Wire Transfer Brokers 2020 - Which Brokers Accept Wire Transfer?
A bank wire transfer is an online payment method used for domestic and international money transfers from one bank to another, supported by the likes of Barclays, Bank of America, NatWest, Santander and many more. Before you login and make a transfer, there are several factors you need to consider, including the time it takes to transfer into your trading account, fees you may have to pay and any regulations. We’ll help you determine if trading with wire transfers is a sensible choice for you.
Wire Transfer Brokers
Wire Transfer Overview
Wire transfer services were originally launched in 1872 by Western Union when the existing telegraph network was used to transmit a money transfer message to another telegraph office. In just 5 years, almost $2.5 million was transferred each year.
The modern wire transfer works by sending payment instructions from a sending account to a receiving account through a secure online system, such as SWIFT or Fedwire. Funds are then deposited and normally settled within two business days for international transfers and within a few hours for domestic transfers.
Pros Of Trading With Wire Transfer
Wire transfer services are supported globally and are ideal for traders based anywhere in the world. Wire transfers are also administered by hundreds of reputable banks, including HSBC, Lloyds Bank, Metrobank and Nationwide, as well as newer banks such as Monzo, Revolut and Starling Bank.
Offered By Most Brokers
As wire transfers are so widely used around the world, traders will have no problem finding a broker that offers them as a payment method, including XM, eTrade, eToro, Interactive Brokers, Coinbase and more.
Wire transfers are sent and received in real-time and are usually processed within two business days for international transfers and within a few hours for domestic transfers. Make sure to check with your broker where their receiving bank is located, as this can also affect processing times on their side.
Wire transfers are flexible and can be done using a credit card, over the phone, or in-person at your post office or bank. Note that a wire transfer using a credit card may incur higher fees.
Money Transfer Apps
Money transfer apps have become increasingly popular among traders for their convenience, security, speed and global reach. For example, TransferWise and PayPal can facilitate quick transfers to a wide range of countries, including Canada, Kenya, Egypt, Jamaica and India.
Wire transfers are usually safe, as long as you know and trust the receiver. Legitimate wire services will require both parties to prove their identity, so it’s important for traders to choose trusted and regulated brokers who are both transparent and accountable.
Most financial institutions will have tools that allow senders to apply tracking information onto a transfer. You can contact customer support at your respective remitting bank or money transfer service if you have any questions. This provides an additional layer of security.
Cons Of Trading With Wire Transfer
Broker Processing Times
Domestic payment systems such as Automated Clearing Houses (ACH) can deliver transfers within 24 hours. However, foreign systems must clear the domestic system as well as the foreign equivalent, therefore adding an extra day to the processing time. In addition, brokers will also have their own processing times, sometimes taking up to 7 days for funds to appear in your trading account.
There’s usually a cost to initiate both domestic and international transfers, which can be very high even if you are only sending a small amount. Wire transfers, therefore, tend to be more cost-effective for experienced traders who want to deposit or withdraw large amounts of money. Note that there may also be additional service fees charged by your broker as well as exchange rate fees.
As a wire transfer is processed immediately, it is not possible to reverse a payment or request a chargeback if, for example, the sender has provided the wrong recipient address. This is particularly attractive for scammers who can claim the funds and disappear before the sender even realises the transfer has gone missing.
Whilst you are free to use wire transfer at the weekend, there is no guarantee that your broker will also receive the funds at the weekend. This usually means that money wired on a Friday or Saturday is not received until the start of the following week.
It only takes a few minutes to set up and initiate a wire transfer, but bear in mind that international transfers may take a few days to be received by your broker and then released to your trading account.
It may also take several hours for domestic transfers to show in your broker’s account, plus any additional processing times on your broker’s side. For example, it may take up to 3 days in total for funds to be processed and released by eTrade, whereas FXTM can take up to 5 days.
Note that banks may also have transfer cut-off times for sending transfers on the same business day. For example, same-day transfers are not possible after 5 pm ET at Bank of America and online at Wells Fargo.
Wire Transfer Security
Wire transfers are generally very safe, as long as the receiving party is a trusted individual or entity. Information is transmitted through encrypted connections, which may differ depending on your banking or money transfer service.
In terms of regulations, some nations do have stringent policies in place that provide protection against money laundering activities and terrorist funding, including the Office of Foreign Assets Control in the USA and the Wire Transfer Regulation (WTR) in the UK and EU. Organisations like this collect information on transfers over $3,000.
In cases where there is suspicious activity, the sending bank has the authority to freeze funds and stop the transfer. Whilst this does provide a good level of safety, traders should also ensure that their brokers have measures in place to protect clients.
Traders should also be aware of broker scams where they request a hefty minimum deposit via bank wire in order to open an account. This is often alongside other red flags such as a poorly written website, no transparency around company information and unrealistic trading conditions.
Deposits & Withdrawals
The wire transfer process is fairly simple. Look out for the logo at your broker and make sure to check any minimum or maximum limits, both with your bank and your broker. Usually, bank and payment service transfer limits are generous (i.e. up to 1 million dollars at TransferWise).
Once your broker has provided you with the payment details and a wire transfer receipt, enter the information into your bank’s transfer form, along with the amount, beneficiary address and zip code, as well as the purpose of payment. Depending on where you reside or where you’re transferring to, you may need to provide a routing number or SWIFT code. Once the transfer is complete on your side, you will both receive a confirmation.
The withdrawal process can vary depending on the broker, but traders usually need to fill out a withdrawal form to request a bank wire transfer.
Wire Transfer Fees
Domestic and international wire transfers can be costly. For example, in the US, the online domestic transfer fee at Bank of America and Discover Bank is $30. In the UK, the transfer fee with HSBC is £17 for postal transfers. In Australia, domestic transfers are generally free but international transfers can cost up to $20, plus the foreign exchange margin.
Is Wire Transfer A Good Choice For Traders?
Despite growing competition with e-wallets, bank wire transfers are still the preferred option particularly among professional traders who transfer larger sums using a credit card, bank account or money transfer app. International and domestic transfers are also safe, especially to and from jurisdictions that are backed by robust regulations.
The main downsides are the fees involved with a wire transfer, as well as the time it takes for funds to clear in your trading account.
What is a wire transfer and how does it work?
A wire transfer is a popular electronic payment method that involves sending a transmission from one bank to another. Wire transfers can be carried out domestically or internationally.
Is wire transfer safe?
Wire transfers are usually very safe, as long as the sender trusts the recipient. Traders should ensure that they are trading with a reputable and secure broker.
Is wire transfer free?
A wire transfer can cost money in most cases, whether it is domestic or international and regardless of how much money you are sending. The reason wire transfers are so expensive is largely due to handling charges (shipping fees) between banks.
Does wire transfer work on weekends?
Generally, a wire transfer will go through on a Saturday from the sender’s side, but clearing times on the recipient’s side tends to slow down at the weekend. Time frames also vary depending on the receiving bank.
Does wire transfer take long?
International wire transfers can take up to two days to be processed, whilst domestic transfers are usually received within a few hours. Note that brokers will have their own processing time frames, often up to 7 days.
How do I wire transfer online?
You can wire transfer to your broker by signing into your online banking and initiating a payment using a transfer form. You will need the beneficiary address details, transfer amount and reference, as well as a SWIFT or routing number if applicable.
Can a wire transfer be cancelled?
A wire transfer can not be recalled once it has been initiated at your bank. Make sure you are sending to a trusted recipient and that you have entered the transfer details correctly.