Money Transfers from USA to Canada (Simply Explained)
Below is a simple guide to the best ways to transfer money from the US to Canada – without paying high bank fees.
I’ll explain how it works, how long it takes, and compare the best services for USD to CAD.
Disclosure: This page contains affiliate links which can save you even more money! For more information, see my disclosures here and make sure to check out the best and cheapest ways below.
Best Rates For Sending 5,000.00 USD to CAD
Best Rates For Sending 5.00 USD to CAD
1. Best Ways Compared
If you’re sending money from the USA to Canada, the best services you can choose are Wise, OFX and Ria or Western Union.
Importantly: From from our experience, which one you should choose depends on the amount you are sending.
|Best Transfers for USA to Canada|
|Best for small amounts (Below $7000 USD)||Wise (Go to Wise Review)|
|Best for large amounts (Above $7000 USD)||OFX (Go to OFX Review)|
|Best for small cash pick-up||Ria (Go to Ria Review) or Western Union (Western Union Review)|
|Best for small fast transfers (if you can use a bank otherwise choose our cash options)||Wise (Go to Wise Review)|
|Cheapest transfers||See small and large amounts|
The truth is, there is no one-size-fits-all solution to international currency transfers.
Each service comes with its own set of strengths (and weaknesses).
For example, services that are excellent for smaller transfers are typically easy to sign up and keep costs low through streamlined customer service.
Meanwhile, services that are excellent for larger transfer need to deal with more regulation and bank transfer limits, this means that their customer service is ideally 24/7 and phone based (as is out top recommendation here). This may cost a little more (for smabut we found they also reduce the percentage fees charged as the amounts increase.
- Transfer fees (some services make smaller transfers affordable, while others focus on helping you save on your large transfers above $7000 USD/$9500 CAD)
- Transfer speed
- Choice of payout methods (do you need to send a bank transfer or a cash payment?)
- Customer Service (very important if you’re sending large amounts of money overseas)
- Transfer experience (that is, how the specific strengths of a money transfer provider comes together to prevent transfer delays, account hold ups, and an overall smooth experience)
Now get the low down on which money transfer service is best for your needs and why.
1.1 Small bank transfers below $7000 USD/approx $9500 CAD
For small bank transfers from the USA to Canada, we recommend Wise (review). The reason is a combination of great customer service, great services and low transparent fees.
Every other money transfer company and bank (that we know of) builds their fees into the exchange rate they give you.
However as you can see above, the Wise exchange rate is the mid-market rate for USD-CAD bank transfers and are regulated in both USA and Canada.
Of course, they also need to make some money to keep the lights on which we discuss in more detail below.
Wise also offers a Multi Currency Account (review) which lets you hold, manage, and convert between USD and CAD (50+ currencies) as well as get international bank details for Canada and the USA (and 8 other major currencies) so you can pay and get paid like a local. A MasterCard debit card comes linked with the Multi Currency Account, making it easy for snowbirds, sunbirds or other Canadians and Americans to save on exchange rates.
Something else we really like, is that you can get up to date rates through the Wise calculator (opens new tab) you can see the fees you pay without signing up.
1.2 Large Bank Transfers Above $7000 USD/approx $9500 CAD
You may need to send large bank-to-bank transfers to Canada in certain situations.
- if you’re emigrating and you want to set up a Canadian bank account or
- if you’re buying property in Canada
For these transfers, we recommend OFX in our in-depth review who have been built from the ground up to handle large transfers.
How do they make large transfers from the USA to Canada smooth and affordable?
- They’re regulated in the USA and Canada (by the FinCen and FINTRAC, respectively) and have offices in both countries.
- They offer excellent customer support (very important when a large amount of money is involved) Importantly: OFX have an office in Toronto and New York. On a practical level this can be really helpful to ensure everything runs smoothly. (They also have a 24/7 number which gets routed to UK or Australia if the US or Canada are our of office hours)
- Their rates are structured to help you save money on transfers above $7000 USD/approx $9500 CAD
- They offer flexible services like Spot Orders, Forward Contracts, and Market Orders so you can send large transfers affordably right away or in the future
Also OFX may charge a fixed fee of $15, however if you click here (opens a new tab) you can avoid these fees all together.
