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Telegraphic Transfers

When you are sending or receiving an international money transfer through your bank, you often come across the term “telegraphic transfer”, “telex transfer” or “TT”. It is one of the commonly used methods of international money transfers. In this guide, we will tell you what telegraphic transfers are, how they work, and the charges they tend to incur. Keep reading to find out how you can use telegraphic transfers to send money abroad across international borders.

Updated: 18/10/2022
Read time: 9 minutes
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What is a telegraphic transfer?

Traditionally, a telegraphic money transfer was a means to move money between accounts using a cable, radio, or telephone – with the term ‘telegraphic’ referring to when transfers were made using telex. Money is not transferred this way anymore, but the term telex transfers continue to be used interchangeably with wire transfers and means any electronic transfer of funds. 

Today, in place of telex, banks use the SWIFT network to make international money transfers. The Society for Worldwide Interbank Financial Telecommunication (SWIFT) provides a network that enables banks and financial institutions worldwide to send and receive information about financial transactions in a secure and standardised environment.

How telegraphic transfers are different from bank transfers?

Technically, there is no difference between a telegraphic money transfer and a bank transfer. When you make an international money transfer through your bank, it is sending your money as a telex transfer. In the US, the most commonly used term for this is a wire transfer, whereas in Australia, New Zealand, and the UK, it is more often called a telegraphic transfer. Follow our guide to find out more about international wire transfers.

How telegraphic transfers work?

A telegraphic transfer happens electronically and works by transferring money between different banks until it reaches its destination. Once the transfer is initiated at the source bank, the money passes between banks with pre-existing relationships. These banks are known as correspondent banks. 

Each of the intermediary banks in this process will have its own processing time and fees, which can make telegraphic money transfers slow and expensive depending on your transfer route.

Banks do not physically send money across the countries. They have a system of nostro accounts across the world to make transferring money a simpler and faster process. This system allows the correspondent banks to add and deduct money from these nostro accounts for payments sent to them by other partner banks, enabling the process to be fully electronic.

When you send a telex money transfer to someone overseas, it will typically pass through a series of nostro accounts in different countries and different banks before it reaches the destination. The number of banks involved in the transaction depends on where the money is coming from and going. On common routes, only one or two banks may be involved. On other routes, such as when transferring money from Australia to somewhere in Europe 3-4 banks may be involved. 

This process all happens in the background, so you don’t really need to be concerned about it. If you’re interested, though, how elegraphic transfer works involve the following steps:

  1. You instruct your bank to transfer funds to a beneficiary in another country. You can do this by visiting the branch or logging into internet banking services.  
  2. Your bank will send the funds to a partner bank in the destination country. If the beneficiary’s account is in the same bank, the funds will be credited to their account and the transaction is complete.
  3. In case the beneficiary’s account is another bank, the receiving bank will transfer funds to the beneficiary’s bank to complete the transaction.
  4. This is the shortest possible journey your money will take on its way to the beneficiary account. It may pass through two or more banks before it reaches the final destination. 

Pros and cons of telegraphic transfers

Telegraphic money transfers are one of the most commonly used means of transferring funds from one country to another. Like any other money transfer method, transferring funds in this way has both its advantages and drawbacks.

Pros
Convenience: Telegraphic transfers are convenient as you just need to use your bank and make the transfer. You can even initiate the transfer from your bank app or browser.
Security: Telegraphic transfers are a reliable and safe way to transfer money. You can transfer even large amounts of money securely.
High limits: As opposed to other forms of sending money such as cash payments, telegraphic transfers have high limits and are the most suitable way to transfer large amounts.
Cons
Speed: Telegraphic transfers are not the fastest way to transfer funds. The money may need to be transferred between many banks before reaching the beneficiary account, and it may cause delays.
Cost: Telegraphic transfers sometimes come with high fees, depending on the transfer route being used. Typically you can see landing fees being charged, along with high exchange rate margins if using your bank to make your telex transfer.
Cost: Telegraphic transfers sometimes come with high fees, depending on the transfer route being used. Typically you can see landing fees being charged, along with high exchange rate margins if using your bank to make your telex transfer.

How much do telegraphic transfers cost?

There are several types of fees associated with telegraphic transfers fee, and the exact amount your transfer costs will depend on a variety of factors including the amount you’re transferring and which currencies are involved. Each money transfer goes through multiple banks, which means, each of the intermediary banks may charge a fee. Typically, you may have to pay the following fee for a telegraphic transfer:

  • Sending fee: This is the fee that your bank will charge for transferring your funds overseas. This varies from bank to bank but is usually between $10 and $30. 
  • Intermediary bank fee: When your money is being transferred from Bank A to Bank B, it may get routed through Bank D, Bank E, or any number of banks on the SWIFT network. Each of these banks will charge a fixed fee on your transfer. This fee would also generally be between $10 and $30. With each bank deducting a fee, the total fees can quickly add up and the total money reaching the beneficiary account can be much lower than expected. 
  • Exchange rate mark-up: This is the cost not many people are aware of. When you make a transfer, you tend to check exchange rates on Google and assume that your transfer will occur at this rate. However, in reality, banks charge a mark-up on this rate, which can range from 1%-5% depending on a number of factors. This cost can be significant if you are moving large amounts. 
  • Receiving fee: Once the money reaches the beneficiary account, their bank may also charge a fee for receiving an international transfer.

