Wire transfers are one type of electronic global payment method. Wire transfer fees are higher than costs of other types of payments. Wire transfers may be justifiable for large-dollar transactions like real estate or M&A deals and special circumstances despite the higher fees.
We explore the types and average amounts of wire transfer fees. Then we offer suggestions for ways to avoid wire transfer fees, helping your business save money.
What is a Wire Transfer?
A wire transfer is an electronic funds transfer between bank accounts or in cash through a money transfer office. Wire transfers are made through SWIFT, the Federal Reserve Wire Network (FedWire), or The Clearing House Interbank Payments System (CHIPS). Financial institutions, including banks, credit unions, and brokerage firms, and money transfer providers send and receive wire transfers.
What are Wire Transfer Fees?
Wire transfer fees are the cost of the payer sending and the payee successfully receiving a wire transfer. The costs of receiving a wire transfer may include primary and intermediary bank fees, costs of investigating a wire transfer not received, a reversal fee for sending a wire transfer to the wrong account, foreign currency conversion fees, and miscellaneous fees.
Are Wire Transfers Used for Domestic and International Transactions?
Yes, wire transfers are used domestically in the U.S. and internationally in countries with banks that process and accept international wire transfers. Wire transfers are offered and accepted in most countries.
According to Chase bank, domestic wire transfers are usually received within 24 hours, and international wire transfers may take 1-5 business days for processing before the payee receives the money.
Money transmitters like Western Union may send money more quickly (in minutes) using wire transfers.
What Information is Needed for a Wire Transfer?
To send a wire transfer, you need to complete outgoing wire transfer instructions, which includes:
• The names and account information, including contact information, of the sender and recipient
• The bank routing numbers, bank accounts, and bank name and address for the sender and recipient
• Swift code/BIC of the recipient
• The amount of money for the wire transfer being sent
• The date of the wire transfer remittance
In the U.S., routing numbers for an outgoing domestic wire transfer transaction are ABA
for domestic transfers and SWIFT code for international transfers. An alphanumeric standard format IBAN (international bank account number) is used for internationally sent wire transfers, indicating the country code and other identifying routing number information. International banks use BIC (bank identification code) as an identifier. The IBAN includes the BIC bank routing number.
The wire transfer recipient may need to complete incoming wire transfer instructions through a form from the recipient’s bank. The recipient’s bank is called the receiving bank. The payer’s bank is called the sending bank or originating bank.
Once the money is sent through a wire transfer, getting the funds back may not be possible if the wire is sent to the wrong recipient or bank account. Be extra careful to double-check your information. Although, in theory, you can cancel a wire transfer, that cancellation is only before it’s processed.
Wire transfers can be sent either through a local bank branch or an online banking form. To send a wire transfer, the sender may need to present identification from a government-issued source. Check your bank’s pricing to determine if it’s cheaper to send a wire transfer online.
For wire transfers, although a checking account is generally used as the sender’s bank account and recipient’s account, savings accounts, or money market accounts may be used instead.
Who Pays the Fee for a Wire Transfer?
The sender and the receiver may both pay wire transfer fees.
How Much Does a Wire Transfer Cost?
The following table shows the average cost of incoming and outgoing domestic and international wire transfer fees that financial institutions like banks charge.
|Outgoing Wire Transfer Transaction Fee
|Incoming Wire Transfer Transaction Fee
|Additional Fees for Wire Transfers – Description
|Additional Fees for Wire Transfers – Amount
|Intermediary bank fees, investigation tracing, if not received, and foreign currency conversion fees, if applicable
According to NerdWallet’s survey, the following banks may offer zero wire transfer fees or waive wire transfer fees for eligible bank accounts meeting the terms of the offer:
- Bank of America (only outgoing international sent in foreign currency using current exchange rates instead of U.S. dollars (USD))
- Capital One 260 (only for incoming domestic and incoming international and in-branch for outgoing international with eligible accounts )
- Chase bank (only incoming domestic and international if from Chase and outgoing international of $5,000 or more)
- Fidelity (all types with some restrictions)
- HSBC Bank (only fees waived for some eligible accounts – excludes incoming domestic)
- PNC Bank (only incoming domestic and outgoing domestic may be waived for eligible accounts)
- USAA (only incoming domestic and incoming international)
Ask your bank or other financial institution to verify current wire transfer rates by type, including eligibility for potential fee waivers.
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How to Avoid Wire Transfer Fees
Consider the following ideas and think of more ways to avoid wire transfer fees.
Select a bank or other financial institution that may reduce or waive wire transfer fees or offer lower costs than competitors.
Not all banks or financial institutions charge fees for types of wire transfers. Some reduce wire transfer fees or offer fee waivers to eligible accounts. Special conditions may include using online banking, sending international wire transfers in-branch, or sending money already converted to foreign currency.
Contractually transfer the cost of wire transfer fees to the payee.
In a commercial transaction, the sender may state that the recipient will pay wire transfer fees to offload those costs.
Factor bank wire transfer costs into pricing.
When establishing product or service prices, consider including wire transfer fees as a cost element to cover in setting the price.
Choose less expensive payment methods instead of wire transfers.
Because wire transfer costs are the most expensive payment method, consider options for other payment types to replace the wire transfers when feasible.
Are There Other Options?
Yes. You can choose other options to avoid paying wire transfer fees to transfer funds. Other payment method options besides the choice to wire money include:
ACH Transfers (Automated Clearing House)
For domestic wire transfers in the U.S., ACH payments are a significantly lower-cost option. ACH transfer doesn’t work for international transactions.
Global ACH (eCheck)
Global ACH, also called eCheck, is used internationally and for cross-border payments through systems similar to the U.S. ACH clearing house network.
Credit Card Payment
Using a credit card to make a money transfer is less expensive than a wire transfer fee. Check the costs for your credit card, including any currency conversion fees, and its capability to pay in the foreign countries that match your business needs.
Prepaid Debit Card Payment
Some money transfer services issue prepaid debit cards to recipients to transfer funds. The costs are low.
Account-to-Account Payments (eWallets)
With a payment service, a method offered includes making a money transfer between member accounts. These payment service members may have branded eWallets for online transactions.
Consider using PayPal for making domestic and international PayPal transactions to transfer money. PayPal can make account-to-account payments. Recipients need a PayPal account to claim the money in the remittance sent to them. PayPal’s related company, Venmo, also remits money transfers to recipients.
Zelle is a money transfer service from the sender’s bank account to the recipient’s bank account. Several banks offer the payment service, Zelle, through their online banking apps. The sender doesn’t need to know the recipient’s bank account number and can use the recipient’s phone number and email address to send the money.