How long do wire transfers take?

Answer 1

How long a wire transfer takes depends on the two banks between which the wire transfer is being initiated.

Wire Transfers between two banks is essentially not too complex. To understand the whole concept of wire transfer, you need to understand the differenttypes of Wire Transfers:

• Domestic Inter-bank Transfers (within the country transfer from one bank to another)
• Domestic Intra-bank Transfers (within the country and transferring from one bank branch to another)
• International Inter-bank Transfers (probably the most common/famous bank transfer, whereby funds are transferred from one bank in one country to another bank in another country)
• International Intra-bank Transfers (transferring of money within the same bank, but in a different country)

Domestic Inter-Bank Funds Transfer

This depends on how the setup is in each country. It can be done via RTGS (See Wiki on RTGS: http://en.wikipedia.org/wiki/Rea...) or via a local Automated Clearing House or even a localized Financial Network or Switch. Essentially, banks are members of a network (secure, closed network) that essentially allows banks to net off or send payments to each other and exchange beneficiary details. Some old-school (read: not technologically advance countries) still do this manually by exchanging physical cheques and then settling them. Whilst, most of the modern and even developing economies have some form of an exchange / network to connect to and settle. The United States, for example uses ACH for this purpose.

Typically, such wires are instantly settled.

Intra-Bank Funds Transfers (Domestic)

For Intra-Bank Transfers the procedure is very simple. Most banks will simply instruct their core banking software to do an FT (Funds Transfer), which essentially means debit one account holder and credit the other account holder.

Typical settlement time, 5 minutes to a couple of hours. Again, it depending which country we are referring to. For slower systems, it would be processed at the end of the day (batch processing) and be settled later that night, with funds available the next day.

Intra-Bank Funds Transfers (International)

When the same Intra-Bank transfer is done internationally, banks in both the remitting country and the beneficiary country have to follow laws in their respective countries for reporting the same to the financial services authority / central banks on the money in-flow/out-flow (see more below on the different types of reporting).

If on the same banking network, the settlement is in a couple of hours or less. If utilising SWIFT, the settlement time can be 1-2 days.

Inter-Bank Funds Transfer (International)

On the International transfers, for Inter-bank transfers, banks usually use the Society for Worldwide Interbank Financial Telecommunication network. Think of SWIFT as the common denominator (or network) to connect any two banks. Sometimes two banks may have a direct arrangement (for example, a transfer from Citibank NYC (US) to Deutsche Bank Karachi (PK) have a direct arrangement, and hence the transfer will be done via the SWIFT network, withoutthe interaction or involvement of an intermediary bank, commonly referred to as a correspondent bank.

In the event a direct relationship is not available, banks have arrangements with each other (via Nostro Accounts).

Typical settlement times: 1-2 days. However, if a correspondent bank is used, this time frame can extend onward, up to 5 days.