Sending Money Internationally from Canada: A Newcomer's Guide
Compare the best ways to send money abroad from Canada, including bank wire transfers, online services like Wise, fees, exchange rates, and tips for saving on international transfers.
Why International Money Transfers Matter for Newcomers
Sending money back to family in your home country is one of the most common financial activities for newcomers to Canada. Whether you are supporting parents, paying off obligations, or simply sharing your new Canadian earnings with loved ones, you need a reliable, affordable way to move money across borders.
The cost differences between transfer methods can be enormous. A single international transfer can cost anywhere from a few dollars to over $50 in fees, plus hidden costs buried in unfavorable exchange rates. Over a year of monthly transfers, choosing the wrong method could cost you hundreds or even thousands of dollars.
This guide compares the major options available in Canada, explains the hidden costs to watch for, and helps you choose the most cost-effective method for your situation.
Understanding the True Cost of International Transfers
Before comparing specific services, you need to understand the two components that determine the real cost of any international transfer.
Upfront Fees
This is the visible charge the service provider lists for the transfer. It might be a flat fee (for example, $15 per transfer) or a percentage of the amount sent. Some services advertise zero fees but make their money through the second component.
Exchange Rate Markup
This is where many services hide their real profit. The mid-market exchange rate (also called the interbank rate) is the true exchange rate that banks and financial institutions use when trading currencies with each other. You can find this rate on Google, XE.com, or any financial news site.
Most transfer services offer you a rate that is worse than the mid-market rate. The difference between the rate they give you and the real mid-market rate is their markup. On a $1,000 transfer, even a 1% markup means you lose $10 in addition to any upfront fees.
To calculate the true cost of any transfer, add the upfront fee to the exchange rate markup. Always check the mid-market rate before initiating a transfer so you can calculate how much the provider's rate differs.
Major Bank Wire Transfers
All of Canada's Big 5 banks (RBC, TD, Scotiabank, BMO, and CIBC) offer international wire transfer services. You can initiate a transfer through online banking or by visiting a branch.
How Bank Wire Transfers Work
You provide the recipient's bank details, including their name, account number, bank name, branch address, and SWIFT/BIC code. The bank converts your Canadian dollars to the destination currency and sends the funds through the international SWIFT network.
Typical Costs
Bank wire transfers are generally the most expensive option for sending money internationally. Fees typically range from $20 to $50 per outgoing transfer, depending on the bank and the destination. In addition, banks apply exchange rate markups that are often 2% to 4% above the mid-market rate.
Some banks may also charge a correspondent bank fee if the transfer passes through intermediary banks, and the recipient's bank may charge an incoming wire fee.
When Bank Wires Make Sense
Bank wires are best for very large transfers where the flat fee is a small percentage of the total amount, when you need to send money to a business account, or when no other service supports the destination country or currency.
Newcomer Tip
Several banks offer free incoming international wire transfers as part of their newcomer banking packages. Scotiabank's StartRight program also offers discounted international transfer services through their Global Money Transfer platform.
Online Money Transfer Services
Online transfer services have transformed international money transfers by offering significantly lower fees and better exchange rates than traditional banks. The most widely used services in Canada include the following.
Wise (Formerly TransferWise)
Wise is widely considered one of the most transparent and cost-effective services for international transfers from Canada.
How it works: Wise uses the real mid-market exchange rate and charges a small, transparent fee that is calculated before you confirm the transfer. There is no exchange rate markup.
Fees: Fees vary by currency and amount but are typically between 0.4% and 1.5% of the transfer amount. The exact fee is shown upfront before you send.
Speed: Most transfers arrive within one to two business days. Some currency routes offer near-instant delivery.
Funding options: You can fund transfers via bank transfer (direct debit or Interac e-Transfer), debit card, or credit card. Bank transfers are the cheapest funding method.
Availability: Wise supports over 50 currencies and can send money to most countries worldwide.
Regulation: Wise is regulated by FINTRAC (Financial Transactions and Reports Analysis Centre of Canada) as a money services business. For information on FINTRAC's role in overseeing money services businesses, visit https://www.canada.ca/en/financial-transactions-reports-analysis.html.
Western Union
Western Union is one of the oldest and largest money transfer networks in the world, with agent locations in over 200 countries.
How it works: You can send money online, through the Western Union app, or at an agent location (many pharmacies and convenience stores in Canada serve as agents). The recipient can receive money directly to a bank account, as a mobile wallet deposit, or as a cash pickup at an agent location.
Fees: Fees vary widely depending on how you send (online vs. in-person), how you pay (bank account vs. credit card), and how the recipient collects (bank deposit vs. cash pickup). Online transfers funded by bank account are generally the cheapest option.
Exchange rates: Western Union applies an exchange rate markup in addition to its transfer fees. The total cost is often higher than Wise but can be competitive for certain corridors.
Advantage: Cash pickup is available in remote areas where recipients may not have bank accounts. The extensive agent network makes it accessible in countries where digital infrastructure is limited.
Remitly
Remitly focuses on transfers to developing countries and offers competitive rates for popular remittance corridors.
How it works: You create an account, choose a recipient country, and select the delivery method (bank deposit, mobile money, or cash pickup). Remitly offers two speed tiers: Express (faster, slightly higher fee) and Economy (slower, lower fee).
