Wire Transfers vs. ACH Transfers: What’s the Difference?

When sending money electronically, you may need to choose between a wire transfer and an ACH transfer. While both are secure methods of getting money from one place to another, each has unique benefits.

How can you know which one is best for you? Learn the key differences so you can save time and money with your next money transfer.

What Is a Wire Transfer?

A wire transfer is an electronic transaction that moves money directly from one financial institution to another. It can happen between two institutions in the same country (domestic transfer) or between banks in two different countries (international transfer). In both cases, the banks or institutions handle the transfer and don’t rely on a third-party company or network. (However, international transfers may need intermediary institutions to help complete the transfer.)

How Do Wire Transfers Work?

The wire transfer earned its name back when telegraph wires were used to send messages quickly from person to person. Today, banks similarly share a message about the money being transferred, although it’s done electronically.  

Another name for these transfers is “remittance transfers.” They are a popular way to securely pay for large, non-refundable purchases, such as the down payment on a home.

Wire transfer funds typically arrive on the same day they are sent, but this may come at a higher cost. The fees for wire transfers vary by institution.

What Is an ACH Transfer?

ACH transfers are money transfers that happen between two financial institutions in the Automated Clearing House (ACH) network using the services of a third party. These transfers have replaced paper checks in some transactions, such as payments from an employer or to a utility company.

The network is made up of around 10,000 mostly U.S. banks and other institutions. While you can sometimes use ACH for international payments, it’s not as widely available in other countries.

How Does an ACH Transfer Work?

ACH is also the technology used for some of the more popular online and app-based payment services, such as those that enable peer-to-peer transfers.

ACH payments don’t happen in real time. When banks request to pull from or push to another bank, the information will show up in the next available batch of transactions. Banks get this batch information up to six times per day, so same-day transfers will occur in one of those batches. However, some transactions may be scheduled for a day or two later and thus won’t be processed until that time.

It may be free to conduct an ACH transfer, but it depends on the bank and whether it’s a “rush” or expedited transfer.

Comparing ACH vs. Wire Transfers 

ACH and wire transfers both happen electronically and can be processed quickly. They are also secure ways to send and receive money both domestically and abroad. The payment limits for both vary and depend on the bank or service that’s handling the money.

However, this is where their similarities end. Wire transfers and ACH transfers actually have many more differences you should consider before choosing the best option.

Cost and Fees

ACH transfers are generally cheaper, with perhaps no fees at all for incoming ACH payments such as deposits from an employer. Businesses may pay small fees for outgoing ACH payments, especially if they send large numbers of payments at a time.

However, wire transfer fees can be very high — ranging from $25 to $75 or more for just one transfer. This varies by the wire transfer company and location, as some states regulate wire transfer fees.

Speed

ACH transfers can happen on the same day between banks in the same country, but they are not instantaneous. They may take several days when sending money to an international bank.

Wire transfers happen much faster, in most cases, occurring in as little as 15 minutes. Some international wires can take a day or more.

Reversibility

Both ACH and wire transfers are secure, reliable ways to transmit money. However, ACH payments are more easily stopped — you can halt them on the same day in most cases.

Wire transfers are considered final once the payment reaches the receiving bank, which can happen within minutes. Because wire transfers happen so quickly, they are often considered irreversible once initiated.

Direction

ACH transfers are made to either “pull” money from a bank or “push” it. What’s the difference?

Say you want to set up an automatic bill payment with your auto lender. By providing your bank account info and authorizing the lender to take money out of your account, you are authorizing them to pull an ACH payment.

Having your paycheck deposited automatically into your bank each month is an example of a push transaction. Your employer’s bank will push the payment to you every time you get paid instead of cutting you a check.

Wire transfers, on the other hand, can only push money. Senders determine how much and where the money goes, along with when.

Frequency

ACH transfers can be set up to happen regularly, such as an automated payment for your water bill. Payments can also exist as part of a series that continues until stopped.

Wire transfers usually happen one time. When you want to send money again, you set up another wire transfer (and pay another fee).

When to Choose an ACH Transfer

ACH transfers work best in some situations, including those where you’ll make payments again and again to the same person or business. Examples include:

• Paychecks from an employer to an employee
• Bills paid from a customer to a company or lender
• Sending money to a friend or family member when you both have bank accounts
• Transferring money between two bank accounts you own at different institutions

Banks with bill-pay services also rely on ACH networks to make payments from your account directly to a business or vendor.

If you don’t need the money to arrive the same day or right away, these are all good situations for ACH transfers.

When to Choose a Wire Transfer

Wire transfers are fast — often very fast. If time is of the essence, and you need cash to get to someone right away, a wire transfer may be a better option. Wiring is also necessary for sending money to a loved one in another country if one or both of you don’t have a bank account.

Transfer Money More Easily With Ria

There may come a time when you need to send money to a friend or family member and don’t want to worry about how it gets done. That’s the freedom Ria Money Transfer offers people all over the world.

Ria offers both international wire transfers and ACH payments and will initiate the right transfer type based on your situation and the situation of the person receiving the money.

It works for those sending money domestically or abroad and who:

• Have a bank account
• Don’t have a bank account
• Want to fund the transfer with cash in person
• Want to fund the transfer with a credit or debit card
• Prefer a great exchange rate
• Don’t want to pay expensive wire transfer fees

Ria is also ideal for those receiving the money. If they have a bank account with IBAN and SWIFT numbers, they can ask for the money to be deposited there directly. They can also choose to have the money sent to a convenient local location and pick it up in person.

With a flexible menu of options, Ria offers a convenient way to send money online. Money can arrive at the destination in as little as 15 minutes, too. Use the desktop website or the mobile app to see what money transfer options are available where you live. You’ll also see the low fees and currency exchange rate before you send.

What’s the Best Money Transfer Service for You?

Whether you use a wire transfer or ACH may not be the most important question. Rather, you need a safe and convenient way to send money that works in more situations. With Ria, you don’t have to choose, and you can send money to 190 countries at any time of day or night.