There are times when you may need to move a large sum of money safely and speedily or get cash to someone in another country. A wire transfer can be a good solution.
Perhaps you won a vintage watch in an auction, or you need to send money to a friend in France who’s arranging a rental car for you. Those are a couple of the situations when a wire transfer could get the job done.
Here, you’ll learn more about this process and find answers to questions like, “How can you wire transfer money?” and “How much do wire transfers cost?” You’ll learn the pros and cons of transferring money this way so you can make an informed decision about the best way to send and receive funds.
What Is a Wire Transfer?
A wire transfer is an electronic transfer of funds by banks or nonbank money transfer providers like Western Union and MoneyGram.
The term lingers from the era when transferring money — $2.5 million a year by 1877 — occurred via coded pulses of electric current through dedicated wires. (A sender would take money to a telegraph office, and an operator would use codes and passwords to “wire” the money to the telegraph office of the recipient.)
A wire transfer is an electronic transfer of money used around the globe.
These days, wire transfers allow a certain amount of money to be sent electronically from your bank account to a recipient’s bank account, anywhere, or vice versa.
💡 Quick Tip: Make money easy. Open a bank account online so you can manage bills, deposits, transfers — all from one convenient app.
How Wire Transfers Work
Banks and transfer service providers wire money for retail customers. They have varying processes and fees, so looking into the choices may save some money. Some details to consider:
• Banks require account numbers in order to process wire transfers; transfer service providers do not.
• Wire transfers can include a person’s name and other contact information or, for a cash-based transfer, be anonymous.
• The banks and transfer providers will have different processing times, so money could be sent within hours if it’s a domestic transaction or a few days if it’s an international transaction.
• Wire transfers are much like cashier’s checks. When someone is receiving money, the bank will treat the payment like cleared money, so as soon as the recipient’s account is credited, they can withdraw or spend the money.
• When someone is sending money, the funds must be in their account before the bank will initiate the transaction. The money will be removed immediately after the wire transfer.
Get up to $300 when you bank with SoFi.
Open a SoFi Checking and Savings Account with direct deposit and get up to a $300 cash bonus. Plus, get up to 4.60% APY on your cash!
How Long Does it Take to Wire Money?
A wire transfer can be set up in minutes at a bank or wire transfer service. Then, once it’s sent, wire transfers will take up to 24 hours for processing when they are domestic.
International wire transfers can take between one and five days. They usually arrive within two days, but transfers made to or from a “slow-to-pay country” may add to that.
How to Wire Money in 5 Steps
Anyone interested in how to wire funds can follow these step-by-step directions to do it in an efficient and safe manner.
1. Make Sure You Have the Funds
Ensure that the money is in the sender’s account. Wire transfers cannot be sent if the money isn’t there.
2. Pick a Wire Transfer Service
The sender can transfer the money online or go to providers in person and use cash or a bank account, depending on the service. (Some services, like Western Union, may allow you to send money without a bank account.)
3. Fill Out the Forms/Create an Account
When sending money through a bank, senders will need to fill out forms and include their bank account information, their bank’s contact information, and the recipient’s bank account information, including the account number and contact information for the bank. They will also need to provide a government-issued ID and/or their online login information for the bank.
When sending through a wire transfer service, they may have to log in online or go to the service in person and link their bank account or take cash, choose the recipient’s country, delivery method, and account information, and fill out any other information that’s required.
Senders have to be careful that the bank account numbers they provide are accurate, or the money will not get to the recipient.
4. Include Fees in the Amount You Send
Banks and wire transfer services should be able to tell users what the fees are going to be upfront, and users will add those fees to the amount they are sending.
5. Ask for a Receipt
The last step in how to wire money is to get your receipt. This ensures that senders have a record of the transaction. If something goes wrong and no receipt exists, they have nothing to show that they sent the wire transfer correctly.
Recommended: How to Transfer Money From One Bank to Another
Pros of Wiring Money
Reasons that people might want to wire money include the following.
They Need to Move a Big Amount
Limits tend to be high, so wire transfers are common for real estate transactions and sending money to and from family members.
The Money Is There
With checks and debit cards, payment can bounce or an account can go into overdraft. With a wire transfer, that’s not possible, since the money must be there in order to be sent. A wire transfer request will be declined if someone has limited funds.
It’s Safer Than Checks
While checks are typically safe, mailing them is not necessarily. People could open mail that isn’t theirs and take checks out and cash them. Wire transfers offer a more secure alternative.
Money Can Be Sent Internationally
Let’s say a person goes to work in another country but wants to send money to family members back home every month. With a wire transfer, that’s easily done.
Recommended: What Are Intermediary Banks?
Cons of Wiring Money
Wire transfers have a few possible drawbacks.
Cost
Expect to pay about $25 for an outgoing bank transfer within the United States, $15 for a domestic incoming payment, and $45 for an international outgoing payment.
Juxtapose that with free or low-fee peer-to-peer payments or using a credit card and paying the balance when it’s due.
No Do-Overs
Wire transfers are typically irrevocable, so both sender and recipient should be sure that all of the required information is correct.
Potential Scams
Scammers may ask unsuspecting people to wire them money for goods or services and then never follow through, so it’s best to avoid wire transfers unless the sender and receiver know each other.
Unlike with a credit card, where someone could dispute the charge, the money may be gone forever once it’s sent.
Here are the pros and cons of wire transfers in chart form:
| Pros of Wire Transfers | Cons of Wire Transfers |
|---|---|
| Can move large sums | Cost |
| Reliable; the money is there | No do-overs |
| Safer than checks | Potential for scams |
| Can move funds internationally |
An Alternative to Wiring Money
If you want to move money but don’t want to use a wire transfer, here are some other options.
Peer-to-Peer Services
P2P payments usually can be made from a linked bank account or directly from the P2P account for free. You may already use some of these services, such as PayPal and Venmo.
Some providers do charge 2% or 3% to process payments drawn from a credit or debit card.
Your smartphone becomes a digital wallet for splitting bills and paying personal debts. Payments are sent using another app user’s phone number, email address, or account handle.
Bank Account Money Transfer
You may also set up electronic transfers (you may hear the terms ACH and EFT used) with your bank. Funds can often be sent to any other bank account, not just those held at the same financial institution.
There may not be any account fees or service charges. Check with your bank to be sure.
While all can offer a secure transfer of funds, here’s how they compare on other fronts:
| Wire Transfer | P2P Services | Bank Account Transfer |
|---|---|---|
| Often involve a fee | May involve a fee, depending on the provider and funding source | Often free |
| Can take up to 5 days internationally | Can take a few days internationally | Can take up to 5 days internationally |
Getting an Online Bank Account With SoFi
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
FAQ
What is required to wire money?
To wire money, you will need the amount of cash available, a provider of the transfer (your bank or a service), the proper forms and/or account information filled out, coverage of any fees, and a receipt.
How much does wiring money cost?
The amount you will pay to wire money can depend on the financial institution and whether the money is moving to your account or into someone else’s account, and whether the funds are being sent domestically or internationally. You are likely to find fees from $0 to $45 per transaction.
What is the process of wiring money?
To wire money, you will need to have funds available and fill out paperwork with the recipient’s banking information. Part of the process may involve paying a fee also, and it’s wise to always get a receipt.
SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.
SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.
SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
SOBK0323006
