About Wiring Money

We've all been there before. You're away at college or on a business trip when the unexpected happens. First, you may panic, but suddenly you remember the wonders of technology. You rush to your phone and call your best buddy and plead for money. Thanks to wire-transfer services you can receive the money in a matter of minutes or days, depending on how soon you need it. Before you wire money, however, there are a few facts you must know about wire-transfer services.

Considerations

Not all wiring services are equal. From restrictions regarding participating international destinations to slow domestic transfers and varying fees, wiring money requires a great deal of research. Most commercial firms and banks offer international wiring services; however, some only wire money to specific destinations. For example, UPS only offers wiring services to Argentina, Colombia, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua and Peru. Consumers can wire up to $2,000 with all exchange rates and fees provided.

Time Frame

As a general rule of thumb, wire transfers made through financial institutions require a minimum of one to two business days, with international transfers requiring as much as one to four additional days. Because of the documentation and transfer process required by the Federal Reserve, as well as, in some case, the use of correspondent banks, banks are not able to wire money as swiftly as privately funded commercial firms. For example, Western Union can guarantee same day delivery of all wired funds.

Fees

The fees associated with wiring money can vary greatly by type of institution, location, destination and the amount of money being wired. Generally, most banks charge a flat domestic rate for wiring services; international wiring services require an additional fee. For example, Citibank charges $20 to wire money within the United States. Bank of America charges $10 for domestic as well as international transfers. Unlike these financial institutions, Western Union fees vary by the amount of money being transferred. To wire $500, expect to pay around $43, and for a $5,000 transaction, expect to pay around $220.

International Rates

Because international rates can determine the transfer rate for international transfers, it is important to verify the exchange rate that will apply. For example, Money Gram, Western Union and Thomas Cook calculate the difference between wholesale exchange rates. Based on this variable, the retail rate is determined. Shop around for the best exchange rate.

Warning

All wire-transfer firms must have a state license. Failure to provide proof of licensure may indicate fraudulent activity. County and city licenses do not apply. The firm must have a state license. Report any concerns or suspected illegal activity to the authorities in your area.

Resources

• Banks Seek to Cash in on Money Wiring