If you need to move money from one financial institution to another, you might be considering a wire transfer. Wire transfers can be a good option because they’re a fast and safe way to send money.
However, this can be an expensive option, so most banks charge hefty fees for this service. This article will explain how wire transfers work, what the average bank charges, and how you can lower or even eliminate fees altogether.
What are Wire Transfers, and How do They Work?
A wire transfer is a way to move money electronically to another person or financial institution. It’s a safe and reliable way to move money since no cash is handled. And since wires are quick, it’s a good option when you need to send money fast.
To do a wire transfer, you need the recipient’s name, address, banking information, and the amount you want to wire. Some banks will allow you to process wire transfers online, while others make you come in and fill out paperwork.
Once you’ve filled out this information, the bank will transfer the money, and you’ll be good to go. Wire transfers typically happen within a day or two, depending on the bank or institution you use.
What Different Financial Institutions Charge for Wire Fees
Wire transfer fees typically range from $0 to $30, depending on the bank or credit union. Listed below is a chart of what some of the biggest banks charge for wire transfers.
|FINANCIAL INSTITUTION||INCOMING WITHIN US||OUTGOING WITHIN US||INCOMING INTERNATIONAL||OUTGOING INTERNATIONAL|
|Bank of America||$15||$30||$16||$35 in foreign currency|
$45 in U.S. dollars
|Capital One 360||$0||$30||Not available||Not available|
|Chase||$15||$25||$15||$5 in foreign currency|
$40 in U.S. dollars
|Fidelity||$0||$0||$0||3% of foreign currency amount|
$0 if sent in U.S. dollars
|Wells Fargo||$15||$30||$16||$35 in foreign currency|
$45 in U.S. dollars
How Much Are Wire Transfer Fees?
Several different factors will determine how much a wire transfer costs. The most significant factor will be the bank or institution you’re conducting the wire transfer through.
For instance, nonbank providers tend to charge lower fees to process wire transfers. Though if you are a regular customer at a certain bank, they may give you a break on the fees.
The fees are also determined by whether you’re doing a domestic or international wire transfer. As you can see in the chart above, international wire transfers tend to be more expensive.
That’s because domestic wire transfers can be processed through one payment system, instead of multiple banking systems. And incoming transfers also tend to be cheaper than outgoing wire transfers.
International Wire Transfers
Banks and money transfer providers charge other financial institutions a midmarket rate for trading large amounts of foreign currency. However, when they convert the money for customers, they charge a higher markup. The markup is determined by the percentage of the amount being sent. You can check the midmarket rate online to see how much more your bank is charging you than the rate it pays.
If your bank doesn’t convert the money for international wire transfers, the foreign bank will do it and generally tack on their own fees. The best way to avoid these fees is by using a nonbank option for international wires.
ACH vs. Wire Transfers
If you’re looking for alternatives to wire transfers, you can also consider an ACH transfer. ACH is a safe way to transfer money from one bank account to another.
The advantage of doing an ACH transfer is that it’s usually free to complete. However, ACH transfers are less convenient than wire transfers. Wires can be completed in as little as a few hours, whereas ACH transfers typically take two to three days.
Wire transfers are a much more secure way to receive money, but it is riskier to send them. Once you’ve processed a wire transfer, it cannot be undone, even if you made a mistake. On the other hand, ACH payments can be reversed in cases of error or fraud.
Other Alternatives to Wire Transfers
People often choose wire transfers because they are a safe way to move large amounts of money electronically. But if you’re conducting a smaller transaction, there are more affordable alternatives you can consider.
For instance, your bank’s online bill pay is a great way to do a money transfer to another person safely. You can also use peer-to-peer payment options like Zelle or the Cash app. There are no fees to use the app, and the money is transferred instantly.
You can also send money through PayPal, Square Cash, or Venmo. And even Facebook Messenger provides an option for transferring money to other people.
How to Avoid Wire Transfer Fees
If you’re interested in sending money through a wire transfer, here are a few ways you can avoid or cut down on the fees.
1. Consider nonbanking providers
Banks tend to charge the highest fees for wire transfers, so you can save money by choosing a nonbanking provider. Western Union, TransferWise, and MoneyGram are all good alternatives.
2. Wire the money in a foreign currency
Some banks will give you the option to conduct wires in a foreign currency. You don’t have to have the foreign currency on hand since the bank will do the conversion for you. This can be a good way to cut down on or even eliminate the wire transfer fee.
3. Schedule recurring wire transfers
You may be able to earn a discount by scheduling recurring wire transfers. However, if you anticipate needing a money transfer on a recurring basis, your bank can probably offer you cheaper options.
4. Do it yourself instead of having the bank initiate it
Many banks will lower the fee if you do the wire transfer yourself instead of having the bank initiate it. For instance, you could earn a discount by doing a wire transfer online instead of visiting a branch and having a teller do it for you.
By doing the wire transfer yourself, you could cut down on the fees by $10. Just make sure you feel confident about your ability to initiate a wire transfer on your own. These transactions cannot be canceled, so you don’t want to make a mistake.
5. Choose a bank that offers free wire transfers
Some banks will waive the wire transfer fees for their customers. These discounts are usually given as a perk for opening more exclusive accounts with that bank.
Wire transfers are a secure way to send money electronically to another person or financial institution. They are generally considered the safest way to transfer money, but they can come with hefty fees.
You’ll need to decide for yourself whether these fees are worth it. Here are a few things to keep in mind before sending a wire transfer:
- Check with your bank to see what kinds of fees they charge. If they charge very high fees, you can switch to a bank that charges more reasonable rates.
- If you want to substantially cut down on wire transfer fees, you can look into nonbanking options like Western Union or TransferWise.
- If you only need to transfer smaller amounts of money, consider peer-to-peer payment apps like Zelle or the Cash app. These transfers happen immediately and won’t cost you any fees.