Sending money overseas used to be a lengthy and costly process. If you take the time to consider all of your alternatives before moving ahead with your transfers, you won’t have to worry about anything. You can reduce international money transfer fees using reputable banks or third-party companies.
An international bank transfer is a monetary transaction between two financial institutions in different countries. It works the same as an international wire transfer would. You can also use a money transfer firm as an alternative. Many kinds of networks are available for money transfers.
This guide will discuss, in detail, the various international transfer service providers and explain when you would want to use each one.
How To Send Money Internationally From Canada?
The term remittance refers to paying money to a recipient in another nation. A Canadian company or bank sends information about a transaction to a person or business in another country. This person or business could be an agent, another company, or another bank. The recipient receives the funds from the agency, business, or bank you use.
The primary factors that determine the most efficient method of international money transfer are:
- To whom and how much money are you sending
- The origin and destination currency pairs
- In what time frame do you need the funds
- Specialized Online Cash Transfer Service
Using a Specialized Online Cash Transfer Service is usually the best option when moving a few thousand dollars or less worldwide. Online cash transfer services are provided by companies that are often FinTechs that have been established to compete with more conventional financial services, organizations, and techniques.
Most cash transfer companies operate exclusively online, with all business conducted via their websites or mobile applications. Although there are several competitors, the market leader is currently Wise. It’s often the least expensive online cash transfer service provider.
Be careful to examine the rates you are being charged, even though this is a very straightforward operation. A little research goes a long way toward ensuring that your international money transfers are as cost-effective as possible.
Standard Banks
Your bank can send money to another country on your behalf, and depending on your different accounts, this may be a relatively inexpensive option to carry out such a transaction. If you have an account with the same bank in both countries, you may be eligible for more favourable exchange rates when transferring money overseas between your accounts.
The costs may only be low if you have one of their premium bank accounts, but it’s still worth checking out. For instance, If you have a premier or advance account with HSBC in Canada, you may use your online banking to make free transfers to other HSBC accounts in more than 30 countries.
If the transfer takes significantly longer than anticipated, you shouldn’t hesitate to visit a bank branch and ask what’s happening.
Brokers of Foreign Exchange
When you need to send significant quantities of money worldwide, such as when you are buying or selling a property, the best choice to go for is often to work with a foreign currency broker. The majority of them won’t charge you any fees, and virtually all of them will give you better rates than what your current bank can do.
They provide a personalized service that may assist with various things, including determining the appropriate timing for currency exchanges and simply helping you through the process.
It would be best to devote significant time searching for the ideal broker. Given the amount of money being dealt with, even a slight variation in the interest rate or the charge might significantly impact how much you get.
Third-Party Money Transfer Option
Transferring money across borders used to be a time-consuming and costly endeavour. The good news is things have changed, and it no longer has to be this way. To make an international money transfer easy and reasonable, you can turn to trustworthy banks and third parties.
Following are some of the alternative options you can consider:
Wise
Wise, previously known as TransferWise, uses peer-to-peer technology to make international money transfers cheap and easy. Through peer-to-peer technology and eliminating unnecessary fees, Wise provides a convenient and low-cost option for international money transfers. Over 30,000 users have reviewed it on Trustpilot, giving it an average score of 9.5 out of 10.
Withdrawals to Canada cost 0.45% and take two business days to process. Wise has earned the respect of its clients. Wise is reliable since it is regulated and approved by the Financial Conduct Authority in the United Kingdom and is subject to European Union consumer protection laws.
CurrencyFair
When you need to send money internationally from Canada, CurrencyFair is another simple and low-cost option. You may get up-to-the-minute exchange rates for Canadian dollars using the calculator featured on their webpage. Canadian banks no longer charge for accepting CAD transfers. It is a secure platform that adheres to all regulations.
Transfers should be completed on time to guarantee they are processed the same day. There is a fixed cost of $4 for each international money transfer to Canada. Your bank may charge you a domestic wiring fee if you want to send money abroad from Canada.
Western Union
Money may be sent from one person to another via the third-party Western Union, which offers competitive rates and cheap transfer costs. You can transfer cash between your accounts in other countries via third-party organizations like Western Union. These companies facilitate the movement of money from one nation to another.
Other Banks
Transferring funds from your local bank account to your Canadian bank account via a third party, such as Western Union or PayPal, is another option for international money transfers. If you need to send money abroad quickly, you may use either PayPal or Western Union, but you should compare their prices to see which one provides the better deal.
Steps on Sending Money Overseas Using an Online Specialist
You will typically need these procedures to send money to another country. You may receive an email or SMS when the transaction is complete. You can save transaction details to make future transfers easier. However, the specific process may change depending on your service provider.
