Whether you are sending money across the country or overseas, wire transfers are one of the easiest and most common methods of transferring funds. The wire transfer system is archaic so it is no surprise that there often fees along the way. Knowing the basics about wire transfers can help you to save money!
Clients are often surprised and disappointed to learn that sending $1000 doesn’t necessarily mean that exactly $1000 will arrive at the destination account. In spite of paying a fee for sending the funds, wire transfers are vulnerable to intermediary fees and incoming wire fees.
With a wire transfer, there is no physical movement of physical cash—it’s all done electronically. You can complete a wire transfer through online banking, going into your local bank branch or through a non-bank provider.
When sending a wire transfer, if the bank sending the funds does not have a direct relationship with the bank to which the money is being transferred to, there is another institution that the funds pass through (common to both the sending and receiving bank). This bank in the middle is referred to as an intermediary institution. When this happens, there is often a fee deducted from the funds by this intermediary bank. While this can happen with domestic (in-country) and international transfers, it is most common with international transfers. In addition to these intermediary fees, most banks also have incoming fees. It is not uncommon to see a bank charge anywhere from $10 – $35 to process a wire as a deposit into your account.
In addition to these unwanted fees, ‘extra services’ can also result in added fees.
Situations such as communicating with the bank after sending the wire, canceling the wire, investigating the status of a payment and amending the wire are just a few scenarios that result in additional fees.
The good news is that we can help you avoid getting tied up in unwanted bank fees. We guarantee a better exchange rate and charge half of what the bank will charge you in sending fees. We can also choose delivery methods that avoid intermediary fees altogether for many countries and we never charge to investigate the status of a wire transfer.