the day, and the AHC makes the transfers either during the night or the next day.

Why Are Wire Transfers Faster?

The speed of your wire transfer depends on the company conducting the transaction. It involves communication at both ends, which means both banks or entities have to be quick in order to have your money sent and received quickly.

These days, banks conduct much of their business digitally, which means that banks may take just seconds to communicate with each other. If you send a wire transfer online from your bank to another bank, then it may only take minutes because a computer program sends the funds and another computer program receives them.

Transfer companies are able to send wire transfers as quickly as banks and credit unions are. If your bank is slow or sluggish about wire transfers, then a wire transfer company may be quicker.

Many wire transfer companies will convert your money into a different currency. If they are converting your currency, then it may take a few hours or up to two days.

How Much Do Wire Transfers Cost?

The way they are priced depends on a few factors. Good transfer companies will charge you a percentage fee based on how much you are sending, and they will charge you a standard fee for the transfer.

When a transfer company charges you a percentage fee, it means you pay a higher fee if you send more money. Some transfer companies lower their percentage fee if you send more money rather than less.

A standard transfer fee is simply the amount the transfer company charges you to send your money from point A to point B. It is really up to them how much they charge you as their standard fee.

Currency conversions will often cost more than people realize because some transfer companies will skim money from the exchange rate. That is why we often advocate companies such as Transferwise because they give you the real exchange rate and they are transparent about their fees.

Which Are The Best Wire Transfer Companies Wire Transfers In The USA?

There are quite a few companies, banks and credit unions to choose from. Our list includes transfer companies and banks that do the job quickly, safely, and without charging you the earth.

TransferwiseWells FargoBB&T
TD BankWestern UnionCitibank
CurrencyfairU.S. BankBank of America
SunTrust BankChaseMoneygram
Capital OnePNC Bank


Our ultimate guide to wire transfers doesn’t review each transfer company individually because it would turn this humble article into something resembling an e-book. If you are interested in which wire transfer companies are currently riding high, then take a look at a few of our in-depth reviews.

How Safe Are Wire Transfers In The USA?

The process itself is fairly safe. Legitimate transfer companies have very strong encrypted networks, and your money is safe as long as you give your details correctly and the correct details of the recipient.

Wire transfers are popular with scammers because they allow the criminal to gain access to the money quickly. The transaction is very difficult to reverse, which is another reason why criminals will do whatever it takes to convince you to wire money to a fake company or a stranger.

How To Wire Transfer?

If you bank with a bank that allows wire transfers, then creating and sending a wire transfer is very easy. The reason why some people stay away from banks is because their fees tend to be higher and their exchange rates are less than favorable. If you want to send a wire transfer via your bank, then the steps involved should look something like this:

[+] Log in to your internet banking account
[+] From their menu you select “Wire Transfers”
[+] Click on “Continue to Wire Transfer”
[+] Click on the wire transfer request form
[+] Enter recipient’s banking information
[+] Enter recipient’s name and bank account number
[+] Maybe enter the recipient’s address
[+] Enter recipient’s bank ABA Routing Number or SWIFT Number
[+] Enter the bank’s name and address
[+] Take a look at the fee
[+] Check what you have written
[+] Confirm the transaction

If you are using a simple bank transfer, then you may only need the recipient’s name, account number, a reference number, and maybe a little more banking information. With bank transfers such as these, you may be able to send money to other people without having to pay a charge.

How To Sign Up With And Use A Wire Transfer Company?

In a town stands a man, and he wants to transfer money to his wife who is stranded in another country. He could sign up for a bank account, but that will take a long time, which means it will be a while before he may send a transfer to his wife. Instead of using a bank, he decides to use a transfer company.

The man in not very spoilt for choice in town because all he sees is a Western Union shop on the corner, so he hops onto the Internet and discovers he has plenty of choice. He decides to try Transferwise, and here is what he does.

Visit the Transferwise website

Here is a link to the Transferwise homepage.

Technically, Transferwise is NOT a wire transfer company — you wire the money to Transferwise, select a target bank account, and Transferwise converts the currency into the target currency and delivers the transfer to the target bank account.

Transferwise Currency Conversion

Want to send money abroad or convert currency? We recommend using Transferwise to get the best rates. Use the Transferwise calculator below to see what your exact conversion is.

They do not ask that you sign up right away. You may use their conversion tool first. Click the flags to select the currency you have and the currency you wish to convert to. Enter the amount of money you have in the box at the top and the box at the bottom will show you how much money your recipient will receive.

