What’s the Difference Between ACH and Wire Transfers?
Our money moves mostly via ACH and wire transfers, but there are some major differences between them, especially when it comes to speed and security. We’ve got it all explained!
In 2024, electronic fund transfers are more accessible than ever, from platforms like Zelle and Venmo to traditional direct deposits. Two popular methods for transferring funds are Automated Clearing House (ACH) and wire transfers. Here’s a closer look at their differences.
What is ACH?
Automated Clearing House (ACH) transfers and moves funds between bank accounts. ACH transactions can take up to three business days to process in batches through the Federal Reserve. This method is cost-effective and secure for recurring and non-urgent payments.
To set up your ACH transfer, please complete the ACH Authorization Form at least 10 days before you need the first transfer to take place.
Then, email the signed form to ach@agcu.org or fax it to 417-447-9399.
Common Uses of ACH Transfers:
- Direct deposit for paychecks
- Direct deposit for government benefits
- Automated bill payments
- Person-to-Person (P2P) payments
- Business-to-Business (B2B) payments
What is a Wire Transfer?
Wire transfers move funds from one financial institution to another domestically or internationally. They are nearly immediate, with funds usually accessible the same day. Once accepted, wire transfers are irreversible, making them ideal for urgent, one-time transactions but often come with higher fees. Learn more about sending and receiving wire transfers here
Common Uses of Wire Transfers:
- Down payments
- Federal tax payments
- Car purchases
Comparing ACH and Wire Transfers
1. Speed and Timing:
- ACH Transfers: Typically completed within one to three business days.
- Wire Transfers: Processed usually within a few hours the same day, with international transfers potentially taking up to 10 days.
2. Cost and Fees:
- ACH Transfers: Usually free or minimal cost.
- Wire Transfers: AGCU provides incoming wire transfers without surcharge. Members receiving funds by wire transfer should use the following instructions to ensure proper and prompt credit to their account. Receiving members should provide all information to the wire sender or wiring institution.
AGCU provides the service of sending outgoing wire transfers for a small charge. Members wishing to send funds by wire transfer can download and complete the Wire Worksheet.
Please email completed outgoing wire requests to wires@agcu.org.
3. Security:
- ACH Transfers: Generally low-risk due to the regulated clearing process. Fraud is less common, but tracking and reversing funds is possible if necessary.
- Wire Transfers: Higher risk due to irreversibility and limited traceability. Always verify recipient details to avoid scams.
Summary
While both ACH and wire transfers serve to move funds between accounts, their key differences lie in speed, cost, and security. ACH transfers are slower but more economical and secure, while wire transfers offer speed at a higher cost and greater risk.
Always verify recipient details and understand the implications of each transfer method to ensure safe and effective transactions. If you need assistance, don’t hesitate to contact us! Call (417) 831-4398 or fill out our contact form
