ACH vs Wire – What Is The Difference?

Are you looking into your options for sending or receiving money? Perhaps you’ve heard of ACH transfers and wire transfers but don’t know the difference between the two?  Wire transfers are electronic transfers that are processed by banks – while ACH transfers are also electronic transfers but are processed by the Automated Clearing House Network. 

There are some noticeable differences between ACH Transfers and wire transfers. We’ll compare ACH vs. wire transfers so you can decide which is best for you.

Security – Is ACH or Wire Transfer Safer?

Both ACH transfers and wire transfers are considered safe. However, it’s possible that neither is immune to occasional security breaches. Both ACH transfers and wire transfers could pose potential risks in different ways.

ACH

While ACH transfers are safe, the biggest concern is that ACH transfers into your bank account can be reversed. However, this is rare as most banks strictly regulate reversals. If this does happen to you, it’s likely that a mistake has happened or there has been a case of fraud. 

Wire

Wire transfers are also a generally safe way to send and receive money. The only main security issues associated with wire transfers are scam or fraud risks. Because funds are available for withdrawal almost immediately after they’ve been wired, it’s impossible for transfers to be reversed. This poses less of a threat if you are receiving money via wire transfer. However, if you’re sending money via wire transfer, it’s important you verify who you are sending the money to. 

Speed – How Quicky Will You Get Your Money?

An important factor to consider before you plan on transferring money is how long it will take to deposit. Timeframes can vary depending on whether you are using an ACH transfer or wire transfer. 

ACH

ACH transfers can take anywhere from 2 to 5 business days to deposit. This timeframe is due to multiple parties involved in processing the transfer, including the bank, ACH, and Federal Reserve. However, ACH systems are rapidly moving towards same-day transfers. You should expect to see faster transaction times in the future. 

Wire

Wire transfers are usually processed within one business day. Money tends to move much more quickly with wire transfers because banks are the only parties involved in the transfer. That said, it can still take a couple of days before you are able to withdraw your money. Sometimes, bank employees may need to verify the funds. If you are wiring money internationally, it can take up to a couple of days to process. 

Cost – Do These Transfers Cost Money?

Costs are a major deciding factor when you’re considering how to transfer money. There are some key differences between how much ACH transfers and wire transfers will cost you. 

ACH

Most ACH transfers are free. If you are sending money, you may have to pay a couple of dollars in the rare case that you are charged. If you are receiving money, you most likely will not be charged at all unless you need the money instantly. For example, money sharing apps like Cashapp and Venmo will charge a couple dollars to get funds into your account right but charge no fees for regular processing times.  

Wire

Wire transfers tend to be more pricey than ACH transfers. You can be charged anywhere from $15 to $25 if you are sending money to a domestic bank – and up to $45 if you are sending money internationally. Unlike ACH transfers, it’s hard to avoid wire transfer fees.

When Are They Used? 

Because of the differences between ACH transfers and wire transfers, it may make more sense to use one method over the other in certain scenarios. Take a look below to get an idea. 

ACH

ACH transfers are best for smaller, frequent transfers. Whether you are paying bills or sending money to a friend to cover your share of last night’s dinner – ACH transfers are a good choice because they are simple and in most cases, you won’t be charged. Here are some everyday scenarios where ACH transfers work best. 

  • Direct deposits
  • Paying bills online  
  • Moving money between different bank accounts
  • Automatic contributions to savings accounts (i.e. retirement accounts)
  • Government benefits
  • Tax refunds

Wire

If you need to transfer a large sum of money or time is of the essence – a wire transfer is probably the best option. You will need to pay the fees, but they may be small in comparison to knowing that your funds will arrive quickly and securely. Below are some common scenarios where most people will use a wire transfer. 

  • International transfers
  • Down payments on a home
  • Emergencies
  • Large financial transfers

How to Get Cash Quickly

If you need cash quickly but you don’t want to pay the fees associated with wire transfers and you can’t wait a couple of business days for an ACH transfer to process – consider these alternatives.

InstacashInstacash is an instant, 0% APR cash advance from MoneyLion. You can get up to $250 instantly deposited into your bank account when you download the MoneyLion app, created a free account, and link your bank account. You only have to pay the money back when your next paycheck comes through. 

Credit Builder Loan – If you are looking to access a larger amount of money – consider a credit builder loan. MoneyLion’s Credit Builder Plus membership lets you qualify for up to a $1,000 loan with a 12-month term. Membership costs $19.99 per month and you’ll have the added bonus of boosting your credit score, enjoying credit monitoring, and more. Make sure to download the MoneyLion app to get started!

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