wire transfer

Banking Terms -> wire transfer

• Wire transfer, also known as credit transfer, refers to a method of transferring funds electronically from one institution or person to another. Wire transfers are made in two different ways. Cash can be transferred at a cash office or from one bank account to another. Compared to bulk payments, wire transfer systems are intended to offer individualized transactions. Examples of such systems are Check21 and ACH. ACH stands for Automated Clearing House, which functions as an electronic network for making transactions in the US. This system processes debit and credit transactions in batches and in large volumes. Credit transfers encompass vendor payments and direct deposits. Direct debit transfers include, on the other hand, mortgage loans, insurance premiums’ consumer payments, and other types of bills. Check21 is another name for Check Clearing for the 21st Century Act, which was enacted in 2004. Under this law, recipients are allowed to create digital versions of paper checks, which are known as substitute checks. In this way, further processing of the physical document is not necessary. The effects of this become visible to consumers when some checks no longer come with their monthly statements. At the same time, others are returned. In addition, under this law, mobile phones and computer scanners cannot be used to capture checks’ images with the purpose of depositing them electronically. This is called remote deposit.
  
  Basically, wire transfers are transfers of money done by a bank, and both recipients and senders do not touch the funds. It is not difficult to make a wire transfer, and the first step is to contact your financial institution online or by phone and provide the required information. This includes the name of the company or person to have the money wired to, the routing number of the bank, together with the phone number and address of the latter, the account number of the recipient, and the contact details of a person to whom questions can be presented, if needs be. The next step is to determine the sum of money to be wired and when the recipient needs to have it sent. The transaction is to be completed through your banking institution. Some banks allow clients to make transactions over the Internet, but other entities require that clients contact them by fax or phone. Finally, you have to confirm that the wire transfer took place. Request a transfer confirmation to be emailed or faxed or call the receiving bank and ask for confirmation.
  
  Wire transfers are a popular payment method, along with personal account management, balance transfers, and credit cards. With account management, clients can transfer money between savings and checking accounts. In fact, by swiping an ATM card, bank clients authorize a wire transfer from their bank accounts. At point of sale, transfers are free-of-charge for customers, but a fee may be charged for other types of transfer. For example, it will be based on percentage of the amount to be transferred, or it can be a flat amount. This is oftentimes the case with credit card balance transfers.
  
  Western Union and some other companies feature an anonymous type of wire transfer. Customers can go to Western Union, for example, and send certain amount of money to a branch of Western Union in Jamaica. Even if the office they visit is in Chicago, they will send cash and pay all applicable fees. The wire transfer will be made electronically.
  
  Wire transfers have advantages and disadvantages. They are handy in case you do not have a bank account. However, if you make a wire transfer to buy something from a private seller, they may provide wrong or false information.

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