1.3 Small Cash Transfers Below $7000 USD/approx $9500 CAD
If you need to send cash to a friend or family member who’s in Canada, services like Western Union (review), MoneyGram (review), and Ria (review) can be helpful despite the fees.
MoneyGram and Ria are integrated into pretty much every 7-Eleven and Walmart in the USA, making it easy to quickly send cash to Canada.
Western Union’s Money In Minutes also makes sure emergency cash reaches your recipient within 10 minutes (this service comes with a delivery guarantee).
You might also like: Ria Vs MoneyGram Vs Western Union and if you are new to sending cash overseas check out What is Remittance?
2. Cheapest Ways to Send Money from the USA to Canada
2.1 Cheapest Way to Send Small Bank Transfers Below $7000 USD/approx $9500 CAD
Wise (review) gets our vote for the cheapest option. In out article on the 7 cheapest ways to transfer money we recommend Wise and CurrencyFair but CurrencyFair cannot be used in the US.
Wise is known for their transparent fee structure and passes on a lot of savings to their users.
They are also a bit unique:
They offer transfers at the inter-bank rate (that is, the rate at which banks and large financial institutions exchange currency) and don’t add a markup on the exchange rate.
Of course, they do have fees but you can see them using their calculator before you even sign up.
Wise also has local bank accounts in the US and Canada. Simply put, this generally means no surprise fees banks often charge (like sending or receiving fees).
Usually, you will pay as little as $7 USD (which includes their percentage fee based on the amount) to send $1000 USD to Canada when you fund your transfer from your bank account. That my friends is very inexpensive.
2.2 Cheapest Way to Send Large Transfers Over $7000 USD/approx $9500 CAD
In our experience, both XE and OFX are great options for sending large transfers from the USA to Canada.
The cost of sending large transfers with them is pretty similar, but OFX may have an occasional advantage simply because XE charges a small fee for all transfers below $500 USD/CAD.
OFX typically charges a flat $15 fee for all transfers below $10,000 but you can have this $15 fee waived by simply using this link to OFX here.
Importantly, both services keep large transfers affordable by making sure the margin (in percentage terms) on the exchange rate they offer decreases as the amount increases.
Learn more about sending large international transfers with XE (review) and OFX (review).
3. Fees You Should Know About
Using a bank like HSBC, Citi, Chase, or Wells Fargo may seem like the easiest way to send money from the USA to Canada, but these transfers can turn out to be very expensive.
Specialized money transfers companies on the other hand can be much more affordable, even though they also charge fees.
Here are the most common fees that currency transfer companies charge:
- Fixed fees
- Margin on the exchange rate (usually the biggest cost when it comes to transfer fees)
- Sending and receiving fees (charged by your bank or your recipient’s bank – See 1 and 4 in image)
3.1 Fixed Fees
This is the service fee charged by currency transfer companies and it is usually a small fee.
Some companies talk about providing “fee-free” services in their marketing, but this usually comes with a conditions applied clause (like “fee-free” for the first couple of transfers or above a certain amount).
Also, even when the fixed fees are waived, there are other costs to be considered.
3.2 Margin on the Exchange Rate
This is usually the heftiest cost in the equation.
Other than Wise, no money transfer company offers transfers at the interbank rate (that is the rate at which banks and large financial institutions exchange currency).
Most importantly, money transfer companies add a percentage margin on the exchange rate they offer to make money from your transfer.
Depending on the service they offer (small or large transfers), this percentage margin can increase or decrease based on the amount.
How to get the lowest exchange rate?
Compare rates between similar money transfer companies that meet your requirements before setting up your transfer. An easy way to do this is to start with exchange rate Wise offers and compare it with others you may be considering.