Fees: Fees depend on the corridor, amount, and delivery speed. For many popular routes, fees are lower than Western Union.
PayPal / Xoom
PayPal's international transfer service, Xoom, allows you to send money abroad from your PayPal account or directly from a linked bank account.
Fees and rates: Xoom charges a transfer fee and applies an exchange rate markup. The total cost is generally higher than Wise but can be competitive for certain countries.
Interac International Money Transfer
Some Canadian banks and credit unions support Interac-facilitated international transfers to select countries. This is a relatively newer service with limited destination countries but offers competitive rates for supported corridors.
Sending Money Through Your Bank's Global Transfer Service
Some Canadian banks have developed their own international transfer platforms that offer better rates than traditional wire transfers.
Scotiabank Global Money Transfer: Offers no-fee transfers to select countries with exchange rates that are better than standard wire transfer rates. Available through Scotiabank online banking.
RBC International Money Transfer: Available through RBC online banking for transfers to select countries, with fees that are lower than traditional wire transfers.
These services are typically limited to specific destination countries and may not cover all corridors, but they are worth checking if you bank with one of these institutions.
Cost Comparison Example
To illustrate the differences, consider sending $1,000 CAD to a country where the mid-market exchange rate is 1 CAD = 55 units of the destination currency.
Bank wire transfer: $45 fee plus a 3% exchange rate markup. The recipient receives approximately 53.35 units per dollar, totaling approximately 50,934 units. Your effective cost is approximately $75.
Wise: $7 fee using the mid-market rate. The recipient receives 55 units per dollar on $993, totaling approximately 54,615 units. Your effective cost is approximately $7.
Western Union (online, bank-funded): $5 fee with a 1.5% exchange rate markup. The recipient receives approximately 54.175 units per dollar, totaling approximately 53,914 units. Your effective cost is approximately $18.
The differences add up significantly over time. Sending $1,000 monthly through a bank wire versus Wise could cost you an additional $800 or more per year.
Tax and Reporting Requirements
The Government of Canada requires financial institutions and money services businesses to report certain international transfers. Under FINTRAC regulations, any international electronic funds transfer of $10,000 or more (or multiple transfers that appear related and total $10,000 or more) must be reported to FINTRAC.
This does not mean the transfer is illegal or that you will be taxed on it. The reporting requirement exists for anti-money-laundering purposes. You can freely send money abroad as long as the funds are legitimately earned.
However, you should be aware of two tax-related considerations.
No tax on sending money abroad: Canada does not tax money you send to family abroad. There is no gift tax in Canada for the sender.
Tax on receiving money from abroad: If you receive large amounts of money from abroad (for example, gifts from family, sale of property in your home country), you should report this on your tax return. While gifts are generally not taxable in Canada, the CRA may ask you to explain large deposits.
For FINTRAC reporting requirements, visit https://www.canada.ca/en/financial-transactions-reports-analysis/services/reporting.html.
For CRA guidance on foreign income, visit https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/newcomers-canada-immigrants.html.
Tips for Saving Money on International Transfers
Compare rates every time: Exchange rates and fees change daily. A service that was cheapest last month may not be the cheapest today.
Avoid credit card funding: Most services charge higher fees when you pay with a credit card instead of a bank transfer. Your credit card issuer may also charge a cash advance fee.
Send larger amounts less frequently: If a service charges a flat fee, sending $2,000 once per month is cheaper than sending $500 four times per month.
Use mid-market rate services: Services like Wise that use the mid-market rate with a transparent fee are almost always cheaper than services that hide costs in the exchange rate.
Set up rate alerts: Some services let you set a target exchange rate and notify you when it is reached, allowing you to send when rates are favorable.
Check your bank's newcomer benefits: Some newcomer banking packages include free or discounted international transfers during the first year.
Be cautious of "zero fee" offers: If a service advertises no transfer fees, check the exchange rate carefully. The cost is likely hidden in a poor exchange rate.
Choosing the Right Service
The best service depends on your specific needs.
For lowest overall cost on most transfers: Wise is typically the most affordable option due to its mid-market exchange rate and transparent fees.
For cash pickup in remote areas: Western Union's extensive agent network is hard to match for recipients who cannot receive bank deposits.
For simplicity through your bank: If you prefer to keep everything within your bank, check your bank's global transfer service. The rates may be higher than Wise, but the convenience of managing everything in one place may be worth it for some people.
For regular scheduled transfers: Some services allow you to set up automatic recurring transfers, which is convenient if you send the same amount to the same person each month.
Protecting Yourself from Fraud
International money transfers are a common target for scammers. Follow these safety practices.
Only send money to people you know and trust. Never send money to someone you met online who asks for financial help.
Be wary of requests to receive and forward money. This is a common money laundering scheme that can make you criminally liable.
Use established, regulated services. All legitimate money transfer services in Canada must be registered with FINTRAC. You can verify a company's registration at https://www.canada.ca/en/financial-transactions-reports-analysis/services/money-services-businesses-registration.html.
Keep records of all transfers. Save confirmation numbers, receipts, and bank statements for your records and potential CRA inquiries.
The Canadian Anti-Fraud Centre provides information about common scams at https://www.antifraudcentre-centreantifraude.ca/index-eng.htm.
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