What Is a Wire Transfer?

A wire transfer, also called a bank transfer or credit transfer, is a way to electronically send money from one person or entity (such as a company) to another person or entity.

The main advantages of this type of electronic transfer are:

  • Funds usually arrive quickly
  • It is secure, since the transfer is sent through banking networks
  • It can be used for large transfers, unlike services such as Zelle, which usually have daily limits

Domestic Transfers

Within the United States, using a wire transfer between two personal bank accounts is usually very fast. In my last test, my friend only needed my routing number and account number to send me money. If you are not sure about your routing number, you can usually find it on your check. If not, you can also Google it. Just make sure you are using the routing number for domestic wires, since the routing number for international transfers is often different.

After my friend completed the wire on their side, I refreshed the webpage and the funds showed up immediately. That said, the downside is the fee. In this example, we used Chase to send money to another Chase account, and my friend was charged a $15 fee. As the recipient, I was not charged anything.

So for smaller domestic transfers in the U.S., Zelle is usually the better option. It may be a little slower, and sometimes you may need to wait 1 day for the funds to appear. If timing is not important, you can also use a check: just send a picture and deposit it through your bank’s mobile app.

International Transfers

International wire transfers are likely very familiar to international students and anyone sending money to a bank in China.

You usually need to provide more information here:

  • The recipient’s name and address
  • The bank’s name
  • The bank’s SWIFT code
  • The account number

In terms of timing, the funds usually show up in about 1 day. Of course, international wire transfers generally cost more. Using Chase as an example, the recipient may be charged a $15 fee deducted from the incoming transfer amount after the sending bank in China has already taken its own outgoing transfer fee. I also checked that if you send an international wire through Chase, the fee is $5 when sending foreign currency, and $40 when sending U.S. dollars.

Below are the domestic and international wire transfer fees charged by several well-known banks, sourced from here.

Sending Money Between China and the U.S.

Transfers between China and the U.S. are something many people may run into. One important point is that for a Chinese bank’s SWIFT code, it is best to get it directly from the specific branch or by calling the bank’s customer service, otherwise it is easy to make a mistake. In addition, RMB-to-USD transfers from China to the U.S. are subject to foreign exchange controls, with an annual limit of $50,000 per person. When making the transfer, you also need to state the purpose of the transfer. If you use multiple relatives’ accounts in China to send money to one U.S. account, it may also trigger review and possibly get you blacklisted.

Also, inbound transfers from overseas to a personal account in China may sometimes be frozen by the bank. The bank may ask you to explain the source of funds or provide supporting documentation, otherwise the money may be returned by the bank in China.

No matter what, be sure to verify all required information before sending the transfer. If a wire transfer is sent incorrectly, recovering the money can involve multiple parties, and sometimes an intermediary bank as well. International transfers are even more troublesome. If you are not too concerned about fees, it may be better to first send a small amount and then send the rest after confirming everything works correctly.

My Take

Overall, wire transfers are very convenient, secure, and fast for large transfers. As for fees, it is usually more cost-effective to accumulate some money and send it in one batch. For example, if you need to send money home every month and it is not urgent, it may make more sense to save it up and send it once every six months or once a year. For smaller domestic transfers, though, Zelle is generally the better choice: no fee, secure, and fairly fast.

To summarize:

  • Pros: Can be done online, and money can be sent in both directions. Funds arrive relatively quickly, limits are higher, and you can send money to almost anyone.
  • Cons: You need to gather the required account information. There are fees, which differ for domestic and international transfers. Once sent, it is very hard to reverse.

For introductions to other transfer methods, see: