Everything You Need to Know About Wire Transfers

By our guest blogger Mehul.

Wire Transfer is a great tool if you want to send a large amount of money to someone who is located at a different location. It is useful for sending money for university fees, renting a place, or simply sending money back home.

With this article, we will share with you everything that you need to know about wire transfers and also compare it with Forex card.

 

What is wire transfer?

Like reloading a Forex Card, Online Wire Transfer is a quick and safe way of moving money electronically from one place to another between two entities via a bank or a non-bank wire transfer provider such as Western Union Money Transfer, Money Gram, and TransferWise.

 

What are the types of wire transfer?

There are two types of wire transfers – Domestic & International.

In case of a Domestic Wire Transfer, the electronic exchange of money takes place between two different locations within a particular country.

In case of an International Wire Transfer, the electronic exchange of money takes place between two different locations of two different countries.

 

How long does it take for Wire Transfer to complete?

If it is a Domestic Wire Transfer involving banks, then it should not take more than a day for the entire transfer to complete. In fact, in most cases, it takes just a few hours. If it is via a non-bank wire transfer provider, it will only take a few minutes for the transfer to complete

However, if it is an International Bank Wire Transfer, it may take up to two working days at the most or the entire transaction to complete.

 

What is the limit for wire transfer?

As per the Reserve Bank of India (RBI), the maximum amount of money that can be received in India via a non-bank wire transfer is USD 2,500 (around INR 1.6 Lakhs). Having said that, the maximum payout limit in India is INR 50,000. Anything over and above that amount can be cleared only after local cross-checking.

If, however, the money is sent to India via a bank wire transfer, then there is no limit as such.

Likewise, there is no upper limit when send money from India to a foreign destination, provided a genuine reason or purpose is mentioned.

 

How much does the fee cost?

Money sent from India –

Money cannot be sent out of India using a non-bank wire transfer.

In case of banks, various banks charge different amount as fees for wire transfers. That being said, the transfer fees are always less than what the non-banks charge.

Money sent to India –

Money Gram (non-bank wire transfer) charges a flat transfer fee of USD 11 to USD 20, depending on the transfer amount.

Western Union (non-bank wire transfer) charges a flat transfer fee of USD 4.99 to USD 25, depending on the transfer amount.

The upper limit of the transfer amount is, as mentioned above, USD 2,500.

 

How to use wire transfer?

To send money –

  1. In case of Non-Bank Wire Transfer, the following instructions are given to the bank:
  • Name of the person who will get the money
  • How much money would the recipient get
  • The destination of the recipient’s agent
  • Collection of the receipt
  1. In case of a Bank Wire Transfer, the following instructions are given to the bank:
  • Provide your ID card
  • Name of the person who will get the money
  • The recipient’s bank account number
  • How much money would the recipient get
  • Reason or purpose of the transfer
  • SWIFT code

To receive money –

  1. For a bank wire transfer, the recipient’s bank account automatically gets credited.
  2. For a non-bank wire transfer, the recipient needs to undergo the following process:
  • Go to the agent’s office that was provided by the sender as the destination
  • Show the reference number of the transaction
  • Display the identity proof
  • Collect the money and sign the receipt

 

What are Wire Transfer safety tips?

Sending money through wire transfer is extremely safe. In fact, the danger does not even lie in the process. The sole concern is related to whether or not you should be sending money via wire transfer. A number of people have been scammed through this mode of payment.

The best safety tips for making a payment via wire transfer are as follows:

  • Never send money to a stranger – a person or an entity.
  • Never opt for Wire Transfer to make a payment for something that you purchase online from an unreliable brand.
  • Always confirm the identity of the person who asks for money via wire transfer. It could be a stranger pretending to be someone you know.
  • Do not use wire transfer. Instead, opt for a prepaid Forex Card.

 

Wire Transfer V Forex Card

Following is a comparison between Wire Transfer and Forex Card:

  • Carrying out a transaction via wire transfer is quite expensive as a fee is charged from the sender as well as the recipient. But in case of Forex Card, the fee charged is very little. Buy Forex Online, for instance, offer two free ATM transactions.
  • International wire transfer is more time consuming than reloading a Forex Card.
  • Sending money via Wire Transfer is not as safe as reloading a Forex Card.
  • For Wire Transfer, the sender will have to visit the bank or the agent’s office to send money. But a Forex Card can be reloaded from the comfort of your home/office.
  • Although not every university accepts payment made through Forex Cards, you can use your Forex Card to withdraw money and pay your fee to your university in cash. It will still be cheaper than paying the university directly via wire transfer.
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