The Difference between ACH and Wire Transfers Explained Properly

Money transfers have become part of our daily life. While in the past, you had to visit the bank, today you can download an app, and voilà, in one minute, the transfer is complete! The most common types of transfers are Ach transfers and wire transfers. But what exactly is the difference between ach vs wire transfer? Read on as Family Money explains.

Ach vs Wire transfer

What is an Ach Transfer?

An Ach transfer is a form of money transfer. The funds are transferred electronically between banks and processed by the Automated Clearing House Network. Ach transfers can be divided into two main categories:

  1. Ach direct deposits: All transfers from government agencies or businesses to consumers are referred to as Ach direct deposits. This includes:
    • Interest payments
    • Annuity payments
    • Paychecks
    • Government benefits
    • Reimbursed expenses
    • Tax refunds
  2. Ach direct payments: Anybody can make direct payments. This includes the following:
  3. Ach transfers are either free of charge or very inexpensive. They are also very secure. Another advantage is that they can be used both to send and receive money.

How Does an Ach Transfer Work?

When you make an Ach transfer, you do it through a particular financial institution. The funds are then sent to the Automated Clearing House Network. The latter verifies the transaction and ensures that the funds do not go to terrorist organizations or the like. Then, the funds are cleared and sent to the receiving bank or transfer agency.

How Long Does an Ach Transfer Take?

Due to the transfer process, Ach transfers take around two or three business days. When you have submitted your transfer request, the bank will send it to the Automated Clearing House Network. However, they are not sent immediately. Instead, the requests are sent in batches three times per day. Once the request reaches the Network, it will be verified and sent to the receiving entity, such as a business that is getting business funding from a lender. Since the transfer involves several parties, it will take longer than a wire transfer.

What is a Wire Transfer?

Wire transfers are another form of electronic money transfer. They can take place through banks or financial institutions. Wire transfers include transactions such as:

  • Bank wire transfers
  • Western Union
  • MoneyGram

Wire transfers can only be payments. If you want to request payment, you will have to use another form of money transfer. While Ach transfers do not involve any human intervention, wire transfers are handled by employees at the bank. Wire transfers also involve higher costs. The prices usually range between $10 and $30.

In 1872, Western Union launched Wire Transfer on its telegraph network - Family Money

In 1872, Western Union launched Wire Transfer on its telegraph network - Family Money

How Does a Wire Transfer Work?

A wire transfer is, in some ways, a smoother process than an Ach transfer. It only involves two parties as opposed to three. When you visit, for instance, a Western Union office or bank and fill in your transfer request, the employee will send it immediately. Therefore, the transfer is much quicker. On the downside, it is only possible to send money. The transfers are also somewhat less secure then Ach transfers. The transfer itself is secure; however, there is no check for potential fraud.

How Long Does a Wire Transfer Take?

Many times, a wire transfer is instant. Therefore, it is the best option if you are looking to send money in the shortest time possible. However, in some cases, it may take longer. It depends on how your bank works, but also on where you want to send money.

For instance, if you want to make a transfer to another account in the same bank, the transfer should be immediate. The same is valid if you send money through a transfer service such as Western Union. However, if the funds are to reach a bank account in a developing country, it can take longer. This is because the financial infrastructure of the country may not be as developed as in the United States.

Ach vs Wire Transfer – The differences summarised

The differences between Ach transfers and Wire transfers:

Ach Transfers
Wire Transfers
Transfer Speed Ach transfers generally take between 2 and 3 business days. Wire transfers can be instantaneous. At most, they take up to 1 business day.
Cost Ach transfers are often free of charge. Some banks charge around
$3 per transaction.
For transfers within the United States, the cost ranges between $10 and $35. For international transfers, the price is $35- $60.
Safety Ach transfers are a very secure form of money transfer. Wire transfers are a safe way of sending money.

Ach Transfers vs Wire Transfers: How much do banks charge?

Ach Transfers (domestic)
Wire Transfers (domestic)
Bank of America Incoming: Free Incoming: $15
Outgoing: $30
CapitalOne Incoming: Free Incoming: $15
Outgoing: $25-$40
Chase Incoming: Free Incoming: $15
Outgoing: $25-$35
Citibank Incoming: Free Incoming: $15
Outgoing: $17.50-$35
TD Bank Incoming: Free
Outgoing: $3
Incoming: $15
Outgoing: $25

Bottom Line
There are several obvious similarities between Ach transfers and wire transfers. Both are smooth, secure options that can help you with day-to-day transactions. Nonetheless, there are also differences between the two, and in some situations, one may be better suited than the other. However, it is difficult to determine which service is best. Why not try out both and decide for yourself?


When is an Ach Transfer the Best Option?
Ach transfers allow for more types of transfers than wire transfers. If you want to request money, an Ach transfer is the only option. Similarly, Ach transfers are recommended if you want the safest possible transfer.

When is a Wire Transfer a Better Option?
Wire transfers are quicker than Ach transfers. Therefore, they are best suited when you want the funds to reach the receiver as soon as possible. In the case of emergency, wire transfers are the best choice.

What Information is Needed for a Wire Transfer?
If you want to make a wire transfer, you have to provide basic information about yourself and the receiver. Full names, contact details, and, in some cases, the recipient’s bank details are required.

Jump To A Category

Quick Read: Money Magazine