A wire transfer is a secure electronic method of transferring funds between individuals and bank accounts, either domestic or international. While the fees are often higher than other methods of sending or transferring money, the speed and security of a wire transfer make it a valuable financial tool.
The time it takes for a wire transfer to complete can depend on a few factors, including where you're sending the money and what currencies are being used. Typically, though, a domestic wire transfer can be done within the same business day while international transfers may take up to 5 business days.
Our guide to money transfers will explain how and why you might choose this method of money transfer for yourself.
Key Takeaways
- A wire transfer is a secure method of electronically transferring funds between individuals and bank accounts, both domestic and international.
- The 6 steps required to send a wire transfer begin with gathering your banking information and end with receiving a notice of completion from your bank.
- The sender usually pays the wire transfer fees, anywhere from $5 to $80, but there may be recipient fees involved too.
- Advantages of a wire transfer include reliability, security, and the ability to send large amounts.
- The downsides include high fees, processing time, and the lack of anonymity.
How wire transfers work
A wire transfer allows you to electronically send funds through banks, financial institutions, and transfer service agencies. This is how the process happens behind the scenes:
- Someone sends money
- The bank receives the money as an intermediary
- The bank sends it to the recipient
You can send wire transfers to other people/accounts within the same financial institution or to people/accounts from different institutions.
Wire transfers aren't physical exchanges of cash-in-hand – the exchange is handled electronically instead. Most banks and institutions provide wire transfer services via their online banking portal, but a few still require you to visit a branch in person to fill out the order forms, etc.
International wire transfers
Domestic wire transfers are just one type – you can also send international wire transfers. While a domestic transfer involves banks or institutions within Canada, an international wire transfer begins here in Canada but involves sending funds to another country.
While domestic transfers can be processed on the same day, international transfers can take a bit longer. It can take up to 5 business days to complete these international transactions. The fees are higher for sending money internationally too – more on this later.
How to send wire transfers
There are 6 steps involved in sending a wire transfer:
- Gather the information: You'll need the recipient's name, bank account number, and other details.
- Complete the transfer form: This can usually be done online but may sometimes require a visit to a branch location.
- Specify and confirm details: Double-check the amount being sent as well as the recipient's name and banking info.
- Pay fees: The fees will vary depending on the bank you're working with, how much you're sending, and whether it's a domestic or international transfer.
- Notify the recipient: Inform them that you've sent it and remind them to watch for notice of receipt.
- Wait for the notice of completion: Your bank will send a note to confirm the transaction has been completed.
Information needed for wire transfers
As with most financial transactions, you'll need to provide your name, address, and other personal information in order to send a wire transfer. These transfers also require information about the recipient.
Prepare yourself by having this information ready when sending a wire transfer:
- Your name and address
- Your financial institution name and address
- Your account number
- Details of charges (who will be paying the service fee)
- Dollar amount being sent
- Reason for the transfer
- Recipient's name and address
- Recipient's bank account info
- Transit number of recipient's bank or wire service
How to receive wire transfers
Here are the 6 steps involved for wire transfer recipients:
- Provide account info: The sender will need to know your bank's name, your account number, and perhaps a few more details.
- Verify sender's details: Confirm the sender's name, banking info, and the amount being sent.
- Notify your bank: Your bank may have procedures to follow or forms you need to fill out, so informing them of the incoming transfer is important.
- Verify upon receipt: Once your balance reflects that the funds have been deposited, confirm with the sender.
- Check for fees: It's unlikely, but sometimes there are fees that recipients are responsible for, so ensure you're aware of anything owed.
- Use the funds: Once the transfer is complete, the money is yours to use as you wish.
Wire transfer fees
Wire transfer fees can be a bit complicated and can depend on numerous factors, like the recipient country, recipient currency, and whether the sender has a specific premium banking account. There are sometimes fees for receiving wire transfers, but not always – you'll want to check with your banking institution for confirmation of fees.
This table outlines the various fees for sending and receiving domestic wire transfers:
| Bank | Sender fees | Recipient fees |
|---|---|---|
| BMO | 0.2% amount transferred ($15 - $125) + $10 Communication charge | $14 |
| CIBC | * $10,000 or less: $30 * $10,000 - $50,000: $50 * $50,000 or more: $80 | $15 |
| RBC | * $45+ (must contact customer service for more details) | * Less than $50: Free * Over $50: $17 |
| Scotiabank | Fee varies | $15 |
| TD | * $16 to send to other TD accounts * $50 to send to non-TD accounts | $17.50 |
Pros and cons of wire transfers
While wire transfers offer speed and convenience, these benefits are sometimes counteracted by fees and other frustrating details. Here's a look at the pros and cons involved with using wire transfers:
| Pros | Cons |
|---|---|
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Wire transfer alternatives
Technology has given us several alternatives to sending wire transfers, including Interac e-Transfers in Canada and Venmo in the U.S. Some alternatives are faster and than others, security levels differ, and the fees vary and depend on several factors.
Take a look at this list of the most commonly used alternatives to wire transfers for Canadians:
| Alternative | Key details |
|---|---|
| EFT | * Used to transfer funds from one bank account to another one held at a different institution * Only available for domestic transfers |
| Interac e-Transfer | * Immediately transfers funds to the recipient * Doesn't require sharing personal banking info * Only available for domestic transfers |
| Direct deposit | * Most often used for recurring payments like paycheques, government benefits, etc. |
| Postal service (cheques, money orders, etc.) | * Sender can write or request one of several payment methods and put it in the mail themselves * Not always reliable or secure |
| Peer-to-peer lending service (PayPal, Xoom, etc.) | * Doesn't require sharing personal banking info * Senders receive the funds quickly, often immediately * Can send internationally but fees are higher |
| Money transfer services (Wise, Western Union, MoneyGram) | * Requires personal banking info for the sender and recipient * Ideal for international transactions thanks to the speed and security * Fees, exchange rates, and transfer limits apply |
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Wire transfers offer a reliable and efficient way to send and receive funds domestically and internationally. While advances in technology have provided plenty of alternatives, wire transfers are still an important financial tool for Canadians to consider.
Do you use wire transfers? If so, what was the process like?
Feel free to share your experiences with us in the comments section below – we appreciate all reader feedback!
FAQ
What is a wire transfer?
A wire transfer is a secure method of electronically transferring funds between individuals and bank accounts. Its speed and security make it a valuable tool for sending funds within Canada or internationally, although international transfers may incur higher fees.
How long does a wire transfer take?
A wire transfer can take just several hours or as long as several days to complete. Domestic transfers typically transfer within 1 - 2 business days at most, but international wire transfers often take longer as they're more complex.
Can you tell me how to wire transfer money?
There are 6 steps involved in sending a wire transfer, beginning with the sender gathering the required information (recipient's name, banking info, etc.) and finishing with the bank or institution providing a note of transfer confirmation.
Is there a dollar limit on wire transfers?
Yes, there can be limits on the amount of money you can send via a wire transfer. This will depend on the bank or institution you use, the sender and recipient's bank account types, and whether it's an international transfer.
Can I send wire transfers online?
Yes, many Canadian banks make it easy for their clients to send wire transfers online via an online banking portal. Alternatively, you can visit a branch location to make your request for transfer in person.
What happens when a wire transfer is rejected?
In this case, the funds will be returned to the sender's account. A rejection may occur if the sending institution doesn't have the correct or complete information necessary, or if the sender has insufficient funds.
What info is needed to receive a wire transfer?
The information required includes the sender's name, address, and account number and the same details about the recipient. Other required info can include the specific dollar amount being sent and your purpose for sending the wire transfer.
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