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Eliminating Fees

Bank of America Is Now A Good Option for Unbanked

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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This week, two new products have been announced that specifically target the un-banked:

  • Citibank Access Account
  • GoBank, in partnership with Wal-Mart

Nearly 10 percent of Americans do not have bank accounts, and these new products promise to make it easier and cheaper for people to enter the banking system. These accounts come after the introduction of Bluebird (by American Express), Safe Balance (by Bank of America) and Opportunity (by Wells Fargo).

If you need access to a basic account, but have difficulties opening an account (because of bad previous history that is now reported on your Chexx Report), or you want to avoid the high overdraft fees, these accounts could be for you.

None of the accounts offer the ability to borrow money. So, you should only view these as low-cost transaction accounts, and will need a separate strategy (like a credit card from your local credit union) for any borrowing needs you might have.

We have reviewed the products to see which offers the best deal.

No account is perfect. In summary:

  • If you need to write personal checks, and you don’t mind a six day hold on check deposits, then BlueBird is for you
  • If you don’t need to write checks, then:
    • Citi is best if you have a monthly direct deposit, or you can keep at least $1,500 in your account
    • Bank of America is best if you don’t have a direct deposit or high level of funds to keep in the account

And the cheapest account is….

Bluebird by American Express is the cheapest account:

  • $0 monthly fee, with no direct deposit requirement and no minimum balance requirement
  • No overdraft and NSF fees
  • MoneyPass ATMs are free; $2.50 at other ATMs

If you have a monthly direct deposit, you can have a fee-free account at GoBank, Wells Fargo or Citi. However, GoBank has long check hold times, and Wells Fargo still has expensive overdraft fees.

If you do not have a direct deposit, then Bank of America is the cheapest. And if offers BillPay.

The most services are offered by….

Bluebird by American Express enables BillPay and the ability to write checks. None of the other accounts offer check writing.

If writing checks is not important, you still have access to BillPay at Bank of America, Citi, Wells Fargo and Go Bank.

Ability to Deposit Funds

The banks enable access to their branch and ATM network. In addition, for any deposited check, $200 would be made available on the next business day.

However, Bluebird and GoBank have very long hold times (they do not promise less than six days).

In Conclusion

None of these products are perfect, but they could be useful if you need access to a bank account.

If you don’t deposit checks, than BlueBird could be a great option. The Wal-Mart cash register becomes your branch, and you can keep this account completely free. However, the long hold time may make this account impossible to use.

If you do need to deposit checks, and don’t have a direct deposit, than Bank of America has the best offer. You will need to pay $4.95 per month, but you get access to the entire Bank of America network.

Unfortunately, none of these products offer overdraft protection at reasonable prices. If you need to borrow money, you will need to find other options.

Do you have experience with being “unbanked” you’d like to share? Get in touch withus on Twitter, Facebook, email ([email protected]) or in the comment section below.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at [email protected]

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Eliminating Fees

What You Need to Know About Wire Transfers

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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Need to send money quickly? Or maybe someone wants to send money to you fast. If so, a wire transfer might be the solution.

In some cases, like closing on a new home, it might even be a requirement. But the term wire transfer is often confused with other types of electronic transfers including services from places like Western Union, ACH transfers and peer-to-peer payment apps such as Venmo or Square Cash. We’ll explain the differences and how to complete a wire transfer safely.

What is a wire transfer?

Speed is what sets a wire transfer apart from the other services we mentioned earlier. With a wire transfer, you can send money electronically from your bank account to another person’s or company’s bank account instantly. And if you are owed money, a company or individual can send money to you with the same speed.

If you are sending a wire transfer domestically — to another individual or company in the United States — the funds you are sending should be available during the same business day. If you are receiving funds from a company or individual based in the country, you should also receive those dollars in your account the same day.

Wire transfers happen quickly because they are electronic. When someone asks for a “bank wire,” a bank or credit union sends funds to an account holder at another bank or credit union through an electronic network. The most common of these networks are SWIFT, Fedwire or the Clearing House Interbank Payments System known as CHIPS.

There are two main types of wire transfers: domestic and international.

  • A domestic wire transfer occurs between individuals or companies in the same country. These transfers can happen quickly. To complete a domestic wire transfer, you’ll usually just need some basic information such as the recipient’s bank name and address, the bank’s routing code, also known as its ABA number and bank account number.
  • An international wire transfer happens when a person or company sends money to an individual or company in a different country. For an international wire transfer, you might need to provide additional information. For instance, Bank of America says that you’ll need to state the purpose of the wire transfer, the currency that the recipient of your transfer is using and the recipient’s SWIFT code or International Bank Account Number, better known as an IBAN.

How to complete a wire transfer

Fortunately, wiring funds is an easy process. The fastest way usually involves signing up for online banking at your local bank and then initiating a transfer from your financial institution’s online banking portal.

Wells Fargo, for instance, recommends that its customers sign up for its online banking and then visit the “Transfer & Pay” section to enroll in its wire transfer service.

You then simply choose the recipient of your funds and the account from which you want to send your money. You might have to provide additional information if you are sending funds to a different country.

There might be a limit on how much money you can send through a wire transfer. For instance, if you a completing a wire transfer from Chase online, you can only transfer a maximum of $100,000 a day if you have a personal account at the bank. You can transfer up to your available bank account balance if you send a wire transfer through the phone or by visiting a branch in person.