1 - Visit the Transferwise website

Enter the amount you wish to send

Click the “Get Started” button and it will take you to a screen that asks you how much you would like to send. Enter how much you would like to send and you will see exactly how much your recipient will receive. That is the total amount that will be received, there will be no other fees or conversion costs added. If you are happy with the amount, click on the green button that says “Continue.”

2 - Enter the amount you wish to send

Is This A Personal Or Business Transfer?

With our example with the man in town, it is a personal transfer, so the “Personal” button is clicked. You need only click the “Business” button if you are running a business, making a business transfer, or are transferring money from your business account.

3-Transferwise - Is this a personal or business transfer

Who Are You Sending Money To?

If you wish to convert money and place it in one of your accounts, then click the “Myself” button. On the image below the “Myself” button says AG. That is because I am using my account (Ashley Gaynor) and it has used my initials.

Our example features a man on the Internet looking to send money to his wife, so we would click the “Someone Else” button. Otherwise, if you are sending money to a business or charity, then click the button of the same name.

4 - Who are you sending money to

Tell Us About Yourself

At some point, Transferwise needs you to sign up. It seems to happen at different stages in the process depending upon how you go about your transfer. In this case, it asked me for my details after I had chosen to send money to somebody else. It has you give your details, which is pictured below.

5 - Tell us about yourself

Sign Up With Your Email Address

As mentioned earlier, it will ask you to sign up, but it seems to do it at different stages depending upon how you go about your transfer. For example, if you do not click the green button after using the quotation tool on the homepage, you can click the sign up button and do the email and password bit first.

Once you have given your email address and you have come up with a password, they will send you an email to confirm your email address and so that you may mark it as safe so their Transferwise emails do not end up in your junk folder again. Below is an image of a welcome email from Transferwise. It shows you the sort of message you will receive when you sign up.

 6 - The welcome email from transferwise

Enter The Recipient‘s Details

Continuing on with your transfer, the website will ask you for your recipient’s details. You will need your recipient’s bank details and full name. Fill out the form on the screen with all the details you require, and decide if you wish to store the information.

If you store your recipient’s information, then you need only click their name or icon the next time you wish to send money. The image below shows what the screen looks like when you have more than one recipient saved onto the system.

 7 - Sending money with transferwise

How Would You Like To Pay?

At some point, the system will ask you how you would like to pay. The options you see will differ depending upon whichever country you are sending the money from. For example, if you are in the United Kingdom, it will not allow you to send US dollars to any other country than the US. How Transferwise lets you pay will depend on your country.

What you see on your screen may differ slightly from the image you see below. For example, if you are sending money from the USA, then you may not see the SOFORT option that is listed on the image below. Note that you can cancel the transfer at any time by either giving up on the process, or clicking the “Cancel Transfer” button on the right.

8 - How would you like to pay

Confirm, Pay And Transfer

Enter your payment details, confirm the details you have entered, pay into the system and transfer the money. The amount you saw on the quotation tool is exactly how much will be sent. The only time it alters is if you have waited a few days and the exchange rate has changed a little.

Your Home Screen

The image below shows what your account looks like when you sign in again. Once you have an account, you may sign in to see your home screen. It is a very basic interface that allows you to complete your profile, it gives you the option to send money, and the option to receive money.

9 - Your home screen

How Does Transferwise Offer Such A Good Rate?

They make their money from the fee they charge, but the fee is so small that people wonder if the company is skimming from the exchange rate. They are not skimming from the rate, they always offer the market rate for the money they transfer. Transferwise is such a large company that it has customers all over the globe. The image below shows you how their money-conversion system works.

Ultimate Guide To Wire Transfers - How transferwise works

How Long Will It Take?- Here Is An Unhelpful Answer

I don’t know how long it is going to take for you to transfer money as a new customer. If you have already signed up with a transfer company, then it will take you moments to create the transfer, and it may take between seconds and few days for the transfer to go through.

If you do not have an account with a bank or wire transfer company, then the sign up process may be time-consuming, and the transfer company may require a lot of identification authorization before allowing you to transfer. I cannot tell you which will do which because how long it takes for new accounts to be verified and authorized will depend on things such as the company itself, your method of identification, their methods of authentication, your country, the recipient’s country, and the currency being exchanged.

What Is The Fastest Way To Transfer And Convert Money

If we are talking transfers alone, then bank transfers, wire transfers, and even third-party wallet transfers (such as PayPal) are almost instant. If you wish to transfer money abroad and convert your currency, then it is going to take longer.

Use your bank if you already have an account because they will probably be the quickest and most secure option. To balance that fact, they will charge the heftiest fees, and the amount they skim from the conversion rate will vary from bank to bank.

