Not all online banks offer wire transfers, can complicate home buying

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  • On the morning I was supposed to close on my first home, I found out that the online bank where I’d saved my down payment didn’t offer outgoing wire transfers.
  • Because I didn’t have access to wires to transfer money instantly, I couldn’t get my cash to the title company that day, and it meant pushing back my closing. 
  • It turns out that my bank isn’t an outlier — many popular online banks don’t offer outgoing wire transfer services, which could be a big problem for home buyers.
  • If you’re using an online bank to save for your down payment, plan ahead. Make sure you can make a wire transfer, or make a plan in advance to move your down payment to a bank that can.
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When I started thinking about buying a home, I opened a high-yield savings account to save for it, and I chose an online bank. 

About a year later, I found the house I was looking for, made an offer on it, had that offer accepted, and set up a date for the closing.

The morning of the planned closing, I intended to wire the money to the title company — a pretty typical part of home buying, and required in my state for an amount of money the size of a down payment. I had the information I needed to send it, and I pulled up my account to get the wire started.

But, I couldn’t find a way to do it on my online bank’s website. After some looking, one line on the bank’s frequently asked questions page stopped both me and my closing agent in our tracks: ‘Outgoing wire transfers are not available.’

I called the bank, but the only other solutions took days

I’d never even thought about needing to make a wire transfer before my home purchase. I didn’t think I needed to look in advance to make sure the bank offered them, either —I just assumed all banks did. But, you know what they say about assumptions. 

I was panicked. I called the customer service line. One representative said the best he could do would be to mail me a paper check. This was Wednesday, and the earliest that check would arrive would be Saturday. It would mean pushing my closing until the next week, and moving my move-in date to the next weekend. There had to be a better way. 

Another call to the online bank later in the day had me talking to a different customer service representative; he had another idea. He could increase my daily transfer limits to $20,000, the set up ACH transfers to move the full balance to my checking account over three days. Then, I could set up the wire Friday morning (from my checking account), and close that afternoon in time for the weekend, if everything went to plan.

But, it still meant moving my closing from Wednesday to Friday.

If you’re planning on buying a house with funds from a high-yield savings account, plan ahead

I had no clue how important wiring would be when I started looking for a high-yield savings account to save for a down payment. Had I known, I would have considered it. Or, I would have planned ahead and transferred the money to a bank that offered wires sooner. Having this service available would have saved me, the home’s seller, and the title company a massive headache and a cancelled closing.

Caught up in feeling dumb for not knowing about this,  I did some research. I found that my online bank wasn’t an outlier. There are quite a few online banks that don’t have outgoing wire transfers available — including a few on our list of top picks for high-yield savings accounts this year.

To be clear, online banks are still leaps and bounds above the brick-and-mortar competition for savers. Online banks, on average, have much higher interest rates, and in my opinion, better online experiences and apps. And, don’t get me wrong, high-yield savings accounts are still a great place to save for a down payment. But wire transfers are a pretty important and common step in the home-buying process, and I found out a bit too late that some online banks fall short in offering this service.

Avoid the surprise I had on closing day and plan ahead. Get clear instructions from your lender and title company in advance about how you’re expected to transfer the funds — rules vary by state. Look into whether or not your bank has wire transfers available, or can transfer your money the way your lender requires. And if you need to move the money, do it well in advance. 

While everything worked out in the end, it would have been a much simpler process if the bank offered this service, or if I had known I’d needed it. 

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