Make sure, though, that you have enough funds to cover your wire transfer. Your bank won’t complete your transfer if you don’t have enough money in your account to cover the amount you want to send.

How long does a wire transfer take?

Speed is the biggest advantage of sending a wire transfer. It’s no surprise, then, that wire transfers can take as few as one business day to clear.

Gurnee, Ill.-based Consumers Credit Union says on its website that it usually takes half a business day for the funds from a domestic wire transfer to arrive in an account. If you send a transfer to a U.S. account in the morning, the funds will usually be available that afternoon.

Wiring money to international destinations takes longer, usually from three to five business days. TD Bank, for instance, says on its website that international wire transfers usually take three to five business days to close.

How much does it cost to send a wire transfer?

Most banks and credit unions will charge a fee to send a wire transfer. These fees vary according to the bank or credit union you are using.

Ally Bank, for instance, charges a $20 fee every time you wire money to another financial institution in the U.S.

Citibank, though, charges a range of fees depending on the type of account you have with the institution. Citi’s fees for domestic wire transfers range from $17.50 to $25. It charges more for international wire transfers, $20-$35. Citi does waive both its domestic and international wire transfer fees for customers with higher-level accounts.

Bank of America charges a $30 fee for outbound domestic wire transfers, $35 for international transfers sent in foreign currency and $45 for international wire transfers sent in U.S. dollars.

You might also have to pay to receive wired funds. Wells Fargo, for instance, charges $15 for its clients to receive a wire transfer.

Are wire transfers safe?

Wire transfers are generally safe, if you are wiring money to someone you know or to a company for a service provided. Even then, it’s recommended that you call to confirm wiring instructions rather than rely on emailed instructions — read more about phishing scams targeting homebuyers below.

Scams can happen when people wire money to strangers, both in the U.S. and in other countries.

The Federal Deposit Insurance Corporation says that criminals like wire transfers because the money in these transactions arrives in bank accounts so quickly. Because of this, criminals can get their money before their victims discover they’ve been scammed.

Why would anyone wire money to a stranger? The FDIC says that scammers might convince victims to wire them funds to claim their winnings from a lottery that doesn’t exist. Others might offer victims a profitable work-from-home opportunity, but require a wire transfer of funds to get this opportunity started.

The FDIC recommends that you always ignore requests from strangers asking you to wire them money. As the agency says, this is usually the sign of a scam. Anytime someone pressures you to wire money quickly, you have probably been targeted by a scammer.

A common scam? The FDIC says that a criminal might call you, saying that one of your loved ones is stranded in a foreign country and needs you to wire cash so this relative can get home.

The best way to avoid scams is to only send money to people you know and companies that have performed a service for you or from which you have ordered a product. Never wire money to a stranger, no matter how convincing a story that stranger may be telling.

Mortgage closing scams. Fraudsters take advantage of the flurry of emails common at the end of a homebuying process as the closing date approaches. A common phishing email might falsely claim that wiring instructions have changed, instructing the homebuyer to send closing funds to an account that scammers control. Even if you don’t receive any suspicious emails, it’s good to call your real estate agent or settlement agent to confirm instructions and that funds have “cleared.”

Wire transfer vs. ACH payment

Wire transfers and ACH payments are similar. Both are ways to send money from one account to another without the use of physical checks.

But an ACH payment — a payment made with the help of an automated clearing house — differs from a wire transfer because it relies on what is known as a batch process. ACH payments typically power the transactions you make when you use online banking to pay bills.

Your bank will receive ACH transactions in a batch, which are then processed by the Automated Clearing House. Then, these transactions are dispersed to the proper bank accounts.

Because of this extra step, it takes longer for the money from an ACH transaction to show up in your account. The money could appear in your account the next business day, though this can vary depending on your bank.

Alternatives to wire transfers

You could always choose a personal check or cashier’s check, but if you want to send money to another source electronically, you do have some other options. However, if you’re looking to skirt your bank’s wire transfer fees, several of these have fees of their own.

Apps: You can use financial apps such as PayPal, Square Cash and Venmo to send money to service providers and individuals. Beware, though, that “instant” transfers usually carry a fee — Venmo, for example, charges $0.25 for a transfer to an eligible Mastercard or Visa debit card.

Be careful with these, though. As with wire transfers, you might fall prey to a scammer. Never send money to a stranger. And if someone you don’t know requests money from you through an app such as PayPal or Venmo, don’t send anything unless you can verify that the request is legitimate.

ACH transfers: As mentioned above, Automated Clearing House transfers — better known as ACH transfers — can help you move money from your bank account to the account of another. The money, though, often won’t show up for several business days.

Most banks don’t charge ACH fees, but Bank of America is an exception, charging $3 for its customers to send an ACH transfer to another bank account.

Money transfer services: Western Union or MoneyGram transfers are sometimes called “wires” and although you could walk into a Western Union store today, send money (for a fee) to your sister in Dubuque, Iowa, that she pockets a few minutes later, it would take longer to show up in her bank account.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Dan Rafter
Dan Rafter |

Dan Rafter is a writer at MagnifyMoney. You can email Dan here

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