A wire transfer is in many cases a good solution to send money quickly, whether domestically or internationally. Payments sent by wire are nearly instant while providing a secure and reliable delivery. In some cases, a wire transfer and cashier’s check might be the only two options available to you for certain types of purchases; such as a house. Many times it is the benefactor that wants the guaranteed funds delivered in a timely fashion.
What are Wire Transfers?
In essence, a wire transfer is an electronic transaction where the money is sent from one bank account to another. Traditional bank wires usually involve a bank account or credit union and send the funds via Fedwire or SWIFT networks.
Though, as the term “wire transfer” is broadly used to describe many types of transfers, it is important to verify the requirements are explained when a person requests a wire transfer. Generally when a person requests for a “bank wire”, they are anticipating a standard bank-to-bank transfer. If this is not the case, a money transfer service or other electronic payments could be used to send funds.
How Fast are Wire Transfers?
Many people choose to use wire transfers since the money is transferred quickly, most times in as little as 1-2 days. If you are located within the US, you have the possibility of a same-day transfer, but this can vary from bank to bank. International transfers will usually take an additional day or two to be completed.
The fast transmission of funds means a recipient doesn’t first have to wait for the money to clear before they can access the funds. Individuals that send through a wire have little to no resource, meaning once funds hit an account they will remain. This means that normally there are no holds placed on the funds received through wire transfers. In addition to their security, wire funds can also be tracked by recipients with a few phone calls.
Unfortunately, unlike wires, checks can be returned by banks when there are insufficient funds to cover the amount. Therefore, businesses selling a service or merchandise find that using a wire transfer can be more secure than a check.
How Do Transfers Work?
If you want to send money via wire, all that is required is the submission of the recipient bank instructions to your bank. Customers will have to provide the bank account particulars of the recipient. In many instances, the sending bank will require the sender to fill out their bank wire forms. A few banks that allow customers to perform the complete wire process online, most institutions will require a signed form.
To receive money via a wire transfer, recipients will have to provide the particulars of the receiving bank account to the individual or company sending the funds. Confirming bank account information with is always best prior to providing instructions to the sender.
Usually, funds will move within a single day, it can take an additional day for the money to reflect in your bank account. To receive a wire transfer, the fee is about $10 or less depending on the bank. To send a wire transfer, the fee is about $40, but this will vary from bank to bank.
Send a wire transfer directly from a bank account is generally a better way to transfer funds. Using a credit card to pay for a wire transfer will usually cost more than paying from a bank account. This occurs because many times credit card companies will treat the transaction as a cash advance, which incurs more fees and higher interest rates than other transactions.
Are Money Transfers Safe?
To complete a wire transfer within the United States, both parties must have a bank account. In order to open an account, customers must provide a verified residential address and verified identity. This makes it extremely hard to bank in the United States without being identified by name.
Though fraudulent activity that involves wire transfers can occur, it more difficult for criminals to scam people via a bank wire transfer. Hiding your identity from people and companies is possible, but not always from law enforcement. The financial industry in the United States is highly regulated and controlled in an effort to prevent money launder, tax evasion, and theft.
The biggest risks faced by consumers occurs when sending funds. A criminal could send customers funds via wire to another account before the unsuspecting consumer realizes the fraud. It can take a day or 2 for the scam to be realized and at that time it's too late. Also, wiring funds to offices that handle multiple types of payments, like Western Union, can be problematic. At times it can become difficult to check and verify who received the money as fake identifications and documents can be used.
While sending money via a wire transfer could pose a few risks, it is mostly safe to receive money via a wire transfer.
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