What is a Wire Transfer?


When moving money between accounts and making payments, we hear lots of different terms. Bank transfer, credit transfer, online transfer, and wire transfer. It can feel confusing trying to figure out what sort of money transfer you should make, so we’ve put together a short guide to understanding wire transfers.

Wire Transfer: Definition

Put simply, a wire transfer is a direct payment between two banks or financial institutions. The money is usually sent electronically through wire networks. In the US, the most common wire networks used for wire transfers are the Society for Worldwide Interbank Financial Telecommunication (SWIFT), the Federal Reserve Wire Network (FEDWIRE), and the Clearing House Interbank Payments System (CHIPS).

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How do you make a wire transfer?

Making a wire transfer usually involves going into your bank and completing a form with information about who you are sending the money to. The form usually asks for the following info:

  • The recipient’s full name and address
  • The recipient’s bank account number and BIC (Bank Identification Code) or SWIFT code
  • The recipient’s bank’s branch code and address
  • For domestic wire transfers: The recipient’s ABA (American Bankers Association) or routing number
  • For international wire transfers: The recipient’s IBAN (International Bank Account Number)

Many banks are now offering online wire transfers – check with your bank to find out what is required for your wire transfer and whether or not you need to go to the bank in person to make it.

How much do wire transfers cost?

The cost of wire transfers varies from bank to bank and may depend on whether the transfer is domestic or international. Typically, domestic wire transfers cost $25-30 whilst international wire transfers cost $45-50 and often cost the recipient an additional fee of around $15.

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How long do wire transfers take?

Domestic wire transfers usually take 2-3 days to complete – although transfers within the same bank or institution can take as little as 24 hours. International wire transfers also take 2-3 days to complete.

When would you use a wire transfer?

Wire transfers are popular for making large personal payments, particularly for payments such as a down payment on a house. Generally, you would only make a wire transfer if the recipient requires one. The fees attached to wire transfers means they are not of much use for making standard payments via your bank.

Pros and cons of wire transfers

There are advantages and disadvantages of making wire transfers. Here are the main pros and cons.


  • Quick and easy to set up – it only takes a few minutes to send a wire transfer and the recipient can expect to receive funds within a few days.
  • No waiting for cleared funds – anyone receiving money via a wire transfer will be able to use it as soon as it appears in their account, rather than waiting for the bank to clear the funds as they would do for a cheque.
  • Safer than sending a cheque – cheques can bounce whereas wire transfers require the sender to already have the funds in the account.


  • Risk of scams – hackers often target wire transfers used for mortgage payments or down payments. It is important that you make wire transfers with a trusted bank and that you are certain of the legitimacy of the recipient.
  • High fees – the fees associated with wire transfers make them much more expensive than, for example, online money transfers. If you’re making small payments to friends, you’re better off making an online transfer.
  • Difficult to cancel – once you’ve made a wire transfer, it is very difficult to reverse it or cancel it. This also means if you make a mistake when writing down the recipient’s details, you will struggle to get the money back if it goes to the wrong account.

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