Western Union conducted the first wire transfer in 1872, and the process has remained popular to this day due to its safety, reliability and—most importantly—speed. Because transactions are no longer completed via telegraph network, they’re much faster than they were a century and a half ago. How fast is a domestic wire transfer, exactly? Here’s what businesses need to know about wiring money to recipients within the United States.
The unbeatable speed of domestic wire transfers
Domestic wire transfers typically take less than 24 hours to clear. When you consider that checks or deposits over $1,500 can be held by banks for up to 10 days, sending money via wire transfer is an easy decision. After completing a wire transfer, your recipient will have nearly instantaneous access to their funds.
Sending money via wire transfer is also faster than an Automated Clearing House (ACH) transfer. While they’re both bank-to-bank transfer methods, an ACH transfer takes at least two to three days to complete, depending on the bank.
Domestic wire transfer considerations
Wire transfers are unequivocally faster than any other way to send money. However, it’s important to note that these three factors can affect your wire transfer’s speed:
Time of day
The Expedited Funds of Availability Act (EFAA) requires all U.S. financial institutions to make wire transfers available within one business day. But, of course, banks and credit unions aren’t 24/7 institutions. If you send your transfer after the bank’s daily cutoff time (discussed below), it could take an extra day for the funds to become available. Additionally, transfers will not be completed on any federal bank holiday.
Sending vs. receiving
Where you’re sending or receiving money plays a factor in how long your transfer takes. For example, transferring money domestically via the same banking institution is almost immediate. Compare that to sending money overseas, which can take a few days depending on differences in time zones, currencies and banking systems. Each wire transfer has a unique input/output message accountability data (IMAD/OMAD) ID number. You can ask your bank to look up your transfer’s unique ID to track its status.
Method of wire
Banks can wire money in three different ways: FedWire, CHIPS and SWIFT. The FedWire system is used for transfers between U.S. institutions, and allows the transfer to be processed immediately. The Clearing House Interbank Payments System (CHIPS) processes multiple transactions at once in large batches, so the transfer might be a bit slower. More than 10,000 banks use a network managed by the Society for Worldwide Interbank Financial Telecommunication (SWIFT) for international transfers. These transfers take the longest out of the three, but are still relatively swift.
Beware wire transfer cutoff times
We touched on cutoff times above, and they play a big role in ensuring your transfer makes it to your recipient on the same day you send it. Wire transfers made after the daily cutoff time will be sent the next business day, delaying your transfer by at least a day.
Cutoff times differ from institution to institution, but they’re typically at 5:00 PM ET. Check with your bank if you think you might be close to the day’s cutoff time.
Domestic wire vs. international wire speeds
The EFFA mandates times for domestic transfers. But they don’t have any jurisdiction when it comes to international wire transfers. International transfers typically take one to five business days for the funds to arrive in the recipient’s account. However, the funds are deducted from the sender’s account immediately.
Some international transfers may take longer, though, depending on where the money’s going. Countries with a slow-to-pay designation may delay transfers for up to three weeks. You may want to ask your bank about countries on their current slow-to-pay list so that you won’t be disappointed if the funds take longer to transfer.
To help ensure international funds arrive as fast as possible, wire money through a bank with branches across the world.
Speed comes at a cost
Be advised that a wire transfer’s speed and reliability often come at a cost. Financial institutions typically charge fees for both outgoing and incoming wire transfers.
The average fee for an outgoing domestic wire transfer at a bank is $29, while an incoming transfer costs $13. If you use a credit union, though, your costs will be cheaper. The average fee for an outgoing transfer at a credit union is $22. Better yet, most credit unions don’t charge anything for incoming transfers.
There is an upside: many banks will waive fees for qualifying accounts or offer discounts for customers who set up recurring wire transfers. Be sure to shop around and look for a bank that provides the best service at the lowest possible rates. Or, explore the opportunities that come with digital payments, which offer many of the same benefits of traditional wire transfers, without the hefty transaction costs!