A Telegraphic Transfer (TT) is an electronic method of transferring funds from one bank account to another. It’s also known as a wire transfer or bank transfer. A TT allows the transfer of money from one bank account to another bank account, either within the same country or between different countries. They are commonly used for international transactions, as they offer a secure and reliable way to transfer large sums of money quickly and efficiently
Suppose Rahul wants to transfer Rs. 5,000 to his friend Shobhit, who lives in another country. Rahul visits his local bank and requests a Telegraphic Transfer of Rs 5,000 to Shobhit’s bank account. Rahul provides his bank with the following information:
Rahul’s bank processes the transfer and sends the funds electronically to Shobhit’s bank account. The transfer typically takes one to three business days to complete, depending on the countries involved and the banks’ processing times.
Once the transfer is complete, Shobhit’s bank credits the Rs 5,000 to his account.
Telegraphic transfers involve sending money from one bank to another and then passing it on to the intended recipient.
Because the banks that are participating in the transfer, commonly referred to as correspondent banks, set their own prices and processing periods, telegraphic transfers are typically more expensive than other transfer services. Due to this, transferring money between people and businesses can be expensive and time-consuming. The processing period for a transfer is typically 2-4 days.
Payments can only be sent between banks that have business contacts with one another. Hence this network is crucial.
Telegraphic transfer mostly take 3-4 business day to reach the recipient banks, but it also varies to country to country depending on the origin and destination of the transfer as well as the currency exchange requirements.
TT payments are generally expensive because there are multiple fees associated with a single transaction, including those assessed by the bank handling the transfer, correspondent banks acting as intermediaries as your money travels across borders via the SWIFT network, a currency spread or markup added to the exchange rate, and fees assessed to the recipient by their bank. Also, keep in mind that the teleraphic transfer buying rate differs based on the currency.
The amount of time necessary to complete a Telegraphic Transfer, just like the fees, varies depending on whether the transfer is conducted using CHAPS or SWIFT.
The time it takes to complete a CHAPS money transfer might range from a few seconds to as long as two hours, depending on the circumstances. As a result, it is utilised in circumstances in which there is a race against the time in a domestic transaction.
As mentioned, completing a telegraphic transfer via this technique often takes anywhere from two to four days, this happens because a SWIFT transfer is more involved and may have to travel through more than one bank.
You can always approach your bank with the transaction reference number if there is a delay or a problem. As soon as a wire transfer transaction is started, the sending bank gives the sender a transaction reference number. Financial institutions can use this reference number to check the transaction’s status.
Remittances sent across international borders are subject to several rules and limitations. Banks carry out their own due diligence as well. Telegraphic transfers make it possible for you to send money to India successfully, conveniently, and with little hassle.
|Telegraphic Transfer||Bank Transfer|
|A telegraphic transfer is a means to move money electronically via the financial system from one bank account to another..||A bank transfer is a form of payment or transfer to someone’s account that is carried out through a bank.|
|Telegraphic transfers are mostly for international transactions||Bank transfers are mostly for domestic transactions|
|Expensive and takes longer time||Inexpensive and faster|
Convenient: The only thing you need to do for making a telegraphic transfer is to use the services of your bank. This makes telegraphic transfers quite convenient. You can even start the transfer from your bank’s browser or the app.
Risk-free: Telegraphic transfers are a dependable and risk-free method of moving money from one party to another. Even the transfer of significant sums of money can be done in a secure manner.
High limitations: In contrast to other methods of transmitting money, like payments in cash, telegraphic transfers are the most appropriate means to move vast quantities of money and have high limits because of their capacity to accommodate such transactions.
Since the payments move through many banks, the sender may wind up paying significant costs in the form of exchange rate margins, landing fees, and other expenses.
The major disadvantage is that processing payments, that can take some time. Payments may occasionally need to pass through many banks before they reach their receiver, especially with overseas transfers, which might cause delays.
A Telegraphic Transfer is a safe and reliable way to send money or receive large amounts of money within India or abroad. Before you make the tt payment, it is safe to verify with your bank about TT payment terms and other concerns.
Money transfers are unlike parcel deliveries, where you can follow the approximate position of your delivery. You can also request a trace through your bank with a bit of additional work. They’ll only notify you if the money has been deposited. You’ll need your 16-20-digit Federal Reference number. SWIFT’s latest cross-border payment technology (SWIFT GPI) allows you to track your payment at any time. Track your payments end-to-end in real-time on the SWIFT website.
Due to the fact that this method of transferring money operates on an electronic level, it is one of the safest ways to send money. You will have a simpler time tracking it and knowing how much cash is transferred as well as when you can expect to receive it. Additionally, you are able to start a TT at any time and in any location.
A telegraphic transfer, also known as a TT, is typically the quickest option when sending money to a foreign country. In most cases, the delivery will reach the beneficiary within one to two business days. However, because of the interconnected nature of the banks, there are no guarantees. It is more cost-effective to send a TT in the recipient’s currency. It eliminates the need for days to be spent converting or clearing funds, which results in rapid crediting of cash.
Although the specific processes differ from bank to bank, the telegraphic money transfer procedure is generally the same. The steps you must take to make a payment are as follows:
• Check your bank’s website to see if you can perform telegraphic transfers online. You should be able to do this by phoning your bank or visiting their website.
• Log in to your bank account to access the section for telegraphic money transfers if your bank permits you to make this form of payment online. This might be referred to as a “wire transfer,” a “telegraphic money transfer,” or some such word. Visit your local branch if your bank does not let you make this kind of payment online.
• Examine the costs and conversion rate before sending. Telegraphic money transfers necessitate sending funds through matching banks, which may not always be the same as your own. Although you may be aware of your bank’s fees, keep in mind that you can also be liable for the relevant bank fees. A good moment to check the currency rate is now.
• Specify the relevant details: Give your recipient’s name and, if necessary, their address. Additionally, you’ll need their basic financial information, like a SWIFT or BIC code.
Telegraphic Transger is the full form of TT in banking.
This article is solely for educational purposes. Navi doesn't take any responsibility for the information or claims made in the blog.
What is Issuer Identification Number (IIN)- Working and ImportanceWhat is an Issuer Identification Number (IIN)? Banks and financial institutions assign a distinc... Read More »
What is a Vostro Account – Meaning, Working and DifferenceWhat is a Vostro Account? A Vostro account is a bank account held by a domestic bank on behalf o... Read More »
What is a Solvency Certificate? – Format, Documents Required & How to Apply Online?What is a Solvency Certificate? A solvency certificate is a legal document furnishing the detail... Read More »
What is Merchant Banking – Services, Features, Functions and ExampleWhat is Merchant Banking? Merchant banking is a set of select banking and financial services off... Read More »
Automated Clearing House: Objectives, Types and ProcessAutomated Clearing House is an electronic fund transfer network that manages automatic and direct... Read More »
What is Electronic Clearing Service (ECS) in Banking and How does it Work?What is Electronic Clearing Service (ECS)? Electronic Clearing Service (ECS) is a method of elec... Read More »
What are Credit Card Validators and How to Use them?What is a Credit Card Validator? A credit card validator is a tool that checks the validity of a... Read More »
What are Prepaid Expenses? – Definition, Examples, and Journal EntryPrepaid expenses represent payments made in advance for products or services expected to be incurre... Read More »