1. Create a Profile
Making a profile is often free. Your name, address, date of birth, and Social Security number will be required information. If you want to send a sizable sum, your service provider may need you to verify your identity by uploading a scan of a government-issued ID.
2. Enter the Details of Your Addressee
If the recipient needs to provide identification to accept the transfer, include their full legal name as it appears on their ID. You also need to have their contact details. You’ll need the recipient’s bank account number, bank name, and SWIFT code to make a direct transfer to a bank account.
3. Enter the Transfer’s Specifics
Type in the amount you wish to send, the recipient’s country and currency, the preferred method of receiving payments, and your payment information. Remember that your sending and receiving choices may change depending on your provider.
4. Review Your Transaction’s Specifics
Typically, your service provider will give you a transfer summary. Know the fees, currency rate, and final amount your receiver will get. If you see an error, please make the appropriate corrections.
5. Make a Payment
Credit cards, debit cards, bank transfers, cash, and even mobile wallet transfers may all be accepted depending on the business.
6. Monitor the Transaction
You should expect to get a confirmation number or a tracking number once payment has been received. With this number, you can check the status of your transfer online or at an agent’s location. This number may also be required for your receiver to receive the funds.
Most Effective Method for Sending Money Abroad
If you want to send money overseas in the most effective manner, make sure you follow these guidelines:
Understand the Currency Rate Being Provided
Companies routinely utilize currency rates that differ significantly from the actual exchange rate found by a Google search. The money transfer companies may add a margin to the mid-market exchange rate to make a profit. This hidden money transfer cost is often not included in the quoted amount.
Don’t Let Costs Deter You
There may be a flat fee, a percentage of the total money transferred, or both. Some service providers might not even charge you anything, despite their claims to the contrary. But don’t let that meaningless phrase fool you. Simply because they don’t charge fees doesn’t mean they’re the cheapest option.
What’s very important is knowing the total amount of costs plus the exchange rate. It is the only way to know for sure what the cheapest option is for sending money abroad. Don’t be fooled by the marketing. These companies have to turn a profit somewhere, and they’ll do it by charging you fees or a margin on the exchange rate.
Therefore, the only reliable method of determining which transfer company offers the best rates is to begin a transfer with each company and compare the final quotation for how much money you will get in the target currency.
Know When the Money Will Arrive
The time the receiver gets the money varies depending on the service provider and the currency used. The speed with which funds reach their intended recipient might change since the costs charged by some service providers vary with the chosen payment method. Therefore, it is important to consider the required time while comparing prices.
Exercise Due Diligence
If you want to send money abroad, you’ll have to provide your cash to the bank or other financial organization that will convert it. This money might amount to a substantial sum. So, it is essential to investigate the company’s security measures to ensure your funds will be safe.
Inquire whether or not the company has been granted permission to operate by a reputable country’s financial regulator. If a licensed business fails, your money will be safe because it will be kept in a client trust account that is kept entirely separate from the business’s operating cash.
The Next Time May Not Be as Affordable as the First Time
The most cost-effective strategy for making an international money transfer may change depending on the circumstances. Don’t assume that just because the company you discovered for your first overseas transfer was affordable, they will always be the cheapest option.
An online currency transfer expert is likely your least expensive option for moving anything from a few hundred dollars to tens of thousands worldwide. However, using a specialized foreign exchange broker might be less costly if you want to transfer a substantial amount of money.
Your bank may provide a higher exchange rate when converting dollars to rupees, while an online currency transfer expert may be your best choice for sending pounds.
Compare All of Your Alternatives
For the most cost-effective international money transfer, examine your alternatives simultaneously rather than spreading them out over several days. Because currency rates constantly change, the amount you are expected to get might also change. When comparing different firms, you need to make sure you’re using the same metrics for each.
User Experience Is More Crucial Than You Might Realize
This one may seem unimportant, but if you need to send or receive money more than once, you’ll want the procedure to be as simple and quick as possible, especially when there is a possibility that there is little to no price difference between service providers.
See What Other Customers Have To Say
See what other customers have to say on review sites like Trustpilot. It is a helpful tool in getting you to feel safe and secure sending them money.
Use Your Other Financial Instruments to Their Full Potential
Making fee-free international wire transfers between accounts at some financial institutions is possible. In many cases, this is only available to customers with premium accounts, who maintain a certain monthly fee.
But if you need a bank account anyhow, make frequent foreign transfers, and like the premium account’s additional features, this may be an excellent choice. However, you should be aware that the bank’s exchange rate may not be the best option, making fee-free transfers less attractive than they otherwise would be.
Look for Promotions for New Clients
Companies, especially those specializing in online money transfers, often provide bonuses to attract new consumers. Such as a discount on your initial transfer or a set number of free transfer attempts. The deal may make this firm the most excellent alternative, even if their regular exchange rates or costs are not the absolute lowest.
