Do I Need a Special Wire Transfer Account?

Transferring money is fairly easy and convenient. The process has become so common that many people do not need any special accounts to send or receive funds. There are some instances, however, when a special wire transfer account may be necessary for a particular service. It may also be advisable for people subject to strict transfer regulations. Whether or not you need such an account will depend on your circumstances.

There are several ways to transfer money. People with bank accounts are generally equipped with everything they need. It is normally pointless for them to open a wire transfer account because they can conduct the same transactions from their existing accounts. Most banks have the capacity to facilitate incoming and outgoing electronic funds transfers (EFTs), including those that are international.

Even if a person does not have a bank account, she may not need a wire transfer account. Money can often be sent and received through wire services that operate on an as-needed basis. This means that an individual does not need to be an ongoing client. When the service is needed, the individual can simply visit a branch location, conduct the necessary transaction, and proceed.

There are a couple of exceptions, however. First, there are certain services that require users to open accounts. These services generally do not have physical locations or they only have a limited number of locations where users can go to conduct their transactions. Instead, transfers are done using the telephone or Internet and funds are withdrawn from or deposited into wire transfer accounts.

A second exception is when registration is required by law. Some countries are more strict about the transfer of money than others, especially when international transactions are involved. To enforce their regulations and provide a monitoring system, they may require the creation of a wire transfer account for anyone wishing to utilize such a service, even when that service is provided by a company based in a country without such restrictions. In many instances, such an account is not one where funds are stored, but rather a file that gathers and records information about the account holder's transactions.

The difficulty that is involved with international transfers in some countries may make it advisable for certain individuals to open a special wire transfer account. For example, in South Africa, a foreigner must meet special conditions and pay hefty fees to wire money outside of the country. Visitors or citizens from other countries who are in South Africa may have the need to regularly conduct transactions with parties outside of that country. In this instance, it is advisable to have a special wire transfer account set up outside of the country which will allow the individual to remotely conduct the necessary transactions without hindrance.