There are many methods of transferring money to locals and people living overseas. It is essential always to have some financial security because emergencies come without warning. Many Indians are living in foreign countries and require money for their survival. They need to meet their priorities, including medical expenses and other immediate requirements.
Without enough money, it becomes difficult to survive. Hence, money transfer services help them get funds immediately without waiting for too long. A telegraphic transfer is an electronic mode of transferring funds utilised for overseas wire transactions. Initially, people used telegraphs to communicate the transfer between financial institutions. However, they have become obsolete, with modern technology now allowing cable networks to transfer funds.
As a result, it is now referred to by the more general term wire transfer, which is a safe way to send money overseas. Funds sent between institutions get transferred through the Society for Worldwide Interbank Financial Telecommunication (SWIFT) for international transfers. Here are the steps involved:
- The sender instructs the bank to send funds overseas to a beneficiary by visiting the branch or online banking.
- The sender’s bank sends funds to a bank it deals with in the destination country. If the beneficiary has an account in that bank, the funds get credited to it, and the transaction is complete.
- If the beneficiary’s account is at another bank, the funds are transferred again to that bank, at which point the transaction is complete. The funds may pass through two or more correspondent banks before it finally reaches the beneficiary’s bank.
How do they differ from wire transfers?
Telegraphic transfers of money are entirely different from wire transfers. Bank wire transfers can seem costly, especially for international payments. Financial institutes can charge almost USD 40 or more to send USD 5000 to the United States. For larger amounts, they may even charge higher.
The funds may pass through more than one intermediary bank on their way to the recipient’s account. Each of these banks will charge an even higher sending fee. Some banks and credit unions will even charge the recipient a fee to receive the funds by wire.
Wire transfers typically take around three business days to transfer money between bank accounts. International transfers may take up to five business days or even longer because some countries have inefficient and outdated banking systems. But telegraphic transfers happen instantly or within one business day. Both methods are a secure way to transfer funds to bank accounts. Fraud liability laws also protect senders while they make online payments.