How To Send A Wire Transfer

In order to get my down payment and closing costs to escrow to complete the purchase of my home, I had to do a wire transfer for the first time in my life. It's very common to have to wire funds for closing, though sometimes you can use a cashier's check. In my case, that wouldn't have been a very good option, because the escrow company is 75 miles away (needless to say, I didn't choose the escrow company).

I was under the mistaken impression that wire transfers were fast: you call the bank, give them the wiring instructions (i.e., the name, routing number, and account number of the recipient along with the amount you want to send), they do it, and the money is transferred instantly. Right?

Well, that's not the case at all. In case you ever need to send a wire transfer, I recommend taking the time to learn about it now. Here's what I learned during my investigation.

WaMu (now JP Morgan Chase): Takes 2 days to do a domestic wire transfer, 3 days to do a foreign wire transfer, and you must visit a branch in person.

Fidelity - Different types of accounts have different wire transfer times. For my joint account, which is a money market account and one of my secondary accounts, I can do a same-day wire transfer. For my core individual account, which is also a money market account, it takes a day. You have to talk to their special wire transfer department and get an approval number, then fill out some paperwork and fax it over. Fortunately, that process is pretty painless, as I've found things with Fidelity generally are. The fee to send one is a reasonable $15.

Western Union - You can send money in minutes, but you have to charge it to your credit card. I assume that my credit card would count this as a cash advance. Cash advances commonly cost about 3% and start accruing interest immediately. So this would be a very expensive option given the large amount of money I needed to wire, plus I don't have any credit cards with high balance limits. Also, Western Union has its own fees: to send just $1,000 with their Money in Minutes feature would cost me $79. To wire money directly to a bank with a three day waiting period would cost $49. But wait! There are also limits on how much money you can send per 30 days, which may make the service useless for large transactions.

Not only was this learning experience disconcerting because it is going to cause my loan to close yet another day late, but because I always thought that in an emergency, I could quickly access or send funds with a wire transfer. But now I know that isn't true, which I guess makes credit cards the best option (albeit not a good one).

I really wish that someone involved in my real estate transaction had told me that there is a time delay with wire transfers long before it was time for me to do one. I'm kind of shocked that no one said anything about it! Of course, it is also my fault for not researching the issue sooner and assuming I understood it when I had never done it before. But if you're reading this, at least you can learn from my mistakes and avoid having problems with wire transfers yourself.

Photo by yonghokim