Telegraphic transfer fees

A telegraphic transfer or TT is an umbrella term used to describe an electronic transfer of money from one bank account to another. Usually, these TT payments are made to a bank account based overseas, and often in a different currency.

Telegraphic transfers have lots of different names, but whatever your bank calls them, they can come with pretty high fees. Costs can be added by the sender’s bank, and the recipient’s bank - but also by correspondent banks along the way if the money is moved using the SWIFT network. More on that later.

If your bank isn’t offering you a good deal on your TT payment, then it’s well worth checking out alternative providers such as Wise. You could find that your payment is cheaper* - and often faster and easier to arrange - than using a TT bank payment.

Here’s all you need to know about telegraphic transfers - and how to limit or avoid the costs associated with them.

A quick guide to wire transfer terminology

As we’ve seen, a telegraphic transfer is where you’re sending money electronically with your bank or an alternative non-bank provider, to be deposited to someone else’s bank account, either in the US or overseas. Where this can get confusing is that telegraphic transfers can have lots of different names.

A telegraphic transfer may also be known as a telex transfer, and can be shortened to either just TT or T/T. The exact terminology used varies from country to country - and depends on the transaction itself too.

You might also see these transfers described as remittances or wire transfers. In any case, we’re talking about the same thing - the process of arranging a payment from one bank to another, electronically, for direct deposit to your recipient’s account.

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Telegraphic transfer (TT) fees: what can you expect?

One of the reasons TT payments can be costly is that there are often several different fees to pay on a single transaction. These will vary a bit depending on exactly what currency you’re sending, and where.

You’re likely to come across the following:
A charge made by the bank arranging the transfer (sending bank fee) Fees taken by intermediary or correspondent banks, as your money moves overseas through the SWIFT network A currency spread or markup added onto the exchange rate Costs charged to the recipient by their bank

TT bank payment sending bank fee

When someone sets up a TT payment, they’ll usually be charged by their own bank to do so. This could be a fixed cost, or a percentage of the amount transferred, depending on the bank and account type.

The details of the costs will vary, but the fee is usually charged up front, or removed from the amount being transferred before it’s converted into the currency of the recipient’s bank account.

TT bank payment intermediary bank fees (up to 3 banks)

Once the TT bank transfer is on the move, it’ll usually be processed via the SWIFT network. This is the global network of banks which was set up to move money internationally.

Although the SWIFT network is well established and safe, it’s not a quick option, and usually comes with high fees. Even worse, it’s not always possible to know exactly what the fees might be before the transaction is completed, because each bank that has a hand in moving your money can apply a fee. With up to 3 different correspondent banks working together on a single transaction, this can get pricey.

Alternative providers like Wise use a different approach to moving money internationally and can help you save by not having your money go through intermediary banks at all.

TT bank payment exchange rate markups

Telegraphic transfers can also come with some fees which are harder to calculate - a common one being an exchange rate markup.

This happens when banks take the mid-market rate, and add their own margin on top as a markup. Your transaction can cost you more than you expect, as a result.

Check the exchange rate your bank is offering you against the mid-market rate by simply googling your currency pairing, to see if you’re getting a fair deal. And if not, go elsewhere.

Not all services add a markup to the exchange rate being used. For example, if you arrange your international money transfer with Wise, you’ll get the mid-market rate - with the costs split out so you can check and compare them, and no hidden fees.

TT bank payment recipient bank fee

Finally, the recipient might also have to pay a charge levied by their own bank, in order to receive a TT payment.

These fees vary between account types, and banks - check out the details of your own bank account, in their terms and conditions, which should be available online.

How much can a bank wire cost?

So, we’ve reviewed the range of fees you might encounter when sending a telegraphic transfer with a US bank - but what will the total cost be? While each transfer is likely to be different, we can look at a few examples to paint a picture.

To learn more about your specific account or payment you’ll need to review your own bank’s terms and conditions carefully. Let’s take a few key examples.

TT bank payment sending fee

To give a flavor of the costs of sending a TT bank payment in the US, here are a few costs to consider:

Bank/TT service	Bank of America®¹	Wells Fargo®²	Chase®³
Outgoing domestic TT	30 USD Some waivers available for Diamond and Diamond Honors customers	25 USD	25 USD online 35 USD by phone or in branch
Outgoing foreign TT in foreign currency	No fee from BoA	No fee	5 USD fee, waived for payments above 5,000 USD online 50 USD by phone or in branch
Outgoing foreign TT in USD	45 USD Some waivers available for Diamond and Diamond Honors customers	25 USD online 40 USD by phone or in branch	40 USD online 50 USD by phone or in branch

You’ll notice that the fees vary quite a lot, based on the way you arrange your payment and the currencies involved. If your bank doesn’t charge a fee for outgoing TTs in a foreign currency, that’s likely because there’s a markup on the exchange rate, which is where they cover their costs and generate a profit. More on that in a moment.

TT bank payment SWIFT fees

Bank intermediary fees vary a lot, and can’t always be known in advance. When you set up your TT payment with your bank you’ll not usually know which intermediaries - and how many - will be involved.

Some banks may be able to give you an indication of the intermediary bank charges - but this might not be possible. Instead, you’ll find banks include disclaimers like ‘third party fees may apply’ in their fee schedules to cover this possibility.

So what’s the likely damage? Up to 3 intermediaries can be involved in a single payment, with fees often in the region of 10 USD - 30 USD per bank, or even more.

As these fees are deducted from the amount you’ve sent as it passes through the SWIFT system, the end result can be that your recipient gets less than you expected.

TT bank payment exchange rate

Bank’s don’t generally declare their exchange rate markup. Again, you’ll usually find something in your account terms and conditions which says your bank ‘makes money on currency exchange’ or ‘offers an all-in exchange rate’.

This means that the bank can use a variable makeup depending on the transfer you’re making, including the currency, value and channel you use.

To see the exchange rate markup being used for your specific payment, compare the rate your bank quotes you against the mid-market rate from Google, or from a currency conversion tool.

TT bank payment recipient fees

Our final likely cost is actually applied by the recipient’s own bank. These fees can vary depending on where in the world your recipient is. In some countries they’re pretty high, in other countries there may be no fee at all.

You’ll need to ask your recipient to check the terms of their account to learn more about the costs here - but to give a bit of an idea, we’ll look at the TT bank payment recipient fees for incoming transfers to a few popular US banks:

Bank/TT service	Bank of America	Wells Fargo	Chase
Incoming domestic or international TT	15 USD Some waivers available for Diamond and Diamond Honors customers	15 USD	15 USD, waived in some circumstances if the transfer has come from another Chase account

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Telegraphic transfers can be a bit confusing - particularly because they are called so many different names by different banks and international transfer services. The process is actually relatively straightforward though - but that doesn’t mean it’s cheap.

Avoid the worst of the fees associated with TT payments, by doing your research in advance. You could find you’re better off using an alternative provider like Wise, instead of sticking to your bank.

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Sources:

1. Bank of America - Advantage Plus banking fees
2. Wells Fargo personal fees
3. Chase personal fees

Sources checked on 05.24.2024