How Wire Transfers Work: Sending and Receiving Money

The Process, Costs, Security, and Speed of Wiring Money

wire transfer basics
The Balance / Miguel Co.

When you need to send or receive money quickly, a wire transfer might be the right tool for the job. Wire transfers are fast, reliable, and generally safe.

And for significant transactions—like buying a home—wire transfers or cashier’s checks might be your only options because the funds are available to the recipient more or less immediately.  Learn the ins and outs of wire transfers to wire money swiftly and safely.

What Is a Wire Transfer?

A wire transfer describes any electronic transfer of money. Usually, if someone asks for a “bank wire,” they want a traditional, domestic bank-to-bank transfer. A traditional money wire goes from one bank to another using a network such as the Society for Worldwide Interbank Financial Telecommunication (SWIFT) or Fedwire.

But the term wire transfer applies to other types of transfers. For example, U.S. consumers can also wire money to people abroad through international wire transfers, also known as remittance transfers. And, in addition to banks, credit unions and other financial services companies can act as the money transfer provider in these transactions. This is why it's important to clarify the requirements if someone asks for a wire transfer.

Cost of Wire Transfers

Unlike some electronic payments, bank wires cost money—anywhere from $15 to $50 per transfer. The fee depends on the bank, whether the wire is outgoing or incoming or domestic or international, and the transfer amount. In general, domestic incoming wires fall at the lower end of this price range, while international outgoing wires fall are the most expensive. In addition, some banks waive domestic incoming wire fees for certain account types.

Some banks place a limit on the amount you can send in a single transfer or within a single day. However, the limit tends to be high—up to $100,000 per transfer or $250,000 per day at some banks.

Speed of Wire Transfers

Money wires are useful because the money moves within a few days depending on where it's going.

Processing Time

It only takes a few minutes to set up and initiate a wire transfer. Within the U.S., transfers can often be processed on the same day, depending on how early you submit your request. International transfers take an extra day or two.

Cleared Funds 

Because the money moves quickly, the recipient doesn't have to wait several days for funds to clear before claiming or using the money. In other words, there is usually no bank hold placed on money received via wire transfer.

However, it may take several hours for the receiving bank to show the wire proceeds in the recipient’s account—even if the money is at that bank. A bank employee may need to complete a few tasks to make the funds available.

Bank Wire Transfer Safety

For anyone selling merchandise or services, a money wire poses less risk of fraud than a check because a sender must already have sufficient funds in their account to initiate a wire. In contrast, checks can bounce, and it can take several weeks (or more) to find out that a payment was bad.

Even so, there are some risks to consider and basic safety measures to take when sending or receiving wire transfers.

Sending Money

The main risks with wire transfers relate to sending funds. With a wire transfer, money goes from one bank to another, and then to the recipient’s account. Within the U.S., each party to a wire transfer needs a bank account. To open an account, federal regulations require that banks verify your identity (among other things) and ask for a physical address where you can be found.

This lack of anonymity when banking in the U.S. limits thieves' ability to pull off a scam with a bank wire transfer to a degree. However, if you wire money to a stranger or through a business that pays out the proceeds in cash (such as a retail "money transfer" shop in a strip mall, Western Union, or equivalent), it is harder to verify who got the money. Someone with a fake ID could collect the cash, and the many potential money pick-up locations might make it difficult to track the recipient. This is why it's important to send money only to people or businesses you trust.

Watch out for scams involving wire transfers: You send money, the thief withdraws cash (or wires it to a different account, possibly overseas), and you don't realize you've been scammed until it's too late to recover the funds. Thieves only need to take control of someone's bank account for a few days to get cash or send the money elsewhere.

Avoiding Mortgage Wire Scams

Down payments, closing costs, and other wires to a title company or real estate professional are an attractive target for hackers. When buying a home, always verify where the money is supposed to be wired—especially if you get wire instructions by email. Hackers can alter emails (even from people you've been working with for several weeks) and instruct you to send money to the wrong place.

To avoid problems, call the recipient to verify the wire instructions. Likewise, avoid sharing your financial information in emails or opening unknown email attachments.

Receiving Funds

Getting money via wire transfer is for the most part safe. Payments are more certain because banks only wire money out if the sender has the funds available. What is more, money transfer providers make it difficult for the sender to pull money back after it has been transferred.

However, some wires (international wires, for example) can be reversed in certain situations. Thieves might take advantage of customer confusion by promising to send a money wire but actually sending money using a different (reversible) method. Only selling to trustworthy buyers can help you avoid this scenario.

Other Types of Electronic Transfers

The term "wire transfer" is often used for various electronic transfers that aren't necessarily as instant or safe as bank wire transfers, as described above. In fact, most payments are electronic (even checks get digitized). These transfers are an option when you can't or don't want to send a wire transfer.

Money Transfer Services

Financial services companies like Western Union operate independently—you can bring cash for an in-person transfer and the recipient will walk out with cash. Transfers can take minutes to up to five business days. The recipient is identified through personal information like their name and address.

ACH Transfers

These are bank-to-bank transfers that move through the Automated Clearing House (ACH) network. ACH transfers usually take one to two days. These transfers can be reversed, but only in limited circumstances.

P2P Payment Tools

These person-to-person (P2P) services are typically easy and inexpensive and include Venmo, Zelle, and Popmoney. Each tool has different time frames for transfers (Popmoney, for example, enables three-day standard transfers from bank accounts). They also have different strengths and weaknesses, so users should study the options for the individual service and find out which works best for money exchanges, repayments, and other transfers.