How To Reduce the Cost of Sending Money Abroad From Canada
Costs can be very different when sending money abroad from Canada. Often, specialist providers are cheaper than banks and have better exchange rates. Fees and exchange rates significantly affect how much it costs to send money abroad.
Why a Competitive Exchange Rate Is Necessary
The value of one currency expressed in terms of another currency is referred to as the exchange rate. Although technically, exchange rates fluctuate every second, banks and other businesses that transfer money may only update their rates once per day, once per hour, or maybe more frequently.
A mid-market rate is the exchange rate between two currencies. If the average market exchange rate for Canadian dollars to US dollars is 0.80, then one Canadian dollar is equivalent
to 0.80 US dollars.
A bank or money transfer service will charge a fee equal to a modest percentage of the mid-market rate to turn a profit. Therefore, if the mid-market rate for exchanging Canadian dollars into US dollars is 0.80, you may be given a rate of 0.76. Thus, the person you send money to will receive USD$0.76, while the bank or money transfer agency will keep the remaining $0.04.
It may not seem like much, but even a loss of a few cents per dollar may quickly mount up. You pay more fees as the exchange rate decreases, and the beneficiary receives less. If the exchange rate is favorable, more of your money will reach your intended recipient. Typically, companies specializing in money transfers provide rates more consistent with the mid-market rate than banks.
How Transfer Fees Impact Your Overall Spending
Transfer fees can range from a few dollars to $80 or more, with some firms collecting even more by charging a percentage fee rather than a flat fee for their services.
Your transaction fee could be calculated using any one of the following methods, depending on the service you use:
- Flat-fee charge – It is a one-time charge that does not change based on the total amount of money sent.
- Tiered pricing structure – A tiered pricing structure is one in which the flat cost changes based on how much money you send. For example, $5 for sending up to $500, $10 for sending between $500 and $1,000, etc.
- Percentage charge – A fee is calculated as a proportion of the total money being transferred, referred to as a percentage fee.
- Free of charge– Free of charge for any amount beyond a specific amount.
Take into consideration the possibility of additional charges. For instance, a money transfer provider may charge your receiver a fee if they cash a bank check or pick up cash in person rather than get the funds by direct deposit.
Check Out How to Send Money From Canada To Other Countries
FAQs
Can I Deposit 100k Cash?
If you wish to transfer a significant amount of money, such as 100k, you may save money by working with a foreign exchange broker specializing in the field. The maximum amount you can send through bank wire in one day per customer is $100,000. So, you could also do a wire transfer.
Banks and money transfer services, rather than individual customers, are responsible for reporting any movement of more than $10,000 to FINTRAC. Regardless of the dollar amount involved, financial institutions must report any suspicious transactions they see.
Do you Pay Tax on Money Sent Overseas?
Money transfers may or may not be subject to taxation depending on several factors, including but not limited to the recipient’s nationality, residency, the destination country’s tax rules, the recipient’s rationale for receiving overseas payments, and the amount received. Consulting a professional accountant or tax expert is the best approach.
Because there is no gift tax in Canada, sending money to a friend or loved one who lives there is pretty simple. Transfers of more than $10,000 may be required to be reported to the Canada Revenue Agency (CRA), but your receiver won’t have to bother about filling out any paperwork.
Is PayPal Free in Canada?
Transferring funds to a Canadian bank account or PayPal balance is free. Using the PayPal mobile app, international money transfers are quick and straightforward. Using the wallet feature, you can more easily keep tabs on all of your PayPal dealings.
Donating money, making a purchase, or paying for any other commercial transaction using PayPal is free, except for any fees associated with currency conversion.
How much does PayPal Charge for International Payments?
There are two options for sending money internationally with PayPal, each with its cost schedule. In the case of direct transfers between PayPal accounts, PayPal applies a 5% fee, with a minimum charge of $0.99 and a maximum charge of $4.99. Funding fees of 2.9% plus a fixed amount are applied if the transfer is financed by a credit card, debit card, or PayPal credit.
If the sender has to convert to a foreign currency before sending, the cost is 4% or another proportion announced during the transaction. PayPal charges 3.5% to convert US or Canadian dollars but 4% for foreign currencies. PayPal levies a 4.5% fee for currency conversions, so consider that.
Final Thoughts
Various methods are available for sending money overseas, including traditional banking institutions, online transfer services, in-person cash transfers, and popular apps such as PayPal. Always compare different service providers’ fees, exchange rates, and transfer options before deciding on one to use to ensure you get the best possible deal to suit your requirements.
Sending money to someone in another country in Canadian dollars and letting them convert it to their currency may not always be the most expensive option. They may be offered a more favorable exchange rate and reduced service fees.