When you need to move a large amount of money, a wire transfer (aka: wiring money) can be a safe and smart option.
It allows you to electronically transfer money from one financial institution to another.
But there are some things to keep in mind when utilizing this service. Here are five of them:
5 Things You Should Know About Wiring Money
|1| Know when to use a wire transfer.
Wire transfers are generally used when you need to send a larger amount of money to someone, either internationally or within the United States, or to pay off a loan, says Ashley Schultz, accounting supervisor at Dupaco Community Credit Union’s Pennsylvania branch in Dubuque, Iowa.
If the recipient doesn’t use Dupaco, and you need to send a large amount of money, wiring the funds can be a safer alternative than mailing a check or cashier’s check, Schultz says. That’s because fraudsters can intercept mail and use cashier’s checks to create counterfeit checks.
Wire transfers typically carry a fee, so you’ll want to know in advance how much the service will cost you and the recipient.
|2| Have the recipient’s information ready.
When you wire money, you’ll need to provide the following information to Dupaco:
- Receiving bank name, address, ABA number and any special wiring instructions.
- Beneficiary name, address and account number.
- Dollar amount of wire transfer.
- A physical address for the financial institution, sender and beneficiary for foreign wire transfers.
|3| Be on alert for scams.
Many scams involve wire or money transfers. The Federal Trade Commission cautions:
Government agencies will never ask you to pay by wiring money. Neither will legitimate businesses. If someone insists you pay by wiring money, it’s a scam. Don’t do it. Instead, report it to the Federal Trade Commission at ftc.gov/complaint or 1-877-FTC-HELP.
Here are other red flags to watch for:
- If the recipient insists the wire transfer happens immediately.
- If the recipient refuses to talk to you on the phone, insisting to only communicate via email.
“Know who you’re sending the money to,” Schultz says. “If someone is requesting money on behalf of a family member, reach out to your family member directly. It’s probably a scam.”
|4| Once you send the money, it’s gone.
Once you wire money, you can’t easily get it back, Schultz cautions.
“Be aware of that risk,” she says. “If you send the money to a fraudster, it’s not likely that you’ll get it back.”
|5| It’s not instantaneous.
Oftentimes, people assume that when they wire money, the recipient has access to it immediately. But that’s not the case.
Each financial institution has its own processing times, so the availability of the funds depends on both financial institutions’ schedules, Schultz says. The recipient usually has access to the cash in one to two business days.