Bank to bank transfer involves transferring funds from one bank account to another bank account. When transferring funds from one bank to the other, you can carry out an ACH transfer, direct deposit, or wire transfer. Each of the methods avails funds at different times. Today, we will look at the wire transfer process. But how long does a wire transfer take for a bank to bank? Such a question must pop up in anyone’s mind if they intend to transfer funds using the method?
The ability to transfer money between banks allows people to send money even to international recipients. Also, you can pay online for goods and services to people far away from your location and still get what you want. Even though bank-to-bank transfers may be slightly slower than account-to-account transfers within the same bank, they play a significant role in money circulation.
Wire transfers are suitable for sending large amounts of money to people in other countries such as your relatives or people with a common purpose. They offer a faster solution compared to other bank-to-bank transfer means. The only disadvantage with the wire transfer is that you cannot reverse a transaction once you hit the send button. That means you have to enter all the details and confirm them carefully before sending them.
What are the requirements to carry out a wire transfer?
To successfully move funds through wire transfer, you must gather all the required information about the recipient and their bank. The following information is essential. Have a look.
- Full names as they appear on their identification document.
- Their physical address
- The name of their bank, address, and phone number
- The bank account number and the account type. It can be a checking or savings account.
- ABA routing number of their bank (for domestic transfers)
- IBAN and BIC/SWIFT codes of the recipient’s bank (for international transfers)
You also need to understand the recipient’s currency and convert it to American dollars to ensure that you send the right amount. That is when transferring the funds to international recipients.
About the above details, I am sure that you must be wondering what some mean. Well, the ABA routing number is a nine-digit number developed by the American Bankers Association. A bank’s ABA routing number is based on the location of a U.S. bank. Some banks have specific routing numbers to help in wire transfers only.
An IBAN (International Bank Account Number) combines 34 letters and numbers to identify countries and branch locations for international transfers. Lastly, BIC/SWIFT code is 8–11 characters that identify an international transaction at a particular bank.
It is crucial to note that you have to transfer money using the routing number and account number even when using the other bank-to-bank transfers. That way, the funds can reach the right bank and recipient.
How long does a wire transfer take from bank to bank?
Wire transfers are complete within 24 hours when done domestically. International wire transfers can take 1-5 days to clear. That is why wire transfers are more beneficial than ACH transfers and other money transfers that can take 2-3 days to complete. Various factors affect the speed of a wire transfer. They include the following.
1) Time of the day
The federal government requires that all banks complete wire transfers within one business day. Business days are Monday to Friday. If you initiate the transfer over the weekend, you might wait for more than a day because banks do not work over the weekend.
Also, if you initiate the transfer late after the banks close, your transaction may start processing when it is too late. Banks and credit unions have their cut-off times so that if an institution closes at 3 pm and you initiate the transfer at 3:01 pm, then your transaction will be recorded as having been done the following day.
2) Where you are sending the funds
If you send the funds to a domestic recipient, understand that the funds will arrive within 24 hours. The wire transfers can arrive immediately at the recipient’s bank account for big institutions with different routing numbers. International transfers take a bit longer.
When you carry out an international transfer, also called a remittance transfer, the recipient will have to wait for 1-5 days. The time an international money transfer takes depends on the time zones of the recipient’s country, currency, and banking systems. There are also slow to pay countries that can take too long, even up to three weeks, to reach the recipient. The transaction may even end up canceled.
3) The method of transfer
The transfer method you use may affect the time taken for a transfer to complete. There are various methods you can use to carry out a wire transfer. They include the following.
i) Fedwire
Fedwire allows immediate transfer of money. The transfer method is suitable for time-sensitive or large-value wire transfers between U.S. financial institutions where banks use the transfer system for real-time gross settlement (RTGS). Therefore, the transfers are completed immediately.
ii) CHIPS (Clearing House Interbank Payments System)
CHIPS are helpful for batch transfers. Banks also use CHIPS when making net settlements and processing multiple transactions as part of a batch process. Some banks have cut-off times at various times of the day for wire transfers and thus can send multiple daily batches.
iii) SWIFT (Society for Worldwide Interbank Financial Telecommunication)
SWIFT is suitable for international wire transfers. When it becomes difficult for international transfers to be processed directly between two banks, banks use SWIFT, making it possible for money to transfer via intermediary or correspondent banks.
What is the process of carrying out a wire transfer?
Wire transfers are for large amounts of money, and you should check with your bank to see that the amount you want to transfer matches the minimum amount required. Once you visit the concerned bank’s branch, you will get a form to fill out as per the instructions. You can also start the transfer process online using your smartphone or computer, just like when you wish to transfer money from one card to another.
Once you fill out the form, you can submit it for verification by your bank. They should confirm that you have written everything that you require. You will then pay fees depending on the amount you are transferring. The recipient may also be forced to pay a certain amount of fees depending on their bank’s terms and conditions.
Sending wires using a credit card can attract hefty fees since you send money using a cash advance. Standard transfers from bank accounts can cost up to $50 per transfer. International transfers are more expensive compared to domestic transfers.
A wire transfer transaction fees vary based on the type of account you have, whether you use in-branch or online services, and whether you use U.S. dollars or a foreign currency to make the transfer.
What are the alternatives to wire transfers?
Wire transfer is not the only way to transfer money both domestically and internationally. There are other ways you can move money which include the following.
1) Use money transfer agents
Numerous companies allow you to transfer money to international recipients. Western Union, MoneyGram, Wise, and Remitly are some of the companies that allow you to transfer money from your bank account to another bank account either within the country or across the borders.
Mobile wallets such as PayPal and Payoneer also allow you to transfer funds from your bank to someone else. Mobile wallets allow you to send money online using a debit card or a bank account if you use either to fund your transfers.
2) Use Cashier’s Checks
Cashier’s Checks are as fast as the wire transfers since funds are drawn from your account as soon as the cashier gives you the check. The recipient will therefore be able to cash out very quickly.
3) Money orders
For money orders, you have to pay immediately to buy the paper money. Money orders almost resemble cashier’s checks in that you have to pay first. You then send the order to the recipient, who then cashes it out upon receiving. Using money orders and check is cheap compared to wire transfers.
What is the difference between wire and ACH transfers?
Many people get confused when they hear about wire transfers. Well, the two types allow you to transfer money electronically between different financial institutions. For example, you can use a wire or ACH transfer method to transfer money from a debit card to a bank account. However, wire transfers process immediately, while ACH transfers take around 1-3 days to reach the recipient.
Another critical difference between wire and ACH transfers is the cost. Wire transfers cost a lot of money to the sender and the recipient, while ACH transfers cost nothing or very little. Again, wire transfers are processed by banks, while a clearinghouse processes ACH transfers.
Bottom line
Wire transfer is one of the most used money transfer methods that allow you to transfer money domestically and internationally. Other methods include ACH and the use of money transfer agents such as MoneyGram and Western Union.
Wire transfer is suitable to transfer large amounts of money instantly. You cannot reverse a wire transfer once initiated. Again, Wire transfers are costly compared to ACH transfers as both the sender and the recipient have to pay fees for a transfer.
