Did you know Canadian banks take a healthy cut when you transfer money overseas?
I know we are a polite bunch here in Canada, but as Canadians I like to think we are reasonably smart. Well if that’s the case, it is time for Canadians to discover a better way to transfer money overseas.
Well it is no longer smart to use banks for money transfers: dedicated foreign exchange companies are the best way to move your money between countries. Right now, most Canadians who need to transfer money internationally run straight down to the local bank or go online and plop their money on the counter, thinking nothing more of it because they’re confident the money will get where it needs to be – and it will, no doubt.
It is certainly true that banks are established and highly regulated institutions and international money transfers made using a bank will deliver the funds to an account in another country…but exactly how much of it will get there?
|Service Name||Minimum Amount ($CAD)||Phone/ Online Service||Locations||Fees + Conditions||Special Offers/ Reviews||Transferring $5000 to USA (see *Note)|
|My Bank In Canada||None||Branch Only Over $2500||Canada||$20 - $45||None||$4,330*|
|OFX||$250||Online/ Phone||Canada, UK, Australia, US, NZ, Hong Kong||Under $10,000 it is $15. See Offers >>||No Fees if you Register through Transumo||4,541.08*|
|TransferWise||$0||Online/ Phone Troubleshooting||Online focus. 59 Supported Countries Including AUS, CAN, UK and US||Fees depend on route (eg. AUD>USD is 0.7%)||Transferwise - Full Review||4,563.78*|
|XE - Full Review||$0||Online/ Phone Troubleshooting||Online focus. Transfer in 60 currencies to over 170 countries. US, UK, CAN||A small fee for low value transfers||Fee free transactions||TBA|
|WorldRemit - Full Review||$1||Online/Phone||UK, US, Canada, Australia, NZ, Japan||Ranges from $3.99 to $24.99||Start by choosing the country you are sending to|
|Currencies Direct - Full Review||$100||Phone + Online||US, UK, Europe, South Africa||No fees||Click to get exchange rate||TBA|
Click here for a review of OFX formerly CanadianForex
As you can see as far as exchange rates and fees go, the difference between CanadianForex V World First is minimal but they are far better options then using a bank. A fee here and there may not seem like much, but when you include the exchange rate they offer, the sum of your losses can be staggering. Consider the fact that banks charge both on the sending, and receiving end, a transfer fee of $40 or more for a single transaction, then factor in that a bank has little reason to offer its customers competitive exchange rates on international transfers, and you begin to see precisely how much money can evaporate when your money takes a trip overseas.
If you’re as tired as I was of being taken advantage of by the banks, you’ll be happy to know there is definitely a better way to transfer funds from country to country: using a money transfer company. This rapidly expanding marketplace has created an entire industry dedicated to providing customers an alternative to using banks for international transfers.
CanadianForex, an arm of international financial institution OzForex, is the first government authorized foreign exchange company based in Canada, and in more than a decade of service to Canucks coast to coast as well as abroad. These guys have saved Canadians individuals, entrepreneurs, backpackers, ex-pats and businesses large and small an incredible amount of money.
For example, when I moved to Canada from Australia in 2006 I used CanadianForex to move my life savings to buy a house in Toronto saving thousands over using my bank in Australia. That’s a lot of double doubles or two-fours, whatever you prefer.
But I am not here to favour CanadianForex’s in fact there are other foreign exchange companies like WorldFirst and TorFx which are emerging as strong competition, meaning there is simply no reason to flush your money down the tubes by giving it to Canadian banks.
To help make it even easier for people I have written a PDF titled the 3 Secrets to Transfer Money Overseas – one of the secrets I give is to shop around, but all three are big players worldwide and will easily save you a bundle of money over the banks.
Personally my preference is to use a company with an office in the country where I am a resident. This is because of security (regulated in Canada) and service (a Canadian who picks up the phone) but for those who want to shop around and transfer a large amount of money in one go or even to simply send money on a regular basis, there are four central factors involved in choosing the best service for your needs:
These are Security, Speed, Accessibility and Portability, and each of them combine to ensure the best money transfer experience. The high rating of these established foreign exchange companies in each of these aspects is the reason they have become the choice of Canadians in recent years.
When you’re transacting thousands of dollars across thousands of miles, the number one thing you want to be sure of is whether it will reach its destination successfully. Money Transfer companies like CanadianForex have a stringent system of regulation that they must adhere to in order to operate in the country, and even in the in the international money transfer market, there are still relatively few companies in Canada that offer these services because the industry is careful regulated by the Canadian Securities and Investment Commission, as well as FINTRAC, the country’s anti-money laundering and financial counterterrorism agency. They also have to meet many financial regulations in any country to which they operate a physical presence.
The list of regulations and restrictions on these businesses is exhaustive and technical, but suffice it to say it is extremely difficult to open such a business. As a result, those who run these companies know your security is their very survival, and what means a delay in proliferation for potential foreign exchange business owners means top-notch security for you.
Unlike banks, which can take up to 7 business days to complete a transaction, dedicated international money transfer companies often deliver funds in 3-5 business days depending on the destination country.
In the time it takes a major bank to process your money and charge more of it for the favour, an international transfer service could send the money there and back.
When it comes to choosing the right international money transfer service, what matters is choosing the right one for you. Some of these companies prefer to handle customer service over the phone, others are geared toward online users. The best choice for you lies in how you, the customer, prefer to be serviced, although large or complex transactions are often better handled over the phone, as they can provide live guidance and are trained to go to considerable lengths to maintain your business, and so a special offer may be yours for the asking.
In either case, these companies typically provide a remarkable level of service, as their sole purpose is to facilitate easy transfers and their operation in multiple countries means a customer can get into contact with the service at virtually any time and get information specific to their case. Good luck getting that out of your bank’s automated system or even a helpful teller tied to the banks old ways of doing things.
In general, we think if you are sending money from Canada, any of the companies mentioned in this article are a great choice.
For snow birds or Canadians moving to the USA, Australia or the UK it may be wise to choose a service with offices and currency traders in the locations you plan to reside. This means services and regulations in those countries also apply.
Alternately, if you are not in Canada and you need to send money to Canada it is often not possible to choose a service that has a physical presence your country of residence but its good to know they are regulated in the country you are sending money to.
While we do earn considerations for including some of the listed services in our reports, we are always truthful in our evaluations and it is important to note that we also include services with which we have no relationship in an effort to provide you with the best possible information. We strive to offer quality, trustworthy information in an industry sorely lacking such a source, and in a time where the goal of many is to profit, our goal is to become the destination for international money transfer education. We simply offer the information and allow you to make the best decision for your individual situation. Thank you for reading and tell other about us!