Wire Transfers vs. ACH for Transferring Money

Wire Transfers vs. ACH for Transferring Money

With the rise of technology, money is exchanged wirelessly as often than physically nowadays. Wire transfers and ACH (Automated Clearing House) transfers are the most common methods for electronically sending funds from one financial institution to another, but both have different pros and cons to consider. Let’s start by defining what each transfer entails and which one is the best way to send money from Canada to the USA.

Wire Transfers (ABA)

A Wire transfer occurs when currency is electronically sent directly from one bank to another. It doesn’t have to go through a clearinghouse or any other institution in between, which allows it to be completed within 1 day and also allows money to be transferred internationally. These transfers are often required for larger purchases, like a down payment on a house, since the seller wants the funds to clear and be received before moving forward with the transaction.

These money transfers typically cost a fee on both sides, and the sender pays a little bit more than the recipient. The sender usually has to pay a fee between $20 and $35, while the recipient pays between $10 and $20 to receive the funds. One thing you should note is that wire transfers are difficult to reverse. Since the funds are instantly sent from one bank to another, it is almost impossible to cancel or reverse the transaction once it is completed.

ACH Money Transfer

An ACH transfer is similar to a wire transfer, but the funds go through a national network and are processed by a clearinghouse.

With these transfers, payments are grouped together and processed later in the day, and banks receive these payments in batches rather than individually. The bank then allocates the funds to the appropriate accounts once they are received in full. This whole batching and distributing process is automated and automatic and doesn’t require any manual labour to be completed. They are faster than paper checks and funds tend to be safer and cost less to transfer.

Unlike wire transfers, these money transfers take between 1 and 3 days to complete and tend to be free or cost significantly less. ACH transfers tend to be favoured for recurring monthly payments like bills.

What are the key differences to remember?

ACH payments are slightly more secure since they go through a clearinghouse instead of being sent instantly from bank to bank. ACH payments have lower fees, or no fees associated with them, while wire transfers tend to cost up to $30 for the sender and receiver.

ACH transactions are better for reoccurring bills or business transactions.

Why is ACH more Secure?

It’s important to clarify that both are considered to be very secure. ACH payments are slightly more secure because they pass through an independent clearinghouse that has stricter rules and regulations to follow. Also, since wire transfers cannot be reversed, this makes them slightly less secure. If you or your bank makes an error, your funds will be more difficult to retrieve.

ACH Wire Routing Number VS Wire Transfer Number? What’s better for remittance?

At Remitbee, we choose the most secure option for our customers and we keep costs low by using ACH technology to facilitate all money transfers. Any payments that customers send are cleared locally, this keeps transfers easily trackable and affordable for all Remitbee users. When transferring money to the United States from Canada with Remitbee, always use your ACH Wire Routing Number.

How do I find my ACH Wire Routing Number?

Each bank has its own unique ACH Wire Routing number. Finding out your bank’s ACH number is easy. Oftentimes, your bank’s ACH is the same as the routing number as the ABA (Wire) routing number on your cheques but to be extra careful you may want to check your bank's website or google ‘Bank of America ACH Routing Number’. In the USA your routing number is 9 digits. Here are a few links to some popular banks’ ACH numbers.

  • Bank of America ACH routing number
  • Capital One ACH routing number
  • Chase ACH routing number
  • SunTrust ACH routing number
  • US Bank ACH routing number
  • Citibank ACH routing number
  • PNC ACH routing number
  • Wells Fargo ACH routing number

Final Considerations

The first and most important consideration is how quickly your funds need to arrive at their destination. If they need to arrive quickly, wire transfer is the obvious way to go, but if you’re able to plan ahead it is worth the added security and cheaper fees to go with ACH. Whatever your money transfer needs are, Remitbee is here to support you. We offer a number of different money transfer methods for you to send funds to dozens of countries around the globe.

Whether you are sending money to your roommate across the hall to cover rent or you want to send funds home to your parents in Indonesia, Remitbee has you covered.

Start by visiting our website or downloading our app and creating a free account today.

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