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In a nutshell
Both wire transfers and bank transfers allow you to send money to others, but there are some differences to consider.
- Both bank transfers and wire transfers can have fees, but wire transfers are typically more expensive.
- While bank transfers can take up to a day or more for funds to be available, wire transfers can be completed nearly instantaneously.
What is a wire transfer?
Wire transfers move money from one financial institution to another. They utilize either the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network or the Fedwire networks. Banks can send money domestically or internationally using either of these networks.
Wire transfers are fairly simple to set up through your online banking platform. While the requirements might differ between institutions, you’ll typically be required to provide the following information:
- Domestic wires: Recipient's name, address, bank account number and routing number.
- International wires: Recipient's name, address, bank SWIFT BIC and bank account number. You might also need to provide the International Payments System Routing Code.
Pros:
- Most wire transfers can be completed nearly instantaneously.
- Generally, it is a safe way to send money to others.
- No risk of insufficient funds.
Cons:
- Bank fees can be high, making it a less attractive option for sending small amounts.
- There may be a limit on how much money you can send.
- Alternatives can be cheaper.
What is a bank transfer?
Like a wire transfer, a bank transfer moves money from one financial institution to another. Typically, this is done through secure communication between the banks, which provides information about where the money is coming from and where it’s going.
Bank transfers are typically used for many different reasons. You can use a bank transfer to make a repayment on a loan such as your mortgage, car payment or credit card. Bank transfers can also be used by employers to deposit your paycheck into your bank account. You could also use a bank transfer to transfer money to friends and family.
Depending on the institution, bank transfers can happen nearly instantly — or they may take up to a few days to complete. Plus, most bank transfers involve little to no cost.
Pros:
- Most bank transfers can be completed for free — or at minimal cost.
- Safe and secure way to send money to others.
- Most bank transfers can be completed within one business day.
Cons:
- If there are insufficient funds, the payment may be delayed.
- Typically, you can only send money domestically.
What are the important differences between wire and bank transfers?
Wire and bank transfers both allow you to send money to others, but the two have some key differences.
Speed
When sending money, you generally want it to happen quickly. Wire transfers have the advantage most of the time, because most are completed nearly instantly. While bank transfers can occasionally happen just as fast, most will take up to 24 hours. The exact length of time depends on the bank.
Cost
Cost is a significant factor for many people when sending money. Most bank transfers can be completed for little to no cost. If there is a fee, it will be charged to the sender and not the recipient.
The speed of wire transfers tends to come at a price. The exact cost for a wire transfer depends on the bank or credit union, but the cost is typically as follows:
- Outgoing domestic wire transfer: Between $15 and $30.
- Outgoing international wire transfer: $30 and $50.
- Incoming domestic wire transfer: $0 to $15.
- Incoming international wire transfer: $0 and $30.
Transaction type
Bank transfers and wire transfers are typically used for different types of payment.
Bank transfers are typically used for bill payments, receiving paychecks from employers and sending money to and from friends and family. On the other hand, wire transfers are best for sending money internationally and when you need the money to arrive at the recipient quickly. They’re also good for large transactions, such as purchasing a home or car.
Transaction limits
Financial institutions limit the amount of money you can transfer through wire and bank transfers. However, the limits are typically higher with wire transfers. For example, Chase Bank allows total wire transfers of up to $250,000 per business day (compared to limits of just $25,000 for bank transfers on most accounts).
Reversals
Sometimes, you may decide not to proceed with a transfer. Depending on whether you’re using a wire or bank transfer, you may be able to reverse the transfer once it’s started.
Bank transfers can be reversed for various reasons, such as making a duplicate payment or starting the transfer for the wrong amount. However, you can’t reverse the transfer if you lack the funds. Wire transfers, on the other hand, are more difficult to reverse. Once the transfer has been approved, the transfer of funds will generally proceed.
Alternatives to wire transfers and bank transfers
Before sending money via wire or bank transfer, consider these alternatives:
Venmo
Venmo is a great option for sending money to others in the United States. Using a debit card or bank account to fund the transaction does not incur a fee. However, there is a 3% fee for credit cards. You can send up to $60,000 per week if you've verified your account.
Zelle
A Zelle account is a great way to send money to friends, family or businesses. Zelle has partnered with over 2,000 banks and credit unions, and if your institution accepts Zelle transfers it is usually available in your banking app. While Zelle is free, each bank or credit union sets its own transaction limits. You can still use the Zelle app even if your bank doesn’t accept it, but the limit is $500 per week to send money and $5,000 to receive it.
PayPal
PayPal is another option for sending money. Sending money to friends and family in the United States using your PayPal balance — or via a bank account — is free. However, there is a bundled transaction fee of 2.9% of the transaction amount, plus a $0.30 transaction fee if you use a debit or credit card.
The AP Buyline roundup
Wire transfers and bank transfers are great options for sending money. However, before you decide on the best option for your situation, it’s important to consider where and why you’re sending money.
Wire transfers are ideal when sending money internationally, but they involve fees. If you use a bank transfer, the transaction limits are generally lower, but you can complete it with little to no cost.
Frequently asked questions
Is Zelle a wire transfer?
Zelle uses ACH payment methods to send money between accounts. Zelle does not use wire transfers.
Why would someone use a wire transfer?
Wire transfers are a great way to send money internationally or when you need to send money fast. In most other cases, a bank transfer or app will be less expensive.
AP Buyline’s content is created independently of The Associated Press newsroom. Our evaluations and opinions are not influenced by our advertising relationships, but we might earn commissions from our partners’ links in this content. Learn more about our policies and terms here.
