How to Wire Money Safely - MagnifyMoney

How to Wire Money Safely

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Wiring money is an easy way to directly transfer funds between two bank accounts, and it can be accomplished by gathering the correct documentation and following the instructions of your provider, whether that’s your bank or a wire transfer company. However, it’s important to keep in mind the risks associated with wiring money and understand how to best protect yourself from fraud.

This article covers what we feel you should know about wiring money.

What is a wire transfer?

A wire transfer is a direct, digital money transfer between two bank accounts, which does not need to be cleared by a third party. Domestic wire transfers can be completed in as soon as one to two business days.

How do you wire money?

To wire money, you can typically expect to take the following steps:

1. Select your provider

When wiring money, you have to decide whether you want to use a bank — such as Chase, Wells Fargo or Bank of America — or a wire transfer company — like Western Union, TransferWise or MoneyGram — as the provider. Providers can vary on factors such as the fees they charge, how long it takes for the payment to be delivered and more, so be sure to do your research ahead of time.

The core benefit of opting for your bank as opposed to a wire transfer company is you’ll likely pay less in fees, but money transfer companies can provide more convenience, as many allow you to initiate wire transfers entirely online.

2. Gather the required information

To set up a wire transfer at a bank, you will need to provide the recipient’s personal and bank account information. More specifically, this includes the recipient’s:

  • Name
  • Account number
  • Bank routing number and SWIFT code (if needed)
  • Mailing address with city, region, country and postal ZIP code

Some banks have different routing numbers for different types of transactions. The routing number for direct deposits and ACH transfers might be different from the one used for wire transfers, for example. It is critical to find the right routing number for the type of transaction you intend to make. If you’re not sure which routing number to use, you may contact your bank for help.

If you’re expecting to receive or send a wire transfer from or to an international account, you’ll need a Society for Worldwide Interbank Financial Telecommunication (SWIFT) code, which is used internationally to identify specific banks. It’s the international version of a routing number. As with a routing number, you may find the SWIFT code on your bank’s website or by calling a bank’s branch location.

3. Calculate the costs

Before making any type of financial transaction, it’s important to calculate the costs — wire transfers are no different. While fees for wire transfers can vary based on the provider, they typically average between $25 to $30 for outgoing transfers within the U.S., and can climb up to $50 for international transfers.

You can also face a fee for receiving a wire transfer, not just for sending one. These fees tend to be around $15.

4. Initiate the wire transfer

The actual process of wiring money will vary based on your provider, and while some allow you to wire money without visiting a branch, others may require an in-person visit. Be sure to verify any fees you may be charged, as well as the amount of the exchange rate (if applicable), as it can vary among providers.

In many cases, your provider will require you to fill out a form in order to initiate the transfer. Fill out the form carefully with accurate information, and keep your receipt.

Are wire transfers safe?

Wire transfers are safe, but they are also often used by scammers to commit fraud, so you should proceed with caution.

A wire transfer is fast and immediate, and con artists often take advantage of its speediness and the fact that it’s irreversible. Wire transfers happen so fast that it’s possible for a fraudster to seize money from your account before you even realize that it’s missing. So, it’s critical to stem your risk of wire transfer fraud.

Stay safe by taking the following steps:

  • Protect your information: Never give out your bank account information, credit card number or Social Security number to advertisers or unsolicited callers, or to anyone via text message or email. Swindlers can get a hold of that information to steal money from your account via wire transfer. Make sure that your electronic devices, such as computers, phones and tablets, are safe and that the internet connection you use is secure. This will reduce the risk of having your financial and personal information stolen.
  • Never wire money to anyone you don’t know: Don’t fall for enticing stories or work opportunities presented to you by strangers. If someone you don’t know asks you to wire money, think carefully about who is making the request.
  • Beware of common scams: Be aware of common scammers’ baits. This can include work-from-home offers, deals on products for sale or news that you have won some kind of lottery.
  • Be wary of cash wire transfers: Problems that arise from wire transfers are often related to cash wire transfers, like the ones people make via Western Union or MoneyGram. These companies do not verify the identity of the sender nor the recipient. This means that fraudsters with false identities can easily swoop in to collect money on the other end.
  • Check your bank statements regularly: Keep an eye on your bank statements. If there’s a suspicious transaction, inform your bank as soon as possible.

If you think you may have wired money to a scammer, file a complaint with the Federal Trade Commission online or call 1-877-FTC-HELP.

Other ways to send money electronically

ACH vs. wire transfer

ACH transfers occur between financial institutions, and are conducted through a third-party clearinghouse. Because wire transfers are direct bank-to-bank transactions, they are faster than automated clearing house (ACH) transfers. However, because they are faster, wire transfers are also more expensive than ACH transfers, which are usually free. Meanwhile, the average fee for sending money via wire transfer ranges from $20 to $35.

P2P payment app vs. wire transfer

Wire transfers have a lot in common with P2P payment apps, like Venmo or PayPal, as they both can provide immediate money transfers. While many P2P payment apps offer their services for free (as opposed to the fees that can be charged for wire transfers), they are generally not recommended for more formal requests of payment. Instead, you might want to opt for a wire transfer, which provides you with proof of payment and added layers of security.