CH and wire transfers are different in a number of ways. They don’t have the same delivery methods, which means the fees and wait times of these transactions are also not the same. We’re here to describe how these transactions differ for all you entrepreneurs. Keep reading to learn more!
What Is an ACH transfer?
First things first, the acronym ACH means Automated Clearing House, which is an electronic network. You send most bank transfers from a personal or business bank account through this network. In other words, these transfers are the most common ways to send or receive money. Learn more about ACH transfers.
Source: The Balance
The money is sent from one account to another through a third party, which is the ACH network. Once this third party approves the transaction, the money will go through. Venmo is one such app that uses this network for you to send and receive money.
What Is a Wire Transfer?
A wire transfer sends funds directly from one account to another. All you need to complete this transaction are the account and routing numbers of the recipient. However, there are some vital differences between ACH and wire transfers.
How Are ACH and Wire Transfers Different?
Here are some of the main ways the two are different:
Wire Transfers Are Faster: Sending an ACH transfer usually takes about two to three business days. Meanwhile, wire transfers are completed in one business day or less.
ACH Will Cost You Less: A wire transfer is more expensive than an ACH one because of the speed of the transaction. The wire transfer will set you back between $0 and $35 domestically, or up to $65 internationally. ACH transfers are more affordable as they are usually free or about $3. In many cases, banks will charge you for either type of transaction.
Security Is Nearly the Same: An ACH transfer is a bit safer than a wire transfer because you can reverse funds from these in cases of payment fraud or errors, and this is something you can’t do with wire transfers. However, both are fairly secure.
Novo Doesn’t Charge for ACH or Wire Transfers
With a Novo account, you will not be charged any fees on ACH transfers or incoming wires (both domestic and international). We also offer no minimum balance requirements, no ATM fees with your Novo debit card, and no hidden fees.
Apply for a Novo account today, and get the banking tools you need to grow your small business!
Both ACH and wire transfers are great ways of sending money for small business owners, but there are key differences between the two. Wire transfers are faster but more expensive and slightly less secure. Choosing which one to go with is ultimately dependent on the type of business you’re running, and the urgency needed for these transactions.