Understanding the Distinction between ACH and Wire Transfers

3 min read

Differences between ACH and Wire Transfers

Electronic fund transfers have become a popular and convenient way to move money from one account to another. Two of the most common types of electronic transfers are Automated Clearing House (ACH) and Wire Transfers. While both serve the same purpose of transferring funds, there are some key differences between the two. In this article, we will explore the differences between ACH and wire transfers to help you choose the best option for your needs.

What is ACH Transfer?

Automated Clearing House (ACH) is a type of electronic transfer system that enables the transfer of funds between different bank accounts. It is a secure, reliable, and cost-effective way to move funds. The ACH network is used for a variety of transactions, including direct deposit of paychecks, bill payments, and business-to-business payments.

How ACH Transfer Works

  • ACH transfers are initiated by the receiver, who provides their bank account and routing number to the sender.
  • The sender initiates the transfer by providing their own bank account and routing number and the amount to be transferred.
  • The transfer is then processed through the ACH network, which debits the funds from the sender’s account and credits them to the receiver’s account.
  • ACH transfers typically take 2-3 business days to complete.


What is a Wire Transfer?

A wire transfer is an electronic transfer of funds between two parties. Unlike ACH transfers, wire transfers are processed almost instantly and are typically used for larger transactions.

How Wire Transfer Works

  • To initiate a wire transfer, the sender provides their bank account information and the recipient’s bank account information to their bank.
  • The sender’s bank then sends a message to the recipient’s bank, instructing them to credit the recipient’s account with the specified amount.
  • Wire transfers are typically more expensive than ACH transfers and can cost between $10 and $50 per transaction.


Key Differences between ACH and Wire Transfers

  • Speed: ACH transfers and wire transfers have a very similar timeline, generally taking between 2-3 business days.
  • Cost: ACH transfers are generally less expensive than wire transfers, with many banks offering them for free. Wire transfers, on the other hand, can cost between $10 and $50 per transaction.
  • Purpose: ACH transfers are commonly used for smaller transactions, such as payroll deposits and bill payments. Wire transfers are typically used for larger transactions, such as real estate purchases or international transfers.


Which is Better – ACH or Wire Transfer?

Choosing between ACH and wire transfer depends on your specific needs. If you need to transfer a large amount of money quickly, a wire transfer may be the best option. However, if you are transferring a smaller amount of money and can wait a few days for the transfer to complete, ACH transfer may be a better option as it is typically less expensive.

What can Veem do for you?

We use Multi-Rail Technology, a sophisticated payment routing model that optimizes delivery, gives control back to businesses and provides them with an unprecedented payment experience. Payment Rails are chosen based on a combination of things, such as sending and receiving country, currency, amount and speed. Our goal is to find the most effective and efficient way for businesses to send money.

Whether we need to send the payment via ACH or wire transfer, Veem takes the guesswork out of it for you. We will always use the best method available to deliver your payment quickly and securely.


Both ACH and wire transfers are reliable and secure ways to transfer funds electronically. Understanding the differences between the two can help you choose the best option for your specific needs. Whether you choose ACH or wire transfer, it’s important to always verify the recipient’s information and ensure that you are sending the funds to the correct account. Ready to let Veem take the guesswork out of sending payments? Sign up today!



* This blog provides general information and discussion about global business payments and related subjects. The content provided in this blog ("Content”), should not be construed as and is not intended to constitute financial, legal or tax advice. You should seek the advice of professionals prior to acting upon any information contained in the Content. All Content is provided strictly “as is” and we make no warranty or representation of any kind regarding the Content.