(UPDATE: For an updated version of this article, please click here.)

Wire transfers are one of the fastest ways to send money to family and friends around the world. Although many consumers turn to money transmitters such as Western Union and MoneyGram for wire transfer services, there are instances when banks offer the better deal — especially for domestic transfers.

At money transmitters, the fees vary by the amount transferred, method of payment, and delivery time. A $1,000 same-day, domestic transfer at Western Union will cost $86. For a $100 wire transfer, the fee would be $12.

At the top 10 U.S. banks, the average cost of an outgoing domestic wire transfer (conducted at a branch) is $26.40. If you make the “cut-off time,” which varies by bank, the funds usually arrive on the same business day.

Here’s a chart of the wire transfer fees (made in-branch with U.S. dollars) charged by the 10 biggest U.S. banks:

BankDomestic - outgoingDomestic - incomingForeign - outgoingForeign - incoming
Bank of America$25$12$45$16
Wells Fargo$30$15$45$16
U.S. Bank$30$20$50$25
PNC Bank$25$15$45$15
TD Bank$25$15$40$15
Capital One$25$15$50$15

Banks appear to be a better deal for large domestic transfers. For small money transfers, money transmitters may be the cheaper option.

The headache of international transfers

Costs for foreign transfers are a little harder to calculate, because money transmitters and banks usually charge a transfer fee and then take advantage of the spread between currency exchange rates.

Providers of foreign wire transfers set their own currency exchange rates, which change on a daily basis.

By exchanging foreign currency at a lower rate than the actual rate, the recipient collects less money than expected — the difference is pocketed by the money transmitter or bank.

For example, as of Feb. 10, 2012, Western Union converted 1 U.S. dollar (USD) to 0.59578 United Kingdom pound (GBP); at Chase and Bank of America, 1 USD converts to 0.595 GBP and 0.6028 GBP, respectively.

According to Reuters, 1 USD converts to 0.6346 GBP.

CurrencyU.S Dollar (USD)U.K. Pound (GBP)Per $1,000 (GBP)
Western Union$10.59578595.78
Bank of America$10.6028602.80

Through Chase, a recipient would receive 39.60 GBP ($62.40) less; the sender effectively paid $107.40 for the foreign wire transfer.

What to do before sending money

Before paying for a foreign wire transfer, consumers should request the total amount of fees to be charged and the total amount that the recipient will collect.

To address this sketchy practice, the Consumer Financial Protection Bureau finalized a new rule — to take effect January 2013 — that requires all financial institutions and service providers to list exchange rates, fees and net delivered funds before consumers pay transfer fees.

Simon Zhen

Simon Zhen is a research analyst for MyBankTracker. He is an expert on consumer banking products, bank innovations, and financial technology.

Simon has contributed and/or been quoted in major publications and outlets including Consumer Reports, American Banker, Yahoo Finance, U.S. News – World Report, The Huffington Post, Business Insider, Lifehacker, and AOL.com.

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