How To Wire Money? Stepwise Guide To Send Money Easily With Wire Transfers
Wire transfers are an easy and convenient way to transfer your funds safely and securely. Follow this article to get an all-in-one guide on wire transfers and how to wire money to get it transferred quickly.
A funds transfer is one of the essential elements of the finance sector. Wherever you may be and whatever you may be doing in life, you need to transfer money every once in a while. There are situations when you need to send or receive money fast. Maybe you need to send money to your child studying abroad so they can make it to the fee payment on time, or perhaps you are running out of time to pay your rent, so you need money fast.
There are numerous situations where you need to send or receive money fast, and bank transfers are not an option due to their time-consuming processes. This is where wire transfers come in. Wire transfers can help you get your money where it needs to be safely and securely in just a matter of time.
If you are new to the idea of wiring money, this guide is for you. In this article, you’ll get to know every detail about wire transfers, the basic concept of wiring money, how it has the upper hand on traditional bank transfers, and a stepwise guide on how to wire money in no time.
What is a wire transfer?
Wire transfer means to transfer funds electronically from one person or entity to another. It is one of the most effective and quickest methods to transfer money for various reasons including sending money to children abroad or receiving funds after a property sale. A wire transfer allows you to send tens of thousands of dollars abroad, even in a foreign currency.
The term “wire transfer” refers to the wires of the banks or wire transfer institutes that transfer money from one place to another using services such as Fedwire or SWIFT. The term has a deep connection with wires and dates back to the time when telegraph wires were used to carry funds over long distances.
Back then, people would go to the telegraph office and hand over the payment they wished to send to their loved ones far away. A coded message was then sent over the wires to the telegraph office nearest to the recipient. The funds would then be released to the person they were intended for.
There is no physical transfer of money involved in a wire transfer, which is what makes it more efficient in terms of security. The transactions through wire transfers can be done through banks or non-bank transfer providers such as Western Union. While wiring money, you are authorizing such financial institutions to move funds from your account to that of the recipient using an electronic payment network. Depending on the bank or transfer providers, funds can be wired in just a matter of time.
For wire transfers done through banks, instructions like the recipient’s name, bank account number, and the details of the amount being transferred are necessary. A bank account number is not required for wire transfers done through non-bank institutions. However, other details like the recipient’s name, destination, and the amount being transferred are necessary. Nonbank wire transfers might also require you to sign up for wire transfer services.
Although wire transfers can cost a bit more than traditional payment transfer methods, there are many advantages to sending or receiving money via wire transfers. A wire transfer can be used to transfer both small and large amounts of money. However, it is commonly used for moving large sums of money. Money wiring is also the best option when transferring money to a distant place. Another advantage is that you can send money in any foreign currency using multiple payment methods.
Types of wire transfers
Depending on the recipient and sender’s location, there are two types of wire transfers.
Domestic wire transfers
When you are wiring money to someone who is located in the same country as you, it is referred to as a domestic transfer. For example, you might want to wire money to the settlement agent while making payment for buying a new house. Also, if you need to send money to your friend quickly, you can do so via wire transfers.
International / foreign wire transfers
International wire transfers are done when you need to send money to someone in another country. Wire transfers are the most effective and quickest way to move money abroad easily. There are many situations where you might need an international wire transfer. For example, you want to send some money to a relative or friend living abroad, or you need some money and your child can send it to you from a foreign place.
Pros and cons of a wire transfer
Before getting to the part about how to wire money, you must know the pros and cons of sending money through a wire transfer. The following points will help you learn more about wiring money.
- The first and most significant advantage of wire transfers is the speed. Wiring money is one of the fastest ways to send it from one place to another. You can set up and initiate a wire transfer in no time. Domestic wire transfers can happen as quickly as 24 hours, whereas international wire transfers take just a couple of days to proceed.
- Another essential fact about wire transfers is that the recipients don’t have to wait days for the funds to clear before they can use the money. Wire transfer places no bank hold on the money being transferred, so it is available for use immediately.
- Wiring money to someone is safer than sending them a check. The problem with cheques is that they can bounce if found faulty, and this procedure can last up to several weeks. So, it takes a lot of time to spot a defective check.
