A wire transfer is the fastest way to send money, according to the U.S. Bank National Association. For this convenience you'll incur a wire transfer fee, which is a charge for using an electronic payment service to transfer funds by wire. The charge varies depending on the type of wire transfer. Banks charge incoming and outgoing fees, as well as foreign exchange fees and taxes for wire transfers.
Benefits of Wire Transfers
Wire transfers have built-in security features that safeguard the money being transferred. These security features include a personal identification number code and the recipient bank’s Society for Worldwide Inter-bank Financial Telecommunication Code. In addition, the money is credited within a few hours or days into the recipient’s bank account as the funds transferred are considered collected funds. The initiation process is simple and fast, offering convenience to the customer who’s about to make the transfer, according to the U.S. Bank National Association.
How It Works
When you initiate a wire transfer, you’ll need to provide a physical address of the recipient’s bank or SWIFT code, or both. Your bank will debit your account and send the payment information to the recipient’s bank. When the recipient’s bank receives the payment information, it credits the recipient’s account. It might take only a few hours after initiating a transfer to credit funds from domestic wire transfers. International transfers might take three to five days, according to Commerce Bank.
Domestic incoming transfer fees refer to the amount charged to the recipient’s account on receiving funds from a sender’s account when both are in the same country. For example, if your recipient resides in Washington D.C. and you, the sender, reside in New York, the fee charged on the recipient’s account is the domestic-incoming transfer fee.
The domestic-outgoing transfer fee is the amount charged to the recipient’s account on receiving funds from a sender’s account in a foreign country. For example, if you send money from an account in the United Kingdom to your family in the United States, the fee charged on your family’s U.S. account is the foreign-incoming fee.
Outgoing Fees and Taxes
Outgoing transfer fees are the amounts charged to the sender’s account on transferring funds to a recipient’s bank account in the same country or state. This is the fee you’ll pay to transfer money from one U.S. bank to another, from a foreign bank to a U.S. bank. You might not be able to initiate a wire transfer from small foreign banks because the foreign bank must have a relationship with the U.S. bank to initiate a transfer.
You also might pay a foreign exchange fee, which is the amount charged for the exchange rate service. In addition, you might pay taxes on the funds remitted.