saving money

The Cheapest Ways to Transfer Money Overseas for Canadians

March 9, 2017

Anyone who’s ever moved abroad has learned the struggle of transferring money from one country to another. This process is particularly painful if you’re paying down debt like a student loan in another country. Not only are you getting dinged on the loan’s interest, but you’re losing a portion of the savings to the bank just to get it over there. If you’re paying down a debt as large as a student loan, those are the transfers that will incur the largest fees. To help you keep your financial sanity, here are a few ways to get around paying hefty fees to your bank and save money on your next international currency transfer.

Transferwise

Transferwise is a peer-to-peer lending service, meaning they cut out the middleman (aka the bank). I was recommended Transferwise from a British friend who was paying her student loan back in the UK while living in Canada.

Transferwise was created by two Estonian friends (Taavet Hinrikus and Kristo Käärmann) who were living in the UK at the time. Kristo needed to transfer money every month back home to Estonia to pay his mortgage there, and Taavet was working remotely and needed to convert his paycheck — which was in euros — into pounds. Alas, Transferwise was born.

The cost of moving money overseas via Transferwise is super transparent on their website, and they tout that there are no hidden fees or markups like you get at the big banks. The rate listed on their website for transferring CAD overseas is 1% on amounts up to $9,500 and 0.7% for the amount beyond $9,500. No extra fees, and they claim that “transfers from Canadian Dollars usually received in 4 working days.”

Visa Direct

A friend of mine who is paying her student loans overseas swears by TD’s Visa Direct. TD’s claim is that they will let you “send money worldwide for as low as $8.95.” Not bad. The only catch is that the recipient of your funds needs to have a Visa Debit Card, a Visa Credit Card or a Reloadable Visa Prepaid card. If this is the option you want to go with, you’d need to either set up an account in that country or have a family member do so, and transfer through them. They claim to let you transfer to over 170 countries in more than 150 currencies, and have the money transferred within 24-28 hours. On the TD website, the fees are listed at $8.95 for up to $1,000 and $12.95 for transfers ranging from $1000.01 to $2,500. 



Your own bank

With so many new options for transferring money internationally, I’ve been finding that banks are sometimes willing to negotiate. If you’re sending a large sum of money overseas, tell your bank that you’re weighed your options and found a cheaper rate than they have listed. They often have the power to charge you a lower percentage fee or even charge a flat rate for the transfer. If you’re more comfortable putting your money in the hands of a bank that you trust, it’s definitely worth asking them what they can offer you.

Carrying cash

Depending on where you’re sending the money to, it may be worthwhile to wait for your next trip and take the money with you. For my household, our struggle is getting money over to Australia where we’re customs claims we can carry up to $10,000 CAD. Carrying large amount of cash of course comes with its downsides. You still have to pay the conversion fee to convert the money to local currency, and it’s risky to be carrying large sums of money in your bag or even in a money belt.

How do you transfer money overseas? Anything I should add?

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