What Is a Wire Transfer?
8 Min Read | Published: April 12, 2024
This article contains general information and is not intended to provide information that is specific to American Express products and services. Similar products and services offered by different companies will have different features and you should always read about product details before acquiring any financial product.
Wire transfers are a fast and secure way to send money. Learn how they work and what to consider before using one.
At-A-Glance
- A wire transfer offers a quick, secure way to send funds domestically and internationally.
- Wire transfers can facilitate large and international money transfers, such as sending money to family abroad, purchasing real estate, and donating to charity.
- Consider factors like fees, exchange rates, bank hours, and cancelation policies before initiating a wire transfer.
There are many ways to transfer money between financial institutions. One that’s been around for a while now is the wire transfer, used for domestic and international transfers for various purposes.
This guide will explain how wire transfers work, some scenarios when they could be used, and what to consider before transferring funds via wire.
What Is a Wire Transfer?
A wire transfer is an electronic way to transfer money from one bank account to another. You can initiate wire transfers domestically and internationally.1
The Consumer Financial Protection Bureau regulates wire transfers. These transfers are one of the more secure methods for transferring money if you use a legitimate wire transfer service and know the recipient.
Financial institutions use encryption technology to protect the sender’s and recipient’s data from everyone except the parties involved. They also use security measures like two-factor authentication and other verification measures so only the recipient can initiate and receive their wire transfers.
Plus, wire transfers are irreversible. This protects the recipient, although the sender must be more careful since they may not be able to get their money back afterward.
Here are some scenarios where wire transfers can help:
- Sending money to someone in another country
- Sending emergency money
- Large purchases
- Legal-related transfers of funds
- Charity
As always, it’s important to stay safe when sending wire transfers. Never send wire transfers in response to emails or messages soliciting funds, or in situations where you do not know the recipient.
How to Perform a Wire Transfer
Wire transfers are fairly straightforward but involves a few steps.
Here’s how to perform a wire transfer:
- Start the transaction: Visit a wire transfer provider or visit your local bank or credit union. You can also send a wire transfer through your bank’s website or mobile banking app.
- Provide information: Provide the recipient’s name, bank account number, bank routing number, and amount to transfer. For international transfers, provide their SWIFT/BIC code instead of the routing number. International or large wire transfers may require additional documentation for regulatory purposes.
- Pay fees and finalize the transfer: Pay any fees the institution requires. Then they will submit the transaction and provide you with a way to track the transaction.
- Keep the receipt: Hold onto the receipt for the transaction in case anything goes wrong.
- Await confirmation: Wait for confirmation that the money has arrived in the recipient’s account.
How Much Do Wire Transfers Cost?
Wire transfers may come with fees:
- Outgoing fee: Senders typically pay the sending institution a fee for the wire transfer. Fees typically range from $15 to $50.2 They tend to be higher for international transfers.
- Incoming fee: Incoming fees for recipients tend to be lower than outgoing fees.
- Currency conversion fee: International transfers requiring currency conversions may require an additional fee.
- Intermediary bank fee: International transfers could result in higher overall fees if the funds must pass through intermediary banks before reaching the final destination.
- Change or cancellation fee: If you cancel your transfer or request to make changes, you may own a fee.
- Exchange rates: International wires may require currency exchange. Exchange rates could impact how much your recipient gets.
How Long do Wire Transfers Take?
Wire transfers can take anywhere from a few minutes to a few days, depending on certain factors:
- Transfer speed: Many wire transfers could process within a day. However, certain transactions, like international wire transfers, could take longer.
- Transfer limits: Your institution may cap how much you could transfer via wire and may put large transfers under additional scrutiny.
- Bank hours: If you initiate a wire transfer after bank hours, it may not process until the next business day. This could cause a delay in your recipient getting the wire transfer. Additionally, transferring across time zones might mean the recipient’s institution is not open when yours is.
What to Consider Before Sending Money With a Wire Transfer
Wire transfers are an efficient way to send funds to friends and family, but there are some precautions you should take when doing so. Here are some things to consider before sending money to someone via wire transfer:
- Secure your personal information: Protect your personal and banking information by avoiding sharing your details with others. You do not have to provide your banking information to the recipient, so if they ask for it, don’t give it to them.
- Cancelation policy: Institutions differ in cancelation policies. Some let you cancel within a certain timeframe, whereas others may not. Once money reaches the recipient, the transaction cannot be cancelled.
- Watch out for scams: Fraudsters rely on wire transfer scams because it’s nearly impossible to get your money back after the transaction. For this reason, it’s advisable to only send wires to people you know. If it’s not a friend or family member, take extra care to research and verify the legitimacy of the recipient.
- Only use trusted institutions: Use well-established institutions in full compliance with all applicable laws, especially for large or international transactions. Prioritize reputable banks and money transfer services.
- Watch your account after the transfer: Keep an eye on your account for a few days after your transfer. If you notice any unusual activity, report it to your bank and the institution (if different) immediately.
The Takeaway
Wire transfers remain a helpful way to send money domestically and internationally for various uses. Their speed and security help you send money fast and with peace of mind.
1 “What is a wire transfer?,” Consumer Financial Protection Bureau
2 “How much are wire transfer fees?,” Business Insider
Bradley Schnitzer is a writer and email strategist who has covered personal finance and small business topics for over five years. He is passionate about personal finance and helping others understand their money.
All Credit Intel content is written by freelance authors and commissioned and paid for by American Express.
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The material made available for you on this website, Credit Intel, is for informational purposes only and intended for U.S. residents and is not intended to provide legal, tax or financial advice. If you have questions, please consult your own professional legal, tax and financial advisors.
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