What Is The Difference Between Ach & Wire Transfer?


If you ever need to send money, utilizing electronic transfer is one of the best ways to accomplish this task. While there are many different options you can take, a wire transfer or ACH transfer are two of the most popular methods. These two options accomplish the same task. However, there are subtle differences that you should understand so that you can use the correct option when you need to transfer money.

Transfer Speed

If your transaction requires speed, a wire transfer may be your best option. When you send money with a wire transfer, it’s usually completed within one business day. In fact, you may be able to have funds wired and have them available on the same day that they are sent. However, this is not a process that is completely automated. There is an element of human interaction that can slow down the transfer. Typically, an employee from your bank will need to review the transfer before it is sent to a recipient’s account. If the bank employee who handles wire transfers is out to lunch or busy with customers, that will slow down the process. It’s often best to make wire transfers early in the morning to avoid interruptions that can sometimes occur later in the day when your bank is in full operation.

The ACH transfer of funds is slower than using a wire transfer. If you use the ACH transfer method, it may take two or three business days for your funds to reach the account of your recipient. Unlike wire transfers that are approved by a single person and sent out at their discretion, ACH transfers are processed in batches by banks and clearinghouses. If your bank does not complete this type of transfer on a daily basis, your funds will go through a waiting period before they are transferred. However, the system is changing. Technology is speeding up the way that ACH payments are completed. Some banks currently have the ability to complete these transactions daily.

Transfer Costs

If you decide to use a wire transfer, it will probably cost you between $10-$35 when transferring funds within the US. If you need to send your funds to an international destination, the cost may be higher. If you are the recipient of a wire transfer, it’s usually free of any fees. However, some credit unions and banks will charge a small service fee.

Typically, ACH transfers are free when you send or receive money.

Provides Safety and Certainly

Since a wire transfer is reviewed by a bank employee before being sent, it is one of the most secure ways to send and receive money. If you are the recipient of a wire transfer, you have the ability to immediately spend the money that’s sent to you. In contrast, before you can send a wire transfer to a recipient, your bank will require you to have the appropriate funds in your account. Your funds are verified as being sent when you choose to use a wire transfer. This differs from sending or receiving a cashiers check as it could be faked.

If you choose to use an ACH transfer, it is also safe. However, these type of transfers can be reversed back to your account. This might occur if you are overpaid by an employer or they made some other type of mistake. A wire transfer can never be reversed.

As you can see, if you really need to send funds fast, a wire transfer will be your best option. However, it does come with a price tag that’s higher than sending funds via an ACH transfer.