ACH vs Wire Transfer

United States By Christy Lowry June 10, 2024

Automated Clearing House (ACH) transactions and wire transfers can do the trick when you need to send money electronically.

But one will likely be better than the other for your situation. While the two share similarities, they differ in cost, speed, funding options, international access, and more.

For example, ACH transactions are phenomenal for everyday payments or sending money to family and friends in the US. In fact, money transfers you initiate through Western Union in the US leverage the ACH. On the flip side, conventional bank wire transfers are often best for larger transactions like a down payment on your house or car.

Read on to learn the ins and outs of ACH vs. wire transfers and why you may want to use one over the other.

Is an ACH transfer a wire transfer?

An ACH transfer is not a wire transfer. Both enable you to send money electronically but offer different use cases.

ACH transfer: An electronic payment sent from one US bank account to another through the Automated Clearing House. Think of the ACH as a superhighway for electronic funds transfers in the US. It connects all the banks and credit unions, enabling you to transfer money between bank accounts cheaply—even in separate places.
Wire transfer: An expedited electronic funds transfer sent from one bank account to another, often internationally. Wire transfers happen individually and in real-time through secure networks like the Fedwire Funds Service or Clearing House Interbank Payments System (CHIPS) in the US and the Society for Worldwide Interbank Financial Telecommunications (SWIFT) Think of it as the express lane for electronic payments, prioritizing speed over cost-effectiveness for urgent transactions or large sums of money.

ACH transfers explained

People use ACH transfers in the US for everything from utility bill payments to

The National Automated Clearing House Association (Nacha) is a nonprofit organization that governs the ACH, while Federal Reserve Banks and the Electronic Payments Network (EPN) operate it.

Here’s a breakdown of how ACH transfers work:

You initiate an ACH transfer

Wire transfers explained

People often use wire transfers to make large, time-sensitive payments such as legal fees, real estate closing costs, or emergency loans.

Fedwire is the payment settlement system provided by the Federal Reserve that processes domestic Many banks use Fedwire to process domestic wire transfers for customers. Domestic transfers can settle within minutes but typically take one to three days to complete.

As for international wire transfers (also known as remittance transfers), SWIFT is often the go-to. SWIFT is a Belgium-based, shareholder-owned organization that serves more than 200 countries. Unlike domestic wire transfers, wiring money internationally typically takes one to five business days.

Here’s a general overview of how a wire transfer works:

Register and provide proof of your identity.
Enter the destination country, transfer amount, funding method, receiving method, and recipient’s details.
Pay for the transfer.
The bank sends the payment to the intermediary, which sends it to the recipient.
The recipient receives the payment, and you get confirmation.

How are ACH bank transfers vs. wire transfers different?

When considering an ACH

Cost: Wire transfers often have higher fees than ACH transfers.
Sending limits: Sending limits can also vary between ACH and wire transfer providers. You can often send larger amounts more frequently through wire transfers.
Required information: Wire transfers typically require more detailed information like routing numbers, recipient details, bank transit numbers, and identifying information and/or documents. ACH transfers usually require only account and routing numbers.

The right transfer method for you will ultimately depend on the scenario.

For example, a recurring ACH transfer can make the most sense for your monthly car payment, while a one-off ACH payment through a provider like Western Union might be great for sending money to family or friends in the US.

However, a wire transfer may be better when you need to make larger, time-sensitive payments, such as a down payment or wiring money to family or friends in need abroad.

ACH payment vs. wire transfers

Are you still going back and forth between ACH vs. wire transfer? There’s no need to overthink it. It boils down to this: An ACH payment is probably your best bet to send money in the US unless you need to send a large sum as part of a high-value transaction (such as a big investment or real estate purchase).

Otherwise, the flexibility and convenience of ACH-powered money transfers through providers like Western Union are tough to match. You can send money with Western Union in three ways—by mobile app, online, or in person. We provide speed and an array of receiving options (including cash pickup), even for those without bank accounts. And money transfers through Western Union are often ready for pickup within minutes.

FAQs

Which is better, ACH or wire transfer?

The best option will depend on your situation and preferences. For example, a conventional bank wire transfer is better when your top priority is to get money to another party as part of life’s large, formal transactions (like real estate purchases or big investments) or international payments. On the other hand, an ACH transfer can be better

Does an ACH take longer than a wire?

ACH payments typically take longer than wire transfers, but not by much. ACH payments are processed in batches and can take one to three business days or more. Through money transfer providers like Western Union, cash can be ready for pickup in just minutes.

Domestic wire transfers can take as long as one to three days to go through. International wire transfers can take one to five days to complete.

Are ACH and wire routing numbers the same?

ACH and wire routing numbers aren’t always the same, though both are crucial for electronic transfers.

ACH routing number: Think of it like a US ZIP code for electronic funds. It directs funds to the correct bank within the ACH network (usually 9 digits).
Wire routing number (ABA routing number): Like an ACH routing number but can be used for international wires. It’s not always the same as an ACH routing number for a bank.

Double-check with your bank for the specific routing number needed (ACH or wire) for your transfer.

Guides

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