- Another benefit that comes with wire transfers is that you can send money to another country. If your relative or friend resides in a foreign country and you need to send them some funds, you can use a wire transfer for such a purpose. International wire transfers only take a handful of days to move your money to any foreign place.
- One problem with wire transfers is that they are hard to cancel. Once the sender has set up and initiated a wire transfer, the process begins immediately, making it difficult for the sender to pull the money back. However, if the transfer still shows a “scheduled” status, it might be possible to cancel it by calling or visiting the bank or non-bank institution where the wire transfer was initiated.
For canceling international wire transfers, you have half an hour from the time of initiation, assuming the wire hasn’t yet been picked up or deposited. However, it also depends on your bank or nonbank service provider. So, if you’re wiring money to someone, make sure that you know the person well.
- With wire transfers, it is sometimes hard to verify the recipient. There are many situations like selling a house or making a business deal etc., when you need to send money to strangers. When you wire money, it is hard to verify who got it, so it might be challenging to know whether the person you sent money to received it or not. Anyone with a fake ID can collect the cash on the recipient’s side, and it’s hard to track the fraudsters down.
Wire transfers vs. bank transfers (ACH)
Wire transfers are not the same as peer-to-peer traditional bank transfers. People sometimes get confused with these terms and think of both as the same. However, there is a definite difference between bank transfers and wire transfers that you should be aware of. Following are the factors that play a big role in differentiating between bank transfers and wire transfers.
Where cost is concerned, wire transfers can tend to be more expensive than bank transfers. Bank transfers require little-to-no cost to send money from one place to another. Business transactions done using bank transfers can cost a little, but the cost is still low as compared to that of wire transfers.
Talking of wire transfer’s cost, it can vary according to the amount and type of transfer, but it’s still more than a bank transfer’s cost. Most of this cost is usually paid by the sender. However, the recipient also has some fees to pay for receiving the money through wire transfers. A good rule of thumb here is to use bank transfers in case of smaller amounts or less urgent transfers.
International wire transfer costs more than domestic wire transfer since the former also includes exchange fees. Exchange fees are the cost of exchanging one currency for another. Banks and non-bank service providers charge high exchange rates.
Speed plays a vital role in money transfers. Individuals wish to send or receive money as fast as possible in case of any urgency. This is where wire transfers are the most useful. When you wire money, it is transferred from your place to the recipient’s quickly as compared to if you use a bank transfer.
For domestic transfers, wire transfers offer the fastest transfer speeds, and funds are available to the recipient the very next day or sometimes, even on the same day in some cases. On the other hand, bank transfers can take a little longer, approximately up to 3 days, to process transactions. Although it can take less than that in some cases, the transaction speed of bank transfers is still less than that of wire transfers.
Both bank and wire transfers allow you to transfer funds across the country. But when it comes to international transfers or sending money outside the country, only wire transfers allow such transfers. Bank transfers cannot send money to a foreign state, however, some forms of bank transfers can allow that.
Bank transfers are considered to be more secure than wire transfers. Bank scams are less likely to happen because they require a lot of information, which makes them easier to spot. Also, if money is sent by mistake or as a result of any error, bank transfers offer ways to reverse a payment.
Meanwhile, wire transfers can be less secure sometimes since they’re so fastly done, and there is no way to reverse the transaction in case of any error or fraud.
How to wire money?
Now that you know what a wire transfer is, its types, its pros and cons, and how it differs from traditional bank transfers, it is time for you to learn how to wire money. The process of wiring money is simple and straightforward. There are only a few things you need to keep in mind.
Before making a wire transfer, you must be aware of the certain limits on the number of transactions you can send per day and the maximum amount you can send per day. You also need to keep in mind the time it takes to process a wire transfer and the fees of this entire process.
As discussed earlier as well, wire transfers can be a bit costly. Banks and nonbank wire service providers can cost fees for sending and receiving wire money. International wire transfers can cost more than wire transfers across the same country. So, you should keep this in mind before wiring money to an abroad friend or relative.
Coming towards the process of wiring money, here are a few steps that can help you with that.
