The time might come when you need to make a foreign currency transfer from Canada to another country around the world. Perhaps you need to make a transfer from Canada to the US for a family member. Either that, or it’s one of those scenarios in which you’re making a large purchase overseas and would like to make a currency transfer from Canada to Australia.
Whatever the reason, you’ll have the choice on who you want to make your Canadian international wires with; either some of the largest Canadian banks, a Canadian online bank, or specialist international money transfer companies in Canada. These transfer services are now offering the service cheaper with the added bonus of multiple products and hedging capabilities that can drastically improve the exchange rate you achieve.
Our focus is on transferring large amount of money to Canada from the UK, USA, Australia and the EU (including countries such as Italy, Germany or Spain) as well as sending money from Canada to make international wire transfers such as overseas purchases and foreign investments. Typically, they are bank-to-bank transfers that move from one bank account to another but you can exchange your own funds too.
In this article, we’ll determine Canada’s best money transfer services available today, the different products they have to make a foreign currency transfer from Canada and explain if it’s possible to transfer money from Canada to the US for cheap. You will learn how to get the best CAD exchange rates from some of the best money transfer companies in Canada.
Canadian Bank International Wire Transfer Fees & Spreads
|RBC – Royal Bank of Canada||2.60%||RBC Exchange Rates|
|TD – Toronto Dominion Bank||2.64%||TD Bank Exchange Rates|
|BMO – Bank of Montreal||2.65%||BMO Exchange Rates|
|CIBC – CIBC Bank||3.34%||CIBC Foreign Exchange Rates|
|Scotia – Scotia Bank||2.88%||Scotia Bank Foreign Exchange Rates|
|HSBC – HSBC Bank||2.10%||HSBC Foreign Exchange Rates|
|Desjardins||2.49%||Desjardins Foreign Exchange Rates|
Source: https://www.knightsbridgefx.com/comparefxrates/, on 21/09/2020.
*Calculated on buying $10,000 USD.
What we can see here, is that out of the leading Canadian banks, HSBC offers the most competitive spreads on international wire transfers from Canada at 2.1% when customers are looking to buy $10,000 USD. The most expensive bank to buy the same amount ($10,000 USD), is easily CIBC bank who charges a 3.34% markup. In all cases, the banks charge a higher markup than specialist money transfer services would for payment of the same size.
If we use the money transfer firm WorldFirst as an example, who offer fee-free international payments for private clients, then we can get a feel for the amount you could save compared to using a bank. If you made just one transfer of $10,000 USD, you would be charged a markup of 0.5%.
A significant saving on even the cheapest bank markup of 2.1% and huge savings when compared to the most costly FX providers. It’s easy to understand how important the spread markup is, especially when you have to make larger international wires from Canada.
Neither Currencies Direct or WorldFirst charge international wire fees when you make a money transfer from CAD to any other country. Wise does, but it’s always one of the lowest fees out there and is largely driven by its completely transparent aim to offer one of the lowest exchange rate markup available – this makes Wise particularly good for low-value international money transfers from Canada. Uniquely for a bank, HSBC also offers fee-free international payments providing there is an FX conversion, however, the payment has to be under $10,000 CAD.
Let’s look at a completely superficial scenario to see what kind of savings you could make by opting for a money transfer service in Canada. Let’s assume you found an attractive bungalow near Fort Myers, Florida you wanted to buy. To purchase it, you need to move 10,000 USD for the down payment. According to Royal Bank at 1:18 am GMT on April 1, they had a CAD/USD rate of 1.3627. At this price, you’d need to come up with 13,627 CAD. However, you could get a much better rate through an online money transfer provider. On internationalmoneytransfers.org, the worst rate offered by money transfer services operating in Canada was 1.3300 – this means you could buy 10,000 USD for 13,300 CAD.
We will introduce you to three money transfer services in more detail – one charges flexible currency rate margins (Currencies Direct) and the other two have a fixed payment structure so you can clearly understand the rate you’ll be charged (WorldFirst and Wise). In most cases, customers who need to make sizable or regular currency transfers prefer the former option of Currencies Direct as they can negotiate a bespoke fee structure, based on the amount of money they are sending. Whilst customers who need to make a one-off or less frequent Canadian currency transfers may prefer one of WorldFirst or Wise.
Our Top 3 Money Transfer Companies for Canada Transfers
The Guide’s Topics:
- Most Popular Reasons to Move Funds into Canada
Cheapest Way to Send Money to Canada
For low-value transfers, it would appear WorldFirst offers the lowest available spread that is immediately applied to your trading account. At 0.5% it’s very fair and will only improve should you trade enough volume throughout the year to 0.25% and even 0.15%. You will find rates under 0.5% on other Wise currency corridors, such as GBPUSD, but for CAD payments they come out a touch more expensive than WorldFirst.
