ACH vs Wire Transfer: Key Differences Explained With Examples

ACH vs Wire Transfer
ACH vs Wire Transfer
ACH vs Wire Transfer
Mesan Ali
Mesan Ali

Jun 22, 2024

Jun 22, 2024

9 min read

9 min read

ACH and Wire are two different ways to transfer funds electronically. Both methods vary on fees, speed, and a bunch of other factors that we will discuss in this article. 

Knowing the differences you can make a better decision when making your next transfer. The right decision can save you time and money, provide security, and help you prioritize based on your need of the hour. 

ACH vs Wire: Overview

ACH transfers are completed through a clearing house – a network of financial institutions – that does not require a bank. ACH transfer is usually free of cost but takes longer to process. 

Wire transfers are processed through banks and are usually used for larger, cross-border transactions. Wire transfers cost you a fee, but can be completed within minutes. 

What is an ACH Transfer?

An ACH transfer is an electronic payment method facilitated by the Automated Clearing House (ACH) network. This is a US-only network and consists of over 10,000 financial institutions including banks and credit unions. Multiple transactions are batched together and processed on a fixed schedule.

How ACH Transfer Works + Examples

All ACH transfers are processed in batches. ACH transactions for each institution are submitted up to five times a day using the ACH instructions from the originating bank. This is why an ACH transaction can typically take a few hours to a few business days to complete. The standard processing time is typically one working day for debit transactions and a maximum of two working days for credit transactions. However, users can pay a fee to ensure completion on the same day.

Some common examples of ACH transactions include:

  • Direct deposits for payroll, government benefits, and tax refunds (ACH credits)

  • Direct deposits from Freelance Platforms like Upwork are free.

  • Online bill payments and recurring subscriptions (ACH debits)

  • Person-to-person payments using apps like Paypal, Venmo or Zelle

  • Business-to-business payments

What is a Wire Transfer?

Wire transfers (originating from the name “telegraph wire”) are direct transfers between any two financial institutions. Intermediaries are involved when an international wire transfer is processed. Also called remittance transfers, wire transfers are typically used for larger sums of payments for example a purchase of a property. 

How Wire Transfer Works + Examples

In the case of a wire transfer, the sending bank sends a message that includes the payment instructions to the recipient bank through a secure system.

A wire transfer is an electronic method of transferring funds from one bank account to another, either domestically or internationally. It involves the sender providing the recipient's bank account information and the amount to be transferred to their bank, which then initiates the transfer through a secure network such as SWIFT or Fedwire. The recipient's bank receives the transfer and deposits the funds into their account, and the two banks settle the payment on the back end.

Wire transfers are generally secure and reliable, but they can be expensive due to fees charged by the banks involved. They are commonly used for large transactions, such as real estate purchases or business transactions, where speed and security are crucial. Some examples are: 

  • Real estate transactions

  • Business-to-business payments

  • Paying invoices

  • Sending money to family

  • Remittance transfers

  • Transferring funds between accounts

ACH vs Wire: The Differences

Some major factors differentiate an ACH transfer from a wire transfer. 

Processing Speed

ACH transfers take longer than wire transfers. 

ACH transfers are typically completed on the same day depending on the time of the day they were initiated. Three deadlines must be met to ensure your ACH transfer is completed on the same day. If you do not meet these deadlines, you can pay an additional fee to process your transaction on the same day. However, if you do not meet the deadlines and choose not to pay a fee, your transaction will be completed on the next business day. 

Wire transfers are mostly completed immediately after the receiving bank signs off on the message. However, sometimes due diligence can cause slight delays. Either way, a wire transfer is relatively faster. The sender can either pay a premium to use the Fedwire network and get their transfer disbursed immediately, or the transfer can be routed through the Clearing House Interbank Payment System (CHIPS) which will be completed depending on the time of the initiation. A transfer through CHIPS is settled the same day if initiated before the bank’s mid-day deadline; otherwise, it is completed the next business day. 


ACH transfers are way cheaper than Wire transfers. 

ACH transfers are typically free of any cost or can charge a very minimal fee. Since transactions are processed in bulk, there are very little administrative costs involved in the transaction. ACH transfer fee can be 1-1.5% and usually capped at $5. However, consumers are seldom charged this fee, and is usually on the bank itself. Try a free ACH transfer with Elevate Pay now. 

Wire transfers can be quite expensive and charge both parties involved in the process. A domestic Wire transfer fee is up to $30 for the sender and $20 for the receiver. Add another $15-30 on top of that for an international wire transfer.

Type of Transaction

ACH transfers are used for more frequent, smaller transactions where as wire transfers are for urgent, larger transactions.

The ACH network is mainly used for paying bills automatically, sending money to your friends and family, moving money between your bank accounts, and receiving your paycheck, government benefits, or tax refunds directly into your account. These transactions are typically routine and involve smaller amounts of money.

On the other hand, wire transfers are frequently used when you need to send or receive money quickly, or when you're dealing with large amounts of money. Wire transfers are commonly used in real estate transactions like buying or selling a house, purchasing a vehicle like a car, or paying federal taxes. They are also commonly used for sending or receiving money internationally across different countries. Unlike the ACH network, wire transfers are better suited for urgent, high-value transfers, both domestically and internationally.

Size and Limitations

ACH transactions are higher in volume compared to wire transfers which carry a bigger amount. 

