Sending money from one person to another requires bank accounts if you’re not directly using cash in a transaction. Through electronic innovations, banking patrons can now bypass visits to the bank when sending money. The options they have are both electronic, but one is strictly via the web while the other is directly from your bank. The key differences between wire and online transfers may be important enough to save you money and even send it the correct way.
What Is a Wire Transfer?
A wire is a money transfer that goes from one bank account to another. You can wire money to your own bank accounts or to those whose routing number and name you know.
With both a transfer routing number and an account number, your wire transfer gives a bank all of the data it needs to verify and then complete a transfer.
Whether you visit your bank to initiate a wire, call them or commence online, the results are all the same and the data requirements are too.
How Do Online Transfers Work?
Online transfers are more often initiated via an online payment platform. PayPal is among the most popular payment hubs where money can be transferred and spent online.
Though these accounts can access a bank account when you’re spending, they do not receive money directly from other bank accounts.
To receive money from a bank to PayPal, you need to sell something. Online transfers work best when simply sending money from one online account to another.
The Key Differences
If you approach wire and online transfers equally, you’ll encounter unique problems, being unable to send or access money. Your reasons for sending money and the level of security you need are additional factors to consider. You can ultimately own accounts for both wire and online transfers respectively. Using one over the other is purely based on your time, cost and location.
Deposit Fees – The fees associated with wire transfers, though high in some fixed ranges, are set based on the amount you send. Using an online transfer is, however, done through a percentage fee no matter what the total being sent is. Both options, being specialized services, have a fee associated with them.
Deposit Timing and Expirations – Deposits to a bank account made from another bank account happen fast. Expect slower clearance times when using an online payment tool. Regardless of the method, five business days tends to be the maximum waiting time.
Deposit Locations – International transfers cost a bit more than local transfers do, but the expected fees are still set at specific ranges. When you send money online, it doesn’t matter where you are; you pay no fees for your location.
Making financial technology work for you isn’t difficult if you take time to learn about its tools. You can use this guide again when you need to refresh on your options and their benefits.