A cash collection service may allow you to send money quickly if you do not have any wire transfer accounts at all. If this is the first time you have ever wished to transfer money, and you have no transfer accounts and your bank won’t send the transfer, then go to a cash collection service. Fill out a form, show your ID to the teller, they give you a reference number and you give that reference number to the recipient so that he or she may draw out the money. If you make a cash deposit in the shop with a company such as MoneyGram or Western Union, then the money transfer is very quick.

If you have an account with a wire transfer company, but they still take a few days to transfer money. You may try their express service. There may be a good reason why most of the transfer companies take their time when making your transfers. Or, it may be that you have picked a poor quality transfer company. Nevertheless, one option is to use your wire transfer company’s express service.

Wire Transfer Scam Warning Signs

Many online and offline scams involve wire transfers in some way because wire transfers give criminals their money very quickly, and they are very difficult to reverse. Here are a few warning signs that what you are engaging in may be a swindle.

[O] You are being contacted by a TTY service that is used for the hearing impaired because they make voice recognition impossible to trace. They usually follow up this contact with emails.

[O] The email or caller is from overseas. You shouldn’t wire money to a person unless you know who they are. Preferably, you should have known somebody a long time before you consider wiring money to him or her.

[O] You are told that a Money Transfer Control Number (MTCN) or confirmation code is needed before your money may be withdrawn. If you are told this, then it is a lie. If you are wiring money, it can be picked up right away without the need for a MTCN or confirmation code.

[O] You were sent a check for more money than was first agreed. The con artist asks you to wire the overpayment back. The check you received then bounces and you lose whatever money you wired to the con artist.

[O] You have been asked to wire money. Most cons or scams include a request for you to wire money. If you are dealing with somebody you do not know, then find another method besides sending cash or sending a wire transfer. If the problem/deal/sale is time limited–then it is probably a scam. Scammers try to force you to send the money sooner rather than later.

Types Of Wire Transfer Scam

Boy-oh-boy, there are many different types. Here is a short list of some of the most common ones kicking around at the moment.

Classified ad purchases and fake buyers

They send a fake check for too much money and ask you to wire back the excess. If you run a business, they may pay with a stolen credit card, and you lose out when the card transaction is revered.

Classified ad purchases and fake sellers

They insist that the only way you may buy is with a wire transfer. Don’t do it, use something such as PayPal where you may contest the payment if the item doesn’t arrive.

Fake lotteries and fake sweepstakes

They say you have won something, but that you need to wire money for processing fees. You may also be unaware that it is illegal for US citizens to play foreign lotteries while stood on US soil.

Your relative needs help

They call, email, or send instant messages saying they need help. They ask you to wire money, and usually ask that it be sent to a friend or company. Usually, it simply means your relative has been hacked.

Fake Facebook, Twitter or Google+ profiles

You receive a request from somebody you know or a relative where they ask you to send them money. It comes from a social media profile that has a profile photo with the person you know. However, the profile was set up as a scammer and only the photo of your friend/relative was used.

Expensive orders

Stolen credit cards are used to make expensive orders of things such as wedding cakes or high-end merchandise that is hard to ship. They pay with stolen a credit card, which includes money for shipping. They ask you to wire the shipping money to their personal collections/delivery driver. The card purchase is discovered and reversed by the bank and you lose whatever money you wired.

Advance-fee loans

There are lots of these. You may have been asked to take an IQ test to get a job, but they want you to wire the application fee for the IQ test to them. You may have submitted a loan application, and they want you to wire the advance fee to them. Another scam is that they want you to pay for your own credit check.

Work from home jobs

You should never have to pay to work from home. The only direction the money should flow is from the employer to you. There is no such thing as a legitimate work-from-home job where the employee has to pay anything. If you are sent a check and are asked to keep some of the money and wire the rest–then it is a scam and you shouldn’t try to cash the check.

Mystery shopping jobs

You shouldn’t have to pay money in any shape or form to be a mystery shopper. As an employed/hired person, you shouldn’t even have to pay for the thing you are tasked with buying. You shouldn’t have to use your bank account, and you definitely shouldn’t have to wire money to anybody.

Conclusion – Our Ultimate Guide To Wire Transfers

We created this ultimate guide to wire transfers in order to answer every question you may have about wire transfers. Obviously, we cannot get into specifics about what each wire transfer company offers and what they charge, but we have tried to answer every question we could think of. If you have any further questions that are not company-specific, then drop us a message via the comment section and we will try to answer it here.

About The Author

Ash The Great

After a varied career in different industries from the hospitality industry to the financial consultancy industry, Ash now spends his days working as a professional writer.

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