Have you been wondering about the difference between a bank transfer and a wire transfer? Bank transfers and wire transfers are both methods you can use to move money from one bank account to another, but there are differences between the two. Learn what makes each type of transfer unique, and how to decide whether a bank transfer or a wire transfer is right for your needs
What is a Bank Transfer?
A bank transfer generally refers to a process where money is moved electronically between bank accounts, typically within the same country or region. Bank transfers are especially useful for moving money back and forth between accounts within the same bank, though it is also common to use a bank transfer to transfer money between accounts in different banks, provided all banks involved are located within the same country.
Types of Bank Transfers
There are a number of different types of bank transfers. Some of the most common bank transfers include the following:
Automated Clearing House (ACH) transfers are commonly used in the United States to transfer money from one bank account to another, typically for recurring and routine purposes like payroll direct deposits, bill payments, and online transfers between accounts.
Online banking transfers refer to the electronic movement of funds from one bank account to another using Internet banking services, like a bank’s website or mobile app. This method allows individuals or businesses to transfer money between accounts within the same bank or across different financial institutions.
Internal Bank Transfers are the movement of funds between accounts held within the same bank or financial institution. It's a transaction where money is shifted electronically or manually from one account to another, both of which are under the control and management of the same banking entity. If you move money between your checking account and savings account, when both accounts are serviced by the same bank, you have made an internal bank transfer.
Benefits of Bank Transfers
For most regular bank customers with everyday banking needs, bank transfers are a safe and cost-effective way to move money between bank accounts, and/or to pay bills. Bank transfers are often used for routine transactions like salary deposits, bill payments, or transferring money between personal accounts. There is often no cost to the customer to make a bank transfer of money, and transfers tend to be processed quickly, anywhere from almost instantly up to a couple of days, so funds being transferred are soon available.
Risks of Bank Transfers
The good news is that bank transfers tend to be very safe, as they are directly overseen by the bank(s) involved. However, any banking customer should protect themselves against fraud by protecting their personal information and account details. An unauthorized user who has access to this information can use it to gain access to your account and make fraudulent transactions. For this reason, it’s important always to keep your personal and account information confidential, use hard-to-guess passwords, and change your passwords frequently.
What is a Wire Transfer?
Wire transfers are a specific type of bank transfer that involves sending money from one financial institution (bank or credit union) to another across different countries or currencies. A wire transfer moves money by transferring funds from one bank or financial institution to another using a network such as SWIFT (Society for Worldwide Interbank Financial Telecommunication) or other systems. Wire transfers are often used for larger monetary transactions because they are fast, secure, and allow for sending money across long distances or internationally. Typically, wire transfers involve fees charged by banks for processing the transfer.
How to Send a Wire Transfer
You can send wire transfers through banks, money transfer services, or online banking platforms. To complete a wire transfer, you will need information about your recipient, including the account number and routing numbers. For international transfers, you will also need to input the SWIFT code, the International Bank Account Number (IBAN), and any other details required by your bank or money transfer service. Most wire transfers incur a fee, so be prepared to have extra money on hand to pay the fee at the time of the transfer. Wire transfers can take anywhere from a few hours to several business days, depending on the banks involved and whether the transfer is domestic or international. However, most wire transfers are completed within the few hours range. After completing a wire transfer, you'll receive a confirmation, and the recipient's bank should credit the funds directly to their account.
Key Differences Between Bank Transfers and Wire Transfers
Though both types of transfers are relatively speedy, wire transfers are generally faster than regular bank transfers, especially for international transactions. Due to their speed, and because they tend to be used more frequently for international money transfers, wire transfers often incur higher fees than standard bank transfers. Bank transfers are commonly used for domestic transactions, while wire transfers are more suitable for international or larger transfers.
Choosing the Right Method For You
Before you decide to make a bank transfer or wire transfer, consider your own needs. Are you sending money within the country you are located in, or are you sending money internationally? Are you sending an especially large sum of money? Are you sending money to an individual, remitting payment for a good/service, or paying a bill? Answering these questions will help you decide which type of transfer is right for you. Money transfer services like Sharemoney make it easy for you to transfer money internationally to family and loved ones securely, and often with lower fees than banks.