What is the difference between a wire transfer and a normal bank transfer?

I looked up the definition for wire transfer and according to Wikipedia's definition, 'Wire transfer or credit transfer is a method of transferring money from one person or institution (entity) to another.'

To my understanding, wire transfer usually charges fees for the use of such service. However, a normal bank transfer can also be used to transfer money from a local bank to another different bank in the same area. So my question is this, does wire transfer essentially mean for international transfer where, obviously, you transfer the funds from your local bank account to a different account at a different geographical location?

I don't suppose wire transfer applies to normal transfers like your local bank account to a different bank account at the same city location. For instance, ANZ bank to Westpac bank. Is the difference geographically?

1 Answer

  • 8 years ago
    Favorite Answer

    What you call a "normal" bank transfer would be an ACH transfer. That system is different from a wire transfer as they use two different systems. Banks usually charge for wire transfers because they require a human at the bank to perform the transaction. Wire transfers are generally credited to the recipient almost immediately - certainly within a day.

    ACH (Automated Clearing House) transfers can be initiated by the customer through electronic systems and do not require a bank employee to be involved. But they can take anywhere from 1-3 days depending on which banks are involved.

    Wire transfers and ACH transfers can be performed between almost any banks in the world (which sometimes requires the involvement of another bank in the middle of the transaction called a correspondent bank). International ACH transfers can't always be done between two banks.

    So if you need the money moved immediately you use a wire transfer. If you can wait a couple days for the money to arrive, you can use ACH.

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