However, the cheapest service may not always be the best choice, and sometimes you may need to make considerations for factors such as customer service, transfer speed, etc. This is especially true of large transfers – which we discuss above.
But even with the margin on the exchange rate, sending money internationally via specialized services is generally much cheaper than banks.
3.3 Sending and Receiving Fees
Sometimes you may be charged fees by your bank in the US and/or your recipient’s bank in Canada.
We call these “hidden fees” because many people get a surprise when they receive their bank statement.
For example, Bank of America can charge up to $45 USD if your chosen money transfer company doesn’t have a local bank account.
Most Canadian banks also charge $15-$20 CAD for receiving international payments.
This is where companies like Wise and OFX can come in to help you save on costs. They do this by using local bank accounts to accept your funds and also to pay them out.
However – one hidden cost you may not be able to avoid is the cash advance fee charged by credit card issuers (if you’re funding your transfer with a credit or debit card, that is).
Find out more about how international transfer fees work and the cheapest ways to send money internationally
4. Safest Ways to Send Money from the USA to Canada
All the money transfer companies recommended above are licensed money transfer providers which are heavily regulated. This does provide an important level of safety.
If you are a resident of the US, you are also protected by the Consumer Financial Protection Bureau (CFPB) which regulates the financial products Americans use including international money transfers of $15 or more.
Wise, WorldRemit, Western Union, MoneyGram and Ria are all regulated in the USA (byFinancial Crimes Enforcement Network (FinCEN) and in Canada by The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).
XE and OFX also have a physical presence (offices) in both countries, making them reliable money transfer providers for your large transfers.
Other than regulatory laws, these companies also use industry-leading encryption protocols like two-factor authentication, updated SSL certificates, and manual audits to keep your money and personal data safe.
5. How to Send Money from the USA to Canada
Getting started with your USD-CAD money transfer is easy:
- Select a money transfer company based on your needs (transfer amount, speed, payout method, etc) from our list above.
- Create and verify your account. All licensed money transfer providers require their users to verify their identity via a KYC (Know Your Customer process). This usually involves uploading a national ID on their portal, submitting address proof documents for verification, or even a short video call at your chosen time (this is rare).
Companies like XE and OFX may need additional documents and information (like the purpose of your transfer, a bank statement, etc) to keep your large transfer safe.
- Fund your transfer after checking the exchange rate and fees.
- Enter and double check your recipient’s details.
- Track your transfer with text notifications or on the transfer company’s mobile app (or web dashboard).
- Funds arrive.
You might also like: Online Money Transfer Services in the USA which also covers other destinations like Money Transfers USA to UK, Australia, Philippines and India
6.1 Can I Send Money to Canada With Venmo, Cashapp, Or Zelle?
Venmo and CashApp are ideal for local peer-to-peer payments to friends, family, and trusted businesses in the US, while Zelle lets you send local bank-to-bank transfers only.
Venmo and Zelle don’t support international transfers at all (not even to Canada), and CashApp only offers USD-GBP transfers.
6.2 Can I Send Money to Canada With Paypal for Free?
No, PayPal only offers fee-free transfers to other personal PayPal users in the US.
If you send money to a Canadian PayPal account, you will pay PayPal’s international transfer fees.
6.3 Can I Send Money from the USA to Canada for Free?
USD to CAD transfers will always attract international transfer fees, whether you send money through a bank or a currency transfer provider.
The closest you can get to fee-free transfers is when you sign up for Wise’s multi-currency account which lets you hold CAD as well as get bank details in CAD so you can pay and get paid like a local (but currency exchange fees are applicable if you hold a USD multi-currency account).
6.3 Are Money Transfers to Canada Taxable?
Money sent as a gift or remittance is not taxable.
But large transfers – usually as a result of property sales, selling shares, etc. may attract a capital gains tax. Please consult your tax professional for specific advice.
Moreover, all transfers over $10,000 CAD need to be reported to the Canada Revenue Agency (CRA) by the reporting entity.