There are more ways than ever to move money, thanks to personal pay. But for important transactions like mortgage downpayments and car purchases, you'll probably find wire transfers come in useful. Performed by financial institutions, wire transfers let you move money between accounts without having to cut a check or transport cash from one bank to another. Although no laws limit the amount of money you can wire transfer, individual banks often cap the total amount.
The Wire Transfer Process
A wire transfer refers to an electronic transfer of funds between accounts. When you want to send money, you go to your bank and give them the necessary information about the receiving bank. This information will likely include the recipient's name, bank account information, address and phone number of the bank and the name of the person at the other end who will be receiving and processing the transaction. Once you've handed all this information over, your bank will make a withdrawal from your account and send the money to the bank of the recipient. The bank receiving the money places the wire transfer into the recipient accounts.
Why Wire Money?
Bank wires have long been popular because of their safety. To send money, you'll need a relationship with the financial institution managing the transaction. The person at the other end will need to be an accountholder with that financial institution. For that reason, it is considered the safest way to send money between two parties that know each other. Wiring money to strangers can put you at risk for fraud, so it's important to be careful. In addition to wire transfer scams, you should also be overly cautious when gathering and providing the contact and banking information on a recipient. If you transpose a number or misspell a name, you could find that your funds land in the wrong hands with no recourse. If you suspect someone is trying to convince you to fraudulently wire money, contact the Federal Trade Commission at 1-877-FTC-HELP.
Bank Wire Transfer Limits
Many major banks impose a per-day or per-transaction wire transfer limit. For example, Chase Bank sets the limit at $100,000 for individuals, but offers higher limits to businesses on request. Citi imposes various amounts depending on the type of account, but it ranges between $1,000 and $10,000 online. Fidelity allows up to $100,000 per transfer and $250,000 per day. Both the sending the receiving banks typically impose a small fee for wire transfers.