To help you save on the costs, we’ve put together a guide on finding the cheapest way to send money abroad.

How fast are telegraphic transfers?

Generally, a telegraphic transfer takes 2- 4 days to complete depending on various factors including the origin and destination of the transfer, the currencies involved, and the amount being transferred. Also, since the transfer occurs across international borders, the process can take longer due to different time zones, weekends, and holidays. 

In some cases same-day transfers are possible, but this is not true for all transfers and is generally limited to more common currency routes. However, on some currency routes, the transfer may take up to a week. You should check the expected delivery times with your bank before you initiate the transaction. 

To help you send money quicker, we’ve put together a guide on finding the fastest way to send money globally.

How do I make a telegraphic transfer?

Making a telex money transfer is a simple and straightforward process. There are three key steps involved in setting up a telegraphic transfer. These include: 

  1. Go to your bank: You can go to your bank and ask them to send a telegraphic transfer. If you have access to the internet banking app or website, you can make the transfer by logging into this platform. 
  2. Provide details: Fill in the details of the beneficiary. If you are sending money to your own international account, fill your own details. To send a telegraphic transfer to an international bank account, you will need to provide the following information:
    1. Transfer details: 
      • Amount being transferred
      • The currency
      • Reason for making your telegraphic transfer
    2. Sender details:
      • Your name
      • Your bank account details
      • Personal details including address and phone number
    3. Beneficiary account details
      • Recipient’s full name
      • Recipient’s bank account number
      • Bank name
      • Branch address
      • SWIFT/IBAN code
  3. Pay for the transfer: You will need to pay your bank for the transfer. If you have sufficient balance in your bank account, you can have your account debited directly. 
  4. Send money: Once you have sent money via telegraphic transfer, it will take 2-4 days for the funds to reflect in the beneficiary account. 

These are the basic steps involved in a telegraphic transfer, but your bank may request more information about your money transfer to meet internal security policies or anti-laundering regulations. 

Summary

Telegraphic transfers refer to electronic transfer of funds over the SWIFT network. In the US, you’ll most commonly hear telegraphic transfers referred to as wire transfer, whereas, in Australia, New Zealand and the UK, the term telegraphic transfer is more frequently used. So, it is your normal international bank transfer, wherein the funds are routed via a network of banks before it reaches the beneficiary account. As the process involves money moving between a variety of banks, telegraphic transfers can attract high fees, so it’s best to check this before making your transfer.

Telegraphic transfers are a convenient, safe and reliable way to transfer funds overseas. However, it is not always either the quickest or the cheapest method of doing so. Today there are many specialised money transfer companies that employ the latest technologies and have local bank accounts in countries they operate in, which helps them bring down their costs and transfer times significantly. 

If you are planning to make a telegraphic transfer to send funds overseas, you should first check other available options, as you always want to make sure you’re getting the best possible deal before making a transfer. You can use our comparison tool to find out the best way to transfer funds to your intended location, and within a couple of seconds we’ll display the best companies available to help you complete your international transfer.

Cheaper alternatives to telegraphic transfers

To reduce the cost of international transfers, you need to choose alternatives to telegraphic transfers. Choose specialist transfer providers that offer a competitive deal to save large amounts of money. They provide fixed and variable rate fee structures that offer a fair fee for all transfer sizes.

XE Money Transfer is an example of a service that provides excellent deals. They are the authority for currency conversions, which is perfect for international transfers. Use our comparison engine to see the live rates for the transfers you need to execute.

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Article Factchecked by Elliot Laybourne on 20th July 2022

Elliott is a former investment banker with a 20 year career in the city of London.

During this time he held senior roles at ABN Amro, Societe Generale, Marex Financial and Natixis bank, specialising in commodity derivatives and options market-making.

During this time, Elliott’s client list included Goldman Sachs, JP Morgan, Credit Suisse, Schroders Asset Management, and the Pennsylvania State Public School Employees Retirement System, amongst others.

Jonathan Merry

Jonathan is the founder and editor of MoneyTransfers.com. Jonathan is highly experienced in the currency transfer market, having previously worked in the FX trading industry, alongside being an avid traveller. Using his knowledge he identified a need for transparency and further education to help people save money on their money transfers, leading to the creation of MoneyTransfers.com

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