What Is a Telegraphic Transfer (TT)?

A telegraphic transfer refers to an electronic means of transferring funds from one bank account to another. The name is a legacy of the banking systems of the 19th century, which relied on telegraphs to communicate between the two banks. Today they are also referred to as wire transfers or electronic funds transfers (EFT).

In today’s modern system, banks on systems like the Federal Reserve System for domestic transfers within the US and Society for Worldwide Interbank Financial Telecommunication (SWIFT) for international transfers. Correspondent banks communicate the information regarding the transfer, either directly or through intermediary banks if they are not linked. The sending bank confirms the existence of funds that can pay for the transfer, and the beneficiary banks deposit the money to the recipient’s bank account thereafter.

Telegraphic transfers are usually quite fast for a domestic transfer and costly regardless of the type. Domestic transfers are generally cleared on the same day within a business week (Mon-Fri until 5 pm). These are fairly quick compared to ACH transfers which can take up to 3 days. International transfers may take between 2-4 business days.

There are now many options to send money internationally, and users can pay for their wire transfers by cash, credit, or debit card using services like Western Union or WorldRemit. Or potentially, they can open a global bank account through an online provider like VertoFX and begin sending and receiving transfers if they don’t have a bank account from high street banks.

There are several different fees involved with telegraphic transfers.

• Sending fee: This fee refers to the arrangement fee your bank charges for organizing the transfer, varying between USD 10-30 and can go up to USD 50 for international transfers.

• Intermediary bank fee: If there is no direct communication line between your and your beneficiary’s banks, your transfer has to get routed by intermediary banks on the SWIFT network. The fee also hovers around USD 10-30 and may add up with each participating bank deducting a fee.

• Exchange markup rate: Some of the costs of telegraphic transfers are hidden in the exchange rates. Services may add up to a 5% markup rate on top of the mid-market rate, which is the real exchange rate at which banks trade between each other.

• Receiving fee: The recipient may also end up paying a fee imposed by their own bank before they can access the transfer. It's USD 25 on average.

The costs are dependent on the institutions involved, as well as the currency pairs when it’s an international transfer. It is expected that the less common the currency pair, the more intermediary banks are needed. EUR/USD for example is the most commonly used currency pair in the world, so senders are likely to pay only sending and receiving fees as well as the exchange markup.

The origin and destination of the transfer and the currencies involved affect the delivery times of telegraphic transfers.

Domestic transfers also referred to as wire transfers, are typically completed within the same day. International transfers between commonly traded currency pairs may also be completed within 24 hours, but for other circumstances, it can take between 2-4 business days for funds to be available to the recipient.

Telegraphic transfers are among the safest ways to move funds between two bank accounts. The transfers are run through secure and internationally and nationally recognized systems, like the Federal Reserve System, the central banking system of the United States, or SWIFT, which connects over 200 countries and territories.

These networks are regulated by leading financial institutions. All legacy banks are also federally insured by the FDIC up to USD 250,000 per depositor.

SWIFT allows senders to request a refund if they believe a transfer was made in error or it is fraudulent. Domestic telegraph transfers, on the other hand, are hard to reverse. Most domestic wires are processed within minutes, and once the beneficiary bank accepts the payment, it’s not possible to cancel.

• Visit your bank’s online system or local branch: Domestic transfers are typically allowed by banks’ on their website or mobile application, but you may have to check if you’d like to make an international payment. If not, you may have to visit the bank or do it over the phone.

• Provide the details: Depending on the destination of your transfer, you will provide different beneficiary details.

• Pay for your transfer: You can deposit the money from your bank account directly, provided that you have sufficient funds.

Telegraphic transfers are generally deposited directly to the beneficiary’s bank account, so they don’t have to take action to access their funds.

Both parties need to have a bank account for a telegraphic transfer and their banking details at hand. Depending on the individual transfer, the sender may need to submit;

• Beneficiary name as it appears in official documents

• Beneficiary bank account number

• Beneficiary routing number/sort code/bank code

• Beneficiary SWIFT code / IBAN

• Beneficiary bank name and address

The recipient doesn’t have to have any information to have access to the funds, as their bank will accept it on their behalf.

Telegraphic transfer is a blanket term referring to many means of moving funds electronically and is used interchangeably with bank transfers, wire transfers, or in most cases, SWIFT transfers. While the term wire transfer is more heavily used in North America, it’s possible to hear about telegraphic transfers in the UK, Australia, and New Zealand.

Within the US, TT (or wire transfer) is most commonly used for international transfers and urgent or large domestic transfers due to its high speed and high transaction caps.

Almost all banks support domestic telegraphic transfers, while international payments are not as common. Here’s a list of selected banks along with services offered and respective fees.

There are a series of considerations before making any telegraphic or electronic funds transfer.

• Service availability: Check the ways in which you can arrange your transfer; it can be via the website, mobile app, over the phone, or by visiting your local branch in some cases.

• Limits: How much is your transfer? Transaction caps differ widely by the banking institution, so you may need to visit the help center or contact your bank if your transfer is fairly large.

• Cancellation policies: The SWIFT system allows reversals, but every banking institution holds its own policies on the matter. If it’s a risky transfer, you may want to read the fine print before you send out your payment.

• Cost: Every financial institution has its own fee structure regarding telegraphic transfers. Fees are deducted from the transfer amount, so it’s better to check prior to the transfer to avoid surprises and whether it is the cheapest way to send money.

• Speed: Domestic transfers are typically completed within the same day, if not within minutes. International transfers may take up to 4 days depending on the receiving country. You can check your bank's delivery times to specific countries or contact them for further help.

There is no real difference between telegraphic transfers and wire transfers. A telegraphic transfer is an outdated term to refer to funds moved between two accounts electronically, just as wire transfers. While wire transfer is used to refer to both domestic and international transfers, TT is more often used for the latter.

Electronic transfer, or electronic funds transfer (EFT), is another interchangeable name for telegraphic transfers. Both are umbrella terms referring to any moving of the funds via electronic means rather than sending checks or cash by mail.

While it wouldn’t be wrong to use it as such, telegraphic transfers are more often used to refer to wire transfers, specifically international payments.

Bank transfer, on the other hand, is another umbrella term that may be used for wire transfers, but it also includes other specific transfer types like ACH payments or direct deposits, which use different systems and serve different purposes.

CHAPS, Clearing House Automated Payment System, is a same-day bank-to-bank payment system largely used by UK banks. It is one of the systems through which telegraphic systems are run.

CHAPS allows for same-day delivery within the working day and poses no upper limits on transfers, with sums higher than GBP 10,000 being settled within minutes. Its rapid speed comes with a high cost as fees hover around GBP 25-30. It also has strict cut-off times; senders need to complete their transfers by 4.45 PM, and the system closes at 6 PM.

SWIFT is also another network through which telegraphic transfers are run. Society for Worldwide Interbank Financial Telecommunication was founded in 1979 in Belgium with the premise of becoming the main messaging network facilitating international transfers.

Today it serves around 200 countries, connecting over 11,000 banks globally. The system is overseen by the G10 central banks: Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, the United States, the United Kingdom, Sweden, and Switzerland.

Telegraphic transfers are secure and among the quickest forms of traditional remittance — but they may fall short in certain circumstances.