Are you planning to send money to your kid in college? Are you about to close a deal and expect a large payment for the transaction? Forget about sending or receiving check payments. The safest and fastest way to send and receive money is through a wire transfer. Read on to find out more…
Wire transfers can be used for large payments. Service providers prefer wire transfers as the medium of payment from corporate clients. Likewise, corporate clients prefer to use wire transfer facilities. It benefits both the sender and the recipient.
Definition Of Moving Money This Way
The basic definition of wire transfer is that it is simply sending money through electronic channels. If you want to do a wire transfer, you can go to a bank. You will be asked to fill out a form which includes the following details:
- Name of Recipient
- Name of Receiving Bank
- Branch
- Bank Account Number
- Date
- Amount to be transferred
- SWIFT Code
Once the details have been filled out, your request for wire transfer will be processed by the bank. We will further discuss the process of sending and receiving money through wire transfers later in this article.
Of these details, the SWIFT Code is very important. The bank cannot process the wire transfer without the SWIFT Code. This is a code that is used to identify banks from international locations. A bank may ask you for a Bank Identifier Code or BIC. It is the same as the SWIFT Code.
There are different types of wire transfers. Before requesting for one, sit down with the bank officer and ask him/her for the types of electronic transfer services that the bank offers.
Advantages
If you need to send out money fast, a wire transfer will be the most expedient way to do it. For business arrangements, wire transfer payments are ideal. Service providers can get paid right away. How fast does a wire transfer transaction take? If the wire transfer is done within the country, you might be able to request for a same day transaction. Check with your bank.
There are some countries whereby a wire transfer, whether from local or international sources, requires the money to pass through the principal head office of the receiving bank. The reason is to make sure the money and the ensuing transaction is legitimate. On the average however, a wire transfer from an international source may take one or two days to complete.
How Long Does It Take To Wire Money?
Theoretically, there should be no clearing period because the rate of transfer is quite fast. There should be no need for the receiving bank to keep or hold the money. Again, it would be best to check with the policies of your bank. The policy on holding money could be different based on your location.
For countries that have a high number of cases involving laundered money, a holding period might be required for wire transfers exceeding a specific amount. That said, it would be easier to claim payment through a wire transfer process than through a check.
Most entities; including people, who pay for goods and services with checks will usually execute a “cross check” payment whereby it will have to go through a clearing period. Some may even issue post-dated checks which delays payment. The purpose, of course, is for the sender to ensure the check will be sufficiently funded.
However, there is also the risk for the check to “bounce”. This is a situation where the amount stated on the check is not sufficiently funded by the account of the issuer. The bank cannot accept the check and will notify the recipient.
It is also faster to process wire transfer payments. In some cases, one day will suffice. The speed of processing would depend on where you will send it, the time you sent it, and the policies of your bank regarding wire transfers. If you have your passbook updated and the results of the wire transfer are not there, do not worry. It may take some time for the transfer to be reflected on your records.
Some banks have a lengthier procedure. The bank officer or manager may still need to run a few more procedures to have your cash ready. Does your bank have a cut-off policy? There are banks that only have wire transfer funds available for withdrawal if the transfer made the cut-off.
This is also a good idea to establish a good relationship with the bank manager. If you are in a rush to get the money out, a simple phone call may be enough to prod the bank manager to flex his/her muscles and have your money available earlier than expected.
The Process In Detail
We already discussed the process of sending money via wire transfer earlier. It is worth mentioning that the types of information requested by the bank to carry out a wire transfer may differ. The bank forms and procedure may likewise be different. However, the one constant is the SWIFT Code. Before going through with the wire transfer, you should confirm the SWIFT Code of the receiving bank.
How about when you are receiving money? The sender will go through the same or similar process as you when you sent money. This means you will have to provide the accurate details to the sender. Here’s a valuable tip: Always double-check the numbers that you are giving out. This includes your bank account number or bank phone number.
A wire transfer also entails fees. For the correct amount, check with your bank. Generally, wire transfer charges to send money will cost around $40. In contrast, the bank may charge you $10 for receiving your payment and depositing it to your account.
Please be advised that the cost of using your credit card for the wire transfer will be a more expensive option. You will have to pay interest rate charges; it is a “credit” card after all, plus transfer fees.
Are There Risks?
The first requirement for a wire transfer to take effect is for both the sender and recipient to have a bank account. Banks may have different procedures for opening an account, but almost certainly, a residential and/or office address will be required.
Therefore, if you want to reduce the risk of wire transfer transactions, safeguard your account details. Once a scammer gets hold of your account information, you will be in a dangerous position. The scammer can get all of the money that you sent then transfer it to another account. By then, it will be hard to track him/her down.
Home buyers are a target. If the seller sends you wire payment instructions via email, contact the seller and confirm the details. The email can easily be altered.
Receiving payment through wire transfer is generally much safer. Make it a point to contact the bank to check if the wire transfer has taken place.
Types Of Payments
There are other ways money can be wired electronically. Here are a few of them:
Money Transfer
These are coursed through money transfer facilitators such as MoneyGram and Western Union. These transactions can be done on the same day. If you will draw the money from your bank account, it may take a few days for the recipient to get his/her money. Credit card transactions will entail charges.
Automated Clearing House (ACH)
This type of electronic transfer is also coursed through the banks. However, the process may take days to complete.
Apps-Based Payment/ P2P & Mobile
There are apps for everything, even for sending money. Examples are PayPal, Square Cash, and Venmo. Payment through these platforms is generally safe on your mobile cell phone.