Step 1: Choose a wire service provider
The first step in wiring money would be to choose the financial platform through which you will be transferring money. Wire transfers can be facilitated through both banks and nonbank wire service providers. If you already have a checking or savings account in a bank, you will prefer to use the same bank for wiring money. Similarly, if you have accounts in any other financial institution, you can go with that institution rather than looking for any other place to wire money.
If you choose to wire money through a bank, you can do so by visiting the bank’s branch or by using the bank’s online services. However, if you do not wish to use any bank for wiring money, you have the option to use a nonbank wire service provider such as Western Union or MoneyGram. Using such services, you can send money through a wire transfer to the recipient’s bank account. The recipient can pick it up from his bank as cash or have it sent to a mobile payment application.
One thing to always keep in mind is that not all wire service providers have the same work process or terms and conditions. So before going with a certain wire service provider, make sure to check how their wire transfer services work.
Step 2: Provide necessary details
Once you’ve chosen the financial institution to wire money to, you can now go ahead and proceed with the money wiring process. For this purpose, you will have to provide the following necessary details to set up and initiate a wire transfer.
- Your national ID copy
- Amount to be wired (via credit card, debit card, bank account, or cash)
- Wire money recipient’s name and address
- Wire money recipient’s bank name, address, and account number
- Wire money recipient’s mobile number (in case of sending money to a mobile app)
- Routing transit number
In some cases, you might also need to provide a SWIFT (Society Worldwide Interbank Financial Telecommunication) code that is required to process domestic and international transfers.
Step 3: Pay the wire transfer fees
As mentioned earlier, you will have to pay certain fees for wiring money, whether you are doing it through a bank or a non-bank organization. This transaction fee is a little bit different for every organization, and some may cost slightly higher fees. Before initiating a wire transfer, you should always review and compare various financial organizations to see which one costs less wire transaction fees.
When you wire money from a bank account, the transaction fee is automatically deducted from your bank account, along with the money being wired. If you are paying the wire money with cash, you might as well pay the transaction fee in cash. In the case of wiring money through nonbank organizations, the transaction fee may be charged through your bank account, debit card, or credit card. Whatever organization you are using, make sure that you know the transaction fee upfront to avoid any scam or fraud.
Step 4: Wait for the transfer to process
Once you have initiated a wire transfer, you may have to wait a few hours or, in some cases, days for the transfer to process and move the funds to their destination. The processing time depends on the location and amount of transfer. If you are sending money to a foreign place, the processing time is generally longer and spans several days.
A good rule of thumb is to get a confirmation number from the bank or company through which you are wiring money. A confirmation number helps you to reference your transaction later on in case of any problem.
How to do a wire transfer online?
Organizations like Chase and Western Union facilitate their users with online wire transfer services. Following are the steps you can take to transfer your money online.
- Step 1: Select the online wire transfer service provider of your choice. Go to the official site, register yourself, and initiate the wire transfer.
- Step 2: Select the destination of your wire transfer, whether you’re wiring money to the recipient’s bank account, mobile app, or any other wire transfer service provider.
- Step 3: Provide the recipient’s details like full name, contact information, routing number, address, etc. in case of international wire transfers, additional information like a SWIFT/BIC code can be required. You’ll also have to provide the correct amount in the correct currency you need to send.
- Step 4: Finalize the wire transfer by confirming your information and paying the transaction fee for wiring money. You can use your debit card, credit card, or bank account to pay the transaction fee and wire money. International wire transfers usually cost more transaction fees than those across the country.
- Step 5: Confirm the transaction and save the receipt or confirmation you receive. It’s essential to keep a record of the receipts as they might contain important information about your transfer. Once your money is on the way, you might have the option to track it as well, depending on the online wire service provider you are using.
Wire transfers are a safe and secure way to send money far and fast. When wired, your money arrives at its destination in no time. Although the cost of wire transfers can be a little more than other types of transfers, you are at peace knowing that your money will get to its destined place on time and will be ready to use immediately.
This article has covered every aspect of wire transfers, what are their pros and cons, and how to wire money in person and online. Having read such an extensive guide, you should be able to wire money right away.