How Wire Transfers Work: Sending and Receiving
A wire transfer is a bank transfer where you can send money to another person directly to their bank or credit union account. Similarly, you can receive money into your account from another person. A wire transfer is an electronic transfer of money from one account to another. The wire transfer happens over a network like SWIFT or Fedwire. It is a convenient way of paying someone or getting money from someone.
When you don’t want to handle cash or want immediate money and don’t have the time to deposit a check, then a wire transfer is the best way of receiving money. It is convenient and very fast. There are two types of wire transfers:1. A transfer from one account to another using the bank network.
2. Electronic payment using the services of money transfer service providers like Western Union. Here you can pay cash and it would be transferred electronically to another person’s account.
How to send money through Wire transfer
You can send money to someone else’s account by providing instructions to your bank to transfer the money. You need to provide details that include the name of the recipient, bank details, and account number.
Banks would have a form for wire transfer. You can fill the form and provide all the details after which the bank would wire the money. With the growth of internet banking, you can even give wire instructions to your bank online.
How to receive money through Wire transfer
If you have to receive money through wire transfer, then you need to provide your bank account details to the party who is going to send you money. You need to take care to provide the correct details. For this, you can request your bank for incoming wire instructions. You can give this to the other party.
How fast does this take place?
Usually, wire transfers happen within a day’s time. For wire transfer outside the country, it may take a couple of days. While the transfer usually happens within one day, for the amount to be reflected in your bank account, it may take one more days’ time. This varies from bank to bank.
Charges to be paid
Bank transfers are charged as the bank incurs expenses to carry out the wire transfer. Usually, banks charge $10 to receive a wire transfer. There are many banks that do it for free. For sending a wire transfer, you may have to pay around $40. This amount varies from bank to bank.
Things to take care during wire transfer
- The account details for the transfer need to be correctly given. If you provide someone else’s account number by mistake, then the funds would be transferred to the other person. The bank cannot be held liable for this. They will transfer money to the account you specify. So, verify the bank account before transferring funds.
- When you get wire transfer instructions over e-mail, it would be advisable to verify it by calling the other person. There is a probability where a hacker may change the account number, so verifying it over the phone is much safer.
- You can even transfer funds using your credit card, however, it would be expensive as you would be paying cash advance fees and interest also on it.
- There are many tools and apps that allow you to transfer money from your bank account. When you use such tools, make sure you verify the authenticity of the tool or app before using it.
- When you issue a check, you can always stop payment on it. You cannot stop payment on a wire transfer, so be sure before you issue wire instructions.
How Do International Wire Transfers Work?
Aside from money wires in the United States, you can also perform money transfers and wires abroad. Before you perform such a money wire, you need to know how do international wire transfers work with outer country transfers.
If you intend to send money to someone abroad, your money transfer service or bank need the information to make sure the transfer complies with the law. Just like with opening a bank account, money transfers require financial institutions to collect data about you. If you are opening a money account that will allow you to transfer money abroad, or you are performing money wire abroad, you will need to provide the bank or the financial institution with the following data:
- Proof of address
- A government-issued ID
- Proof that you are the owner of the bank account or debit card that is used to make the money wire
- Reasons for why you need to make a transfer
- Your Social Security Number
The data you need to provide for money transfers abroad may change based on the requirements of the bank or debit card service you are using. It may also vary depending on how much money you want to send, and the destination country of the money transfer.
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