Wire transfers are useful because the money moves within one or two days. Within the United States, same-day transfers are possible, and international transfers take an extra day or two.
Unlike some electronic payments, bank wires cost money. Depending on whether it’s outgoing or incoming, international or domestic, and the type of bank account you own, wire transfers can cost up to $50. Some banks waive incoming wire fees. There may also a limit to the amount you can send.
However, some electronic payments can be reversed. Thieves like to take advantage of customer confusion by promising to send a wire transfer but actually sending money using a different (reversible) method.
A wire transfer is an electronic transfer of money. A traditional wire transfer goes from one bank or credit union to another using a network such as the Society for Worldwide Interbank Financial Telecommunication (SWIFT) or Fedwire.
The term “wire transfer” is often used for various types of electronic transfers that typically aren’t as instant or as safe as bank wire transfers, as described above. In fact, almost all payments are electronic (even checks get digitized).
Wires can be completed in one day, depending on how early you submit your request to send money. It may take several hours for the receiving bank to show the wire proceeds in the recipient’s account—even if the money is at that bank. A bank employee may just need to complete several tasks to make the funds available.
Because the money moves quickly, the recipient should not have to wait for funds to clear before claiming or using the money. In other words, there is usually no hold placed on money received via wire transfer. For anybody selling merchandise or services, a wire transfer is safer than a check. Checks can bounce, and it can take several weeks (or more) to find out that a payment was bad.
Some money transfer services (like Western Union) operate independently—you can bring cash for an in-person transfer and the recipient will walk out with cash. The recipient is identified with a phone number or email address.
If somebody asks you to wire funds, think carefully about who you’re sending to. Some transactions are especially risky. For example, if you wire money to an office that pays out the proceeds in cash (such as a retail “money transfer” shop in a strip mall, Western Union, or similar), it is harder to verify who got the money. Anybody with a fake ID can collect the cash.
A wire transfer is an electronic transfer from one bank or credit union to another. Learn about the speed, security, and costs of wiring money.