In 2023, over $80 trillion was moved using ACH transactions across 30 billion transactions. This leads to an average ACH transaction size close to $2500. The slower process makes ACH transfers more suitable for smaller transactions.

Over 193 million Wire transactions were made in the year 2023 totaling to a value of more than $1,087 trillion. This means the average transaction value for Wire transfers in 2023 stands at $5.62 million. However, these numbers are taken from Fedwire whereas many Wire transfers are also completed through CHIPS. Still, we can consider the numbers to determine the average size of the transaction. The fast completion process and individual attention to the transaction make it more suitable for larger transfers. 

Global Reach

ACH transfers are currently only used in the US where as wire transfers are popular around the world. 

ACH transfers are mainly within the US. Occasionally, ACH transfers can be global but it heavily depends on your bank and your destination. The high coordination required for International ACH transfers is the challenge keeping it from being widespread. 

Wire transfers are global with cross-border and cross-currency transactions taking place every day. However, there are high costs associated with a currency exchange fee of 2-3%. 


ACH transfers can be recurring whereas wire transfers are one-off. 

ACH transfers are suitable for repeated transactions like paying bills or salaries. With standard permissions less-costly debit and credit transactions can be completed more frequently. 

Wire transfers are one-off transactions that require separate authorizations and fees. 

Chances of Scam/Mistakes

Both ACH and Wire transfers are vulnerable to scams despite strict security measures. 

For ACH scammers try to divert transactions from government entities. However, in case of a mistake, an ACH transaction can be held back because of the time-consuming process. 

Wire frauds are different. Scammers try to lure you into transferring money to their accounts by bribing you with lotteries, contest victories, and other such fake baits. Since a wire transfer is quite fast, holding it back by the time you realize your mistake can be very difficult; it’s a race against time. 


ACH reversals are possible but it’s near impossible to reverse or stop a wire transfer.

ACH transfers can be stopped, reversed, or canceled in many different ways on the same day as the transfer is processed. 

However, a wire transfer is very difficult to meddle with therefore you are advised to be 100% certain before proceeding with a wire transfer. 

Payment Options

ACH transfers are direct payments from bank accounts whereas wire transfers can be through bank accounts, debit cards, credit cards, and even online payment methods like Paypal. 

Security Bodies

The National Automated Clearing House Association (NACHA) oversees the ACH network for secure transactions. Consumer Financial Protection Bureau is responsible for safe wire transfers.

ACH and Wire Transfer: FAQs

Following are some of the most commonly asked questions about ACH and Wire transfers.

Which is better, ACH or Wire Transfer?

ACH transfers are the better option for cheaper, recurring payments that are not urgent and not too large. Go for wire transfers only in case of a large or urgent payment since they are quite costly.  

Should I use ACH or Wire Transfer for personal payments?

ACH transfers are the go-to solution for personal payments since there can be too many. You are recommended to use ACH for all personal payments where applicable. Using ACH you not only save a lot of money but also have the liberty to reverse your transactions. Wire transfers should only be used for specific transactions which are not possible using ACH. 

Is ACH or Wire Transfer Better for B2B Payments?

Most businesses opt for ACH transfers for B2B payments because of the high volume of payments. However, wire transfer is a rare exception when the payment is too big or urgent. 

Is there any Fee for ACH and Wire Transfer?

ACH transfers are usually free; however, the ACH transfers can cost around 1-1.5% in some cases. Wire transfers, on the other hand, cost up to $30 for the sender and $20 for the receiver. Consider adding another $15-20 to it if the wire transfer is international.

Does ACH take longer than a Wire Transfer?

Yes, ACH wire transfers take longer because transactions are processed in bulk at specific times of the day. Wire transfers are completed instantly as the transaction is processed individually. 

Using Elevate Pay for ACH and Wire Transfers

Get free ACH deposits with Elevate Pay. You can receive payments from clients, employers, and all major freelance platforms in your USD account using Elevate Pay. Yes, your remote USD bank account sponsored by Bangor Savings Bank is now possible with Elevate Pay. Whether you are using iOS or Android start using Elevate Pay today and sign-up for your USD account. You can also experience seamless wire transfers using the Elevate Pay app. 

You also get a virtual debit card to use and spend your money as per your convenience. 

Wrapping Up

Both ACH and wire transfers are very commonly used transaction types. They both have essential and distinct purposes for the consumers. Knowing which transaction is more suitable for the situation will help you make informed decisions when processing transfers in the future.

© 2024 Elevate Pay. Bloom Financial Technologies Inc trading as Elevate Pay is a financial technology company, not an FDIC insured depository institution. Banking services provided by Bangor Savings Bank, Member FDIC. FDIC insurance coverage protects against the failure of an FDIC insured depository institution. Pass through FDIC insurance coverage is subject to certain conditions.

© 2024 Elevate Pay. Bloom Financial Technologies Inc trading as Elevate Pay is a financial technology company, not an FDIC insured depository institution. Banking services provided by Bangor Savings Bank, Member FDIC. FDIC insurance coverage protects against the failure of an FDIC insured depository institution. Pass through FDIC insurance coverage is subject to certain conditions.

© 2024 Elevate Pay. Bloom Financial Technologies Inc trading as Elevate Pay is a financial technology company, not an FDIC insured depository institution. Banking services provided by Bangor Savings Bank, Member FDIC. FDIC insurance coverage protects against the failure of an FDIC insured depository institution. Pass through FDIC insurance coverage is subject to certain conditions.