We share a lot of things with our northern neighbors: the world’s longest land border, English as an official language, and Niagara Falls, being just a few. However, when it comes to currency it seems we’re worlds apart. Sending money to Canada can sometimes entail huge fees, and with a wealth of options from banks, apps, and money transfer companies all claiming to offer the best deal, it can be hard to know where to go for your remittance. Our useful guide looks at the differences between banks and money transfer companies and hopes to give readers an idea of the costs and fees involved when sending cash to Canada so that you can find the best option
The Cost of Sending Money to Canada Through Banks vs. Money Transfer Providers
There are two main costs that you’ll face when sending money to Canada from the United States and these are the exchange rate margin and any associated transfer fees.
The exchange rate margin is simply the difference in percentage between the interbank rate, a rate that large banking corporations use when sending money to each other, and the rate at which currency is sold to you and me. The interbank rate is sometimes referred to as the mid-market rate.
As the USD to CAD currency pairing is commonly used for both trade and for sending money to friends and family members across the border, it would be typical for this exchange rate margin to be less than 3% over the interbank rate. At the time of writing (Sep 26, 2022) WorldRemit has an exchange rate margin of 2.25%.
Banks are often less transparent about their exchange rate margins and a few will only make their currency converter available to account holders. However, as of Sep 26, 2022, Wells Fargo and Bank of America both had an exchange rate margin of 5.42%, and Chase Bank of 3.42%.
This means that if you were to send USD 1,000 to Canada with WorldRemit, your family member would receive USD 1336.05 CAD but with Wells Fargo or Bank of America they would receive just USD 1290.50 CAD – that’s USD 45.55 less in their pockets!
Unfortunately, exchange rate margins aren’t the only cost associated with transfers. Banks and money transfer companies also charge a transaction fee for initiating the remittance. The table below highlights the charges each provider levies for sending money from the United States to Canada when using bank transfers.
Provider | Cost | Time |
Chase Bank | There is a USD 5.00 fee or no fee if sending over USD 5,000. | 1-2 days |
Bank of America | According to their website there are no fees for international wire transfers (although documents elsewhere state USD 35) | 1-2 days |
Wells Fargo | Fees are disclosed at the time of the transaction but range from USD 35-40. | 1-2 days |
U.S Bank Corp | USD 50 for personal account holders. USD 70 for business account holders. | 1-3 days |
CitiGroup | These range from USD 0-35 depending on your account type. View our Citigroup guide for a breakdown. | 1-2 days |
WorldRemit | USD 2.99 | Instant |
As you can see from the table it isn’t unusual for banks to charge up to USD 50 in fees for processing a fee, while WorldRemit has a maximum fee of USD 2.99.
Sending Money to Canada through Banks Pros and Cons
Pros
Cons
Sending Money to Canada through MoneyTransfer Providers Pros and Cons
Pros
Cons
The Cut-Off Times When Sending Money to Canada
Unfortunately, banks, unlike money transfer companies, aren’t open 24 hours. This means that wire transfers are only processed during bank opening hours and then can take up to two working days to arrive.
Banks have daily cut-off periods and any remittances received after this time will be processed the next working day. This means that a remittance sent after the cut-off period on a Friday afternoon will be processed on Monday morning and will arrive with your recipient on Wednesday. Although any bank holidays taking place in Canada or the United States during this period can also affect the arrival time of your remittance.
The following table displays the cut-off time for the five main banks in America and WorldRemit.
Provider | Cut Off Time | Delivery Time |
Chase Bank | 16.00 (EST) | 1-2 business days |
Bank of America | 17.00 (EST) | 1-2 business days |
Wells Fargo | 17.00 (EST) | 1-2 business days |
US Bank Corp | 16.00 (EST) | 1-3 business days |
CitiGroup | 17.15 (EST) | 1-2 business days |
WorldRemit | 24 Hours | Immediate |
More money transfer guides in Canada
Should You Send Through Your Bank or an Alternative Provider?
While banks are reliable and offer a secure service, the excessive exchange rate margins and extortionate transfer fees should be enough to put anyone off using them to transfer money between the United States and Canada. Money transfer companies can not only carry out your transfer at a far more competitive rate but also offer a speedier service when compared to the slow transfer times that banks bestow on customers. Why not look at our USD/CAD real-time comparison table to find the current best rate for your remittance.
References
International Money Transfer - Send Money Online | WorldRemit
The Benefits of Choosing Money Transfer Services Over Your Bank (currencyfair.com)
Send Money Overseas – International Money Transfers - Wells Fargo
Order Foreign Currency Cash - Wells Fargo
Chase (US) Exchange Rate: How Much Does a Chase (US) Money Transfer Cost? - Wise
International banking | Corporate and commercial solutions | U.S. Bank (usbank.com)
Citibank Exchange Rate | Citibank Money Transfer - Wise
Currency Converter Calculator to Order Foreign Currency (bankofamerica.com)