Telegraphic Transfer (TT): What It Is and How It's Processed

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.

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.

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.

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.