A guide to US bank fees for wire transfers—and why you should choose online money transfer instead

Banks often charge high fees for international wire transfers. To move money more efficiently and cost-effectively, we encourage you to explore other options.

Xe Consumer

2020年10月14日5 min read

Young woman calculating her payments in front of a computer

A scant ten years from now, freelancers could make up 80 percent of the world’s workforce. Projects which were previously confined to one office, or maybe a few branch offices, could reach across international boundaries. Imagine having project stakeholders in the United States, South Asia, and Europe. These environments are not too unusual today. They could be even more common by 2030. Additionally, many people have friends and family overseas. Sending money securely and conveniently is an important way of connecting with people who are far away.

Project stakeholders must be paid on time, or the project falls behind schedule. And, when people overseas need money, a reliable, efficient, and low cost money transfer system is essential. Wire transfers to another bank, or bank-to-bank wires, are usually the top of mind way to move money quickly across international boundaries. The problem is that bank-to-bank wire transfer fees are often rather high.

At Xe, we facilitate international money transfers entirely online, through our own channels. As a result, our money transfer cost is much less than bank-to-bank wire transfers due to the lack of additional third-party fees. Additionally, Xe is much more flexible. Many overseas individuals do not have U.S. bank accounts. FinTech transfers enable foreign stakeholders and anyone else to access their money almost anywhere.

What are US bank wire fees?

Fees are an inevitable part of FinTech, bank, or any other money transfer service. Since deregulation in the 1980s, banks have charged higher and higher fees. Non-interest income, such as wire transfer fees, account maintenance fees, and so on, now account for about a third of bank revenue. As a result, most banks charge the highest possible wire transfer fees. Some examples include:

  • Chase Bank

    • Incoming Domestic - $15

    • Outgoing Domestic - $35

    • Incoming International - $15

    • Outgoing International - $50

  • Bank of America

    • Incoming Domestic - $15

    • Outgoing Domestic -$30

    • Incoming International - $16

    • Outgoing International - $45

  • Wells Fargo

    • Incoming Domestic - $15

    • Outgoing Domestic - $30

    • Incoming International - $16

    • Outgoing International - $45

  • Citibank

    • Incoming Domestic - $15

    • Outgoing Domestic - $25

    • Incoming International - $15

    • Outgoing International - $45

  • PNC

    • Incoming Domestic - $15

    • Outgoing Domestic - $30

    • Incoming International - $15

    • Outgoing International - $45

These fees often vary, largely depending on the type of account and the account status. Additionally, many foreign countries impose their own wire transfer fees, and if the money travels through an intermediary institution, those parties will also impose fees—and those fees won’t be known to the customer.

How do I compare bank wire fees in the US?

Not all banks charge the same fees for the same services, so these comparisons are not always apples to apples. To better compare bank transfer fees, and how they measure up to other types of money transfer fees, it’s best to look at the specific elements of an international wire transfer. For example:

  • Outgoing vs. incoming: The sender usually bears most of the costs, and most of the risk, associated with international wire transfers. Therefore, outgoing transfers are usually much more expensive than incoming transfers.

  • Exchange rate: The bank-to-bank exchange rate is usually higher than the standard exchange rate. As mentioned, banks count on fee income, so a few dollars here or there could make a significant difference.

  • Initiation and tracer fees: It should not matter whether you initiate the transfer online, by phone, or in person. But many banks charge higher fees for some initiation methods, and there is usually little rhyme or reason.

Admittedly, this discussion is a bit theoretical. Keep reading to see how things work in the real world of international wire transfers.

Transfers in action: comparing the bank and online money transfer experience

There are three basic ways to send money overseas. There’s a bank transfer, a wire transfer, and an Xe or other FinTech online money transfer.

First, let’s look at the exchange rate. As mentioned, banks and wire transfers often charge high fees whenever possible, which includes baking them into the exchange rate, causing it to appear higher than the mid-market rate. Even if the difference seems insignificant, it can add up, particularly if you’re transferring a large amount. Streamlined providers, like Xe, usually charge lower exchange rates closer to the true mid-market rate of exchange.

Next, consider the fees. As outlined above, the standard bank outgoing wire transfer fee is $30. Money transfer services usually charge lower upfront fees, and typically won’t surprise you with additional fees hidden in the transaction. You can probably see where this is going.

Finally, consider the time. Xe money transfers typically complete in 1-4 business days, with most being completed within 24 hours and some only taking minutes. Bank wire transfers could take up to five days, and FinTech transfers normally take up to two days. Bank holidays and limited bank business hours could further delay transfers initiated through banks.

For those of you keeping score at home, here is how these different transfers come out in the end.

  • Banks: High upfront fees (along with numerous hidden transaction fees), marked-up exchange rates, fairly fast transfer times (that could face delays).

  • Wire transfers: Upfront fees (along with intermediary fees), marked-up exchange rates, fairly fast transfer times.

  • Xe money transfers: No hidden third-party fees, favorable exchange rates, quick transfer times.

In most cases, bank transfers will be the slowest and most expensive method of sending money overseas. While wire and cash-to-cash transfers travel quickly,The bank transfer is the slowest and most expensive transfer. The cash transfer is the fastest and cheapest. But it’s also the most cumbersome form. So, the clear choice is the Xe international money transfer. It combines low cost and convenience.

A secure, convenient, and low-cost international funds transfer keeps stakeholders happy and productive. Log in or sign up to get started with Xe today.