What Is a Wire Transfer? And How Do They Work?

Written by Kim PinnelliUpdated: 12th Oct 2021
Share this article

Disclaimer: This post contains references to products from one or more of our advertisers. We may receive compensation (at no cost to you) when you click on links to those products. Read our Disclaimer Policy for more information.

A wire transfer is one of the fastest ways to move money. It doesn’t work in every situation, and it does cost money, but if you need a safe and fast way to move money, a wire transfer may be your answer.

Here’s everything you must know about wire transfers.

What Is a Wire Transfer?

A wire transfer is a transfer of funds electronically from one bank to another. Wire transfers also occur through services like Western Union. Despite its name, no money actually exchanges hands.

Instead, the wire contains instructions regarding who will get the money and the bank account it’s coming from.

How Does a Bank Wire Transfer Work?

You can initiate a bank wire transfer at your local bank or online bank. You can send a domestic wire (within the United States) or international wire (abroad).

When you send a wire, you must provide the bank with the following information:

  • Bank account numbers for the sender and recipient
  • Name and address of the recipient
  • The bank name and ABA number where you are sending the money

Most wires leave and arrive on the same day, sometimes immediately after you initiate it. Some banks only send wires in batches, though, which may delay your transfer slightly.

>> Next Steps:Best Ways to Send Money

How Much Do Wire Transfers Cost?

Unlike other electronic payments, such as transferring funds from your bank account to another using Zelle, wire transfers cost money.

How much they cost vary by bank, the amount you’re sending, and where you’re sending the money (domestic or abroad).

On average, wire transfers cost $15 – $50, but some bank accounts include free wire transfers in the account.

Wire Transfers Pros and Cons


  • You can transfer funds almost instantly unless there is a delay, or the bank operates in batches
  • The funds are available immediately upon receipt
  • There’s no risk of a bounced check


  • Most wire transfers incur a fee
  • A hacker could imitate the receiver and intercept the funds
  • You can’t cancel it once you start

What Is the Difference Between a Wire Transfer and an Electronic Fund Transfer?

Electronic transfers are transfers you make between bank accounts at the same bank or to an outside bank account using your debit card, credit card, or ACH transfer.

Electronic transfers can take a day or two since they aren’t automatic. They have to go through the clearinghouse before the funds can transfer.

A wire transfer is automatic. The funds are verified on the sender’s end and sent directly to the recipient’s bank account.

Most wires are completed the same day, and the funds are immediately available in the recipient’s account.

What Information Do You Need to Complete a Wire Transfer?

To complete a wire transfer, you need the recipient’s personal information and bank account information.

You must ‘address’ the wire to the right bank using the ABA and routing number, along with the recipient’s name, address, and bank account number to ensure it reaches the right person.

Are Wire Transfers Safe?

Wire transfers to a bank are generally safe. Most hackers won’t show up at a person’s bank and try to impersonate them.

But wire transfers sent to a Western Union or other retail store could be risky as it could be easy for someone to impersonate the receiver and take the funds.

When Should You Use a Wire Transfer?

Most people wire funds for large transactions, such as buying a house. You can’t show up to the closing with a personal check, and some title companies don’t even accept a certified check.

They want funds in the account that they can disburse to the appropriate parties.

Another common situation to wire funds is when sending money abroad. It’s typically the safest and fastest way to send money when sending it out of the country.

Alternatives to Wire Transfers

#1. ACH Transfers

Automated Clearinghouse transfers are also bank-to-bank transactions, but they go through the clearinghouse. They typically take one to two business days to clear.

You can initiate an ACH transfer within the same bank or to an outside bank as long as you have the recipient’s information.

>> More: ACH vs. Wire Transfers 

#2. Professional Money Transfer Services

Companies like Western Union offer the same wire transfer services as a bank but for higher fees.

You must pay the sending Western Union in cash, and they’ll wire the funds to your recipient, but your recipient must be able to retrieve the funds from a Western Union store.

#3. Payment Tools

  • PayPal: You can send money with PayPal to friends and family or even pay retailers for your purchases. The money comes out of your PayPal account if you have a balance or your linked checking account. The money usually takes one to three business days to clear.
  • Venmo: Venmo is a Bank-supported transfer app. You link your bank account or initiate the transfer from your bank’s website. Venmo transfers funds to friends and family (and some retailers). The funds typically take one to three business days to clear.
  • Transfer Wise: TransferWise (Wise) offers cheaper international wire transfers abroad. You can send and receive in 10 different currencies and get paid right in your TransferWise Account, using your TransferWise debit card to access the funds.
  • Zelle: Zelle is another Bank-supported transfer app. Access it from your bank’s website, link your checking account to your Zelle account, and transfer funds to friends and family. Transfers take 1 to 3 days.

Bottom Line: What Is a Wire Transfer?

A wire transfer is a fast way to send or receive money either domestically or abroad. It’s generally safe when you have the recipient’s correct information and your recipient is expecting the money.

Domestic wire transfers happen instantly, sometimes the same day, but wire transfers sent abroad may take a little longer.

Keep Reading:

Kim Pinnelli
Kim Pinnelli

Kim Pinnelli is a Senior Writer, Editor, & Product Analyst with a Bachelor’s Degree in Finance from the University of Illinois at Chicago. She has been a professional financial writer for over 15 years, and has appeared in a myriad of industry leading financial media outlets. Leveraging her personal experience, Kim is committed to helping people take charge of their personal finances and make simple financial decisions.