View Full Version : What is the point of wire transfers?

03-30-2004, 09:18 AM
I signed up for a mutual fund account the other day, and I could fund it through wire transfer or by ACH (like direct deposit). I chose ACH, because it's simpler (since I don't have to deal with my bank) and no extra fees apply. Why would someone use a wire transfer?

03-30-2004, 09:41 AM
I believe wire transfers post significantly quicker (at least that's been my experience), and some institutions place limits on the sice of ACH transfers (for example, Vanguard caps them at $100k).

03-30-2004, 09:47 AM
Ok, so what I was going to say before the Hamsters ate my post was...
In the UK we have BACS ( Bankers' Automated Clearing Service) and CHAPS (Clearing House Automated Payments System).
BACS can only be used up to a limited amount and takes a few days if transferring between accounts at different banks (although between two accounts at the same bank it is pretty quick).
From Metacom 's post it sounds like BACS is the equivalent of ACH while CHAPS is your wire transfer.

03-30-2004, 10:08 AM
Are you asking only in terms of this account or about wire transfers in general? In general, wire transfers are more easily accessible to the recipient.

03-30-2004, 12:40 PM
Bank wires have been around pretty much since the day the telegraph was invented. Maybe not exactly so, but they've been around a long, long time, and odds are excellent that if a bank has US currency in its vault, it's in the FEDWIRE system.

ACH (Automated Clearing House) is a relative newcomer. Not every bank and every brokerage is a participant in the ACH network. Like everything else in banking, this costs money - the ones that aren't in the ACH system have to go through intermediary banks. Just as you have to pay a buck-fifty to use another bank's ATM, non-ACH banks have to pay the intermediary, so they don't like to do it if they don't have to.