What is Telegraphic Transfer?

In current times, transferring funds from one bank account to another does not seem like a challenging task. One can use a mobile banking application on a smart device and transfer funds with ease. However, this method works best only for transferring funds within the same country. Transferring funds to foreign bank accounts works differently. There are multiple ways to transfer funds overseas, including Telegraphic Transfer (TT) (or Telex transfer), wire transfer, and electronic transfer.

Telegraphic transfer is an electronic mode of funds transfer between bank accounts, and it is majorly used to carry out overseas wire transactions. Receiving money through a telegraphic transfer is known as an inward telegraphic transfer and sending money is known as an outward telegraphic transfer.

Telegraphic transfers usually take two to four business days to complete a transaction. However, the duration for transaction completion depends on the geographic location of the fund recipient. It also depends on the currency exchange requirements, as the funds get converted from one currency to another while getting transferred. This mode of funds transfer is typically done by financial institutions through the SWIFT network. You may also be charged a fee by the financial institution that has facilitated the transfer.

Keep reading to find out all you need to know about telegraphic transfers.

How Does Telegraphic Transfer Work?

In the telegraphic transfer process, funds may pass through several financial institutions, including the sender’s bank, recipient’s bank, and intermediary banks. The institutions involved in the transfer can have different processing times and fees. For this reason, telegraphic transfers can be more time-consuming and expensive when compared to other money transfer methods. In a telegraphic transfer, funds pass through the Society for Worldwide Interbank Financial Telecommunications (SWIFT), a system that allows financial institutions to securely share information and ensure safe transactions.

Fees Associated with Telegraphic Transfer

The fees associated with a telegraphic transfer can vary depending on the number of financial institutions involved in the transfer and the fees levied by each institution. Here are the various fees that may be levied by associated banks in a telegraphic transfer:

Fee Levied by the Sender’s Bank

This is the fee charged by the bank from which you are sending the money for a telegraphic transfer. The charges can vary across different locations.

Fee Levied by the Recipient’s Bank

This is the fee charged by the bank at which the recipient will receive the funds. The charges may differ depending on the geographic location of the recipient’s bank.

Fee Levied by the Intermediary Banks

Intermediary banks that are associated with the telegraphic transfer process also charge fees. However, as these banks work in the back end without having to connect to the sender or the receiver, the fees charged to facilitate the process may be unclear. You may have to do some additional research for more information.

Exchange Rate Markup

For any overseas funds transfer, funds have to be converted to the local currency of the receiver’s location. For instance, if an individual in Singapore wants to send funds to a receiver based in the United States, the transferred funds will be converted from Singapore Dollars (SGD) to US Dollars (USD). The conversion depends on the prevailing exchange rates. Also, the banks that facilitate this transfer may charge a specific markup on the exchange rate, which may vary across different financial institutions.

It is also worthy to note that not all financial institutions levy a fee on the telegraphic transfer process. Senders also have the choice of opting to pay transaction fees separately or have them deducted from the funds that they wish to send.

Requirements for Telegraphic Transfer

If you wish to make an overseas funds transfer, here’s what you need before proceeding:

Recipient’s Name and Address: Do make sure that these details are accurate and spelt correctly.

Recipient’s Bank Account Details: This information is essential to ensure that the funds are received by the correct recipient.

SWIFT Code: To carry out a telegraphic transfer, you will also require the SWIFT code of the recipient’s bank. You can either ask the recipient directly, look for it on the bank’s website or simply search for it online.

Bank Address: You will also need the bank address of your intended recipient. You can check it online or ask the receiver for it.

In conclusion, telegraphic transfers are one of the safest and simplest ways to send funds to someone based in a foreign land. However, keep in mind that telegraphic transfers typically take a few days to complete and may not be suitable if you need to do an immediate transaction.

Frequently Asked Questions

How does a telegraphic transfer work?

Telegraphic transfers allow one to transfer funds overseas. When the sender’s bank receives the instruction from the sender, it initiates the process of transferring the funds. Then, the funds are passed through the SWIFT system between several correspondent banks before finally reaching the recipient’s account.

How long do telegraphic transfers take?

Telegraphic transfers can take between two to four business days.