Telegraphic Transfer (TT)

What Is a Telegraphic Transfer (TT)?

A telegraphic transfer (TT) is an electronic method of transferring funds utilized primarily for overseas wire transactions. These transfers are used most commonly in reference to Clearing House Automated Payment System (CHAPS) transfers in the U.K. banking system. Telegraphic transfers are also known as telex transfers.

Key Takeaways

  • A telegraphic transfer is an electronic method of transferring funds, utilized primarily for overseas wire transactions.
  • Telegraphic transfers are used most commonly in reference to Clearing House Automated Payment System (CHAPS) transfers in the U.K. banking system.
  • Typically a telegraphic transfer is complete within two to four business days, depending on the origin and destination of the transfer, as well as any currency exchange requirements.
  • Telegraphic transfers are also known as telex transfers (TT) or more generically as wire transfers or electronic funds transfers.

Understanding a Telegraphic Transfer (TT)

Originally, as the name suggests, telegraphs were used to communicate the transfer between financial institutions. The sender went to their bank and provided the required data about the amount sent and the recipient. An operator at that bank would send a message to the recipient’s bank using Morse code. 

While the telegraph itself has become obsolete, the telegraphic transfer concept has remained—though it has evolved with changing technologies and uses secure cable networks to transfer funds. At times, the transfer mechanism may be referred to by the more general term "wire transfer," or by the more updated term "electronic funds transfer" (EFT).

Telegraphic transfers are usually fairly expensive due to the fast nature of the transaction. Generally, the telegraphic transfer is complete within two to four business days, depending on the origin and destination of the transfer, as well as any currency exchange requirements.

Funds sent between institutions are transferred through the Federal Reserve System for U.S. domestic transfers and the Society for Worldwide Interbank Financial Telecommunication (SWIFT) for international transfers.

SWIFT (the Society for Worldwide Interbank Financial Telecommunication) was launched in 1973. The system facilitated cross-border transfers between banks by introducing uniform standards, which made transactions less prone to error and able to move, yes, swiftly.

While the term can refer to both U.S. domestic and international transfers, TTs are most commonly associated with transfers through SWIFT. The use of these systems provides a level of security to the transaction as well as a set of standards and regulations to control how the transfers take place.

The cost associated with a telegraphic transfer can also be affected by these variables. Additional factors affecting the cost can include but are not limited to the amount being transferred and the institution chosen to complete the transaction.

Associated fees to complete the transfer are not standardized across all institutions and can thus vary dramatically from one institution to the next.

Special Considerations

Certain information regarding the sender and destination is required to complete the transfer. Whether a person transfers funds between two accounts that are both held in their name, or between two accounts held by two different individuals, the most pertinent information required for the transfer are the account numbers and information regarding the corresponding financial institutions.

Personally identifiable information is also required for security purposes and to confirm the identity of the sender. Similar requirements are required between business entities, but the identifiable information relates to the business instead of the individual.

Why Was It Called Telegraphic Transfer (TT)?

Originally, money transfers between financial institutions were literally accomplished over telegraph wires—the internet of their 19th-century day. Since the telegraph itself has become obsolete, the telegraphic transfer concept has evolved with changing technologies; now, funds move via cable networks or cloud-based apps.

What Are the Key Characteristics of a Telegraphic Transfer?

Telegraphic transfers provide a level of security as well as a set of standards and regulations to control how the transfers take place. Generally, the TT is complete within two to four business days, depending on the origin and destination of the transfer, as well as any currency exchange requirements. TTs are also usually fairly expensive—the price one pays for the rapid service.

How Are Telegraphic Transfers Processed?

TTs are used most commonly in reference to Clearing House Automated Payment System (CHAPS) transfers in the U.K. banking system. U.S. domestic transfers of funds sent between institutions are transferred through the Federal Reserve System while international transfers use the Society for Worldwide Interbank Financial Telecommunication (SWIFT).

What Information Is Needed for a Telegraphic Transfer (TT)?

The most pertinent information required for the telegraphic transfer is the account numbers and routing numbers of the parties and the financial institutions involved. Then there is the sum of money being transferred and the bank or non-bank transfer provider, such as

Western Union, which is chosen to actually carry out the transaction (though, strictly speaking, TTs are carried out between two banks and don't involve third parties). Other details may also be required for security purposes and to confirm the identity of the sender.

Article Sources

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  1. Society for Worldwide Interbank Financial Telecommunication. "SWIFT History." Accessed Oct. 21, 2021.