offshorebankwire.com

Bank Wire Transfers

Bank wire transfers are usually the fastest way to transfer funds between bank accounts.  In simple terms, here is how they work:

·         The sending bank transmits a secure message (via a secure system such as SWIFT, or Fedwire) to the receiving bank, requesting that they effect payment in accordance with the instructions given.

·         The message also includes settlement instructions. The actual transfer is not instantaneous, but may take several hours to transfer from the senders account to the receivers account.

How are banks able to “effect payment” without any money changing hands?

“Electronically” is the simple answer.  But, to understand better, the sending and receiving banks must either hold a reciprocal account with each other.

What happens when the sending bank and receiving bank don’t hold reciprocal accounts, which is often the case, especially when sending international wires or offshore bank wires?

The bank wire in question must first be sent to an intermediary bank with such an account, or a correspondent bank, for further benefit to the ultimate recipient.  While this is a logical solution, it is also the genesis of many undesirable side effects when sending international wires, namely;

• expensive delays,
• extra fees, and
• unwarranted invasions of privacy

In our next article we discuss what to look out for when sending international wires and ways to minimize your exposure to expensive delays, fees, and unwarranted scrutiny into your personal financial affairs.

This entry was posted on Wednesday, September 12th, 2007 at 10:40 pm and is filed under Bank Wires. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.