wire transfer
An electronic transfer of funds between bank accounts, domestically or internationally, typically settling same-day or within a few business days.
Example
“The real estate closing required a $80,000 wire transfer to be received by the title company by noon.”
Memory Tip
WIRE transfer = sending money electronically at the speed of a wire. Fast, irreversible.
Why It Matters
Wire transfers are crucial for moving money quickly and securely between accounts, making them essential for major purchases, bill payments, and international transactions. Understanding wire transfers helps you choose the right payment method based on speed, cost, and security needs.
Common Misconception
Many people believe wire transfers can be easily reversed or canceled after sending, but once the funds leave your account and are received, the transfer is typically permanent and cannot be undone without the recipient's cooperation. This makes it vital to verify all recipient details before initiating a wire transfer.
In Practice
If you are purchasing a house and need to send a down payment of 50,000 dollars to an escrow account by Friday, you could initiate a domestic wire transfer on Wednesday morning and the funds would arrive within one business day. For an international wire transfer sending 10,000 dollars to a supplier in Germany, the same transaction might take 2-5 business days and could incur fees of 15-50 dollars depending on your bank.
Etymology
Originally sent over telegraph WIRES — an electronic funds TRANSFER over communication lines.
Common Misspellings
Learn personal finance fundamentals free
Related Terms
More in fundamentals
Other fundamentals terms you should know
See Also
Need financial definitions?
Clear definitions for 2,500+ finance, insurance, and investing terms.