You should certainly not disregard Currencies Direct on its price at this point though. For larger payments Currencies Direct can certainly beat other money transfer services in Canada. In addition to a tight margin, you will also receive all of the benefits of a more tailored currency service. They can provide an update on the currency markets and what might influence the exchange rate for your currency pair in the future, which can drastically improve the rate you ultimately achieve.
Through our earlier example, we showed that with internationalmoneytransfers.org, the worst rate offered by money transfer services operating in Canada was 1.3300 – this means you could buy 10,000 USD for 13,300 CAD. The cheapest way to send money to Canada is definitely by going online and selecting a specialist international money transfer provider. The provider you choose will depend on your own personal or business requirements but each of these firms has unique solutions depending on your international transfer requirements. With savings of more than 300 CAD that’s enough to upgrade to business class on your next flight down south!
Cheaper Rates in Canada due to Increased Competition
The Canadian personal finance ecosystem is also on an uprise. Companies like Simplii Financial and EQ bank, are online-only Canadian banks, that are taking a massive market share off its competitors. The Canadian market appears to be riper than ever before to use alternatives to big banks and as the competition increases, the rates provided to clients are getting better for international money transfers. Interestingly the service by EQ bank is actually powered by Wise money transfers, so you know you have a trusted provider behind it.
Why Send Money To A Canadian Bank Account
There are a whole host of reasons you may be looking to make a foreign currency transfer from / to Canada. And depending on whether you’re looking to make an international wire transfer from US to Canada for a house purchase or send a small international wire from Canada to the UK for a family member, it can impact the money transfer service that you would need. Some money transfer providers are better in certain locations and sometimes their products are simply the correct solution for what their client needs.
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Sending Money to Friends and Family
When you’re making regular smaller payments – under $10,000 CAD for example – then usually you would find Wise to be the best option for this but in this case, WorldFirst is a touch cheaper. With Wise you’ll only be able to trade ‘on the spot’ so it perhaps makes WorldFirst the better option as you can access forward contracts and limit orders. Products both offered by Currencies Direct as well.
Solution – WorldFirst or Wise
Wise is almost always the best option for this. More specifically it’s the TransferWise borderless account you’ll need. Registering for a TransferWise borderless account provides you with local currency accounts that you can include on your invoice for your clients to pay into. You then have the flexibility to hold balances in different currencies, make and receive local payments in a wide number of countries, and convert funds back to CAD whenever you wish. World First’s World Account works in the same fashion too – it’s particularly beneficial for the repatriation of overseas income for online sellers who sell on marketplaces internationally.
Solution –WorldFirst or Wise
If you’re a business trading internationally then a tailored hedging strategy should be implemented. Being able to understand your upcoming costs and reducing exposure to the FX markets is important if you import your stock from overseas. By working with Currencies Direct, businesses are assigned a designated account manager who will get to know you and understand your business requirements. You can choose to completely hedge trades or find solutions that can provide flexibility on the rate you want to achieve. An FX expert from Currencies Direct can provide their view on the markets and the FX solutions that are appropriate to your business.
Solution – Currencies Direct
Buying a Property Overseas
If you’re making a large currency transfer from or to Canada then timing of your transfer could have a more significant impact then the fees charged by the money transfer provider. By speaking to a currency expert at Currencies Direct, or even WorldFirst, then both of these firms offer products such as forward contracts – allowing you to guarantee today’s exchange rate for up to two years. Timing when you agree to your forward contract and you’ll see you can have very different exchange rates one week or even day to the next. The fact you can access a dedicated currency expert which you can’t with your bank account provider is something to factor in too.
Solution – Currencies Direct
Information for Expats Relocating to Canada
If you consider moving into Canada and live there as an expat, you may find the following information helpful.
Advantages Of Moving To Canada:
- Low Unemployment Rate: Canada has a 7.2% unemployment rate.
- High Salary: Average household earns 28,194 USD per year.
- Good Work-life Balance: Canadians work on average 1,702 hours per year, which is 74 hours below the OECD average.
Disadvantages Of Moving To Canada:
- High Taxes: Ranging 20 – 30% of the paycheck.
- High Cost of Living: two-bedroom apartment on average costs 1,800 GBP.
- High Education Costs: Average university fees are 10,000 GBP per year.
Popular Destinations in Canada
Popular cities for business and real estate transactions from abroad, in Canada: Toronto, Montreal, Calgary, Ottawa, Edmonton, Mississauga, North York, Winnipeg, Vancouver, and Scarborough.