How to Send Money to the US from Canada

Sending money from Canada to the United States is a common necessity. Understanding the various methods and associated costs is important for efficient transfers. This guide offers insights into how to send funds securely and cost-effectively, covering transfer options, exchange rates, fees, procedural steps, and security measures.

Common Money Transfer Methods

Various methods are available for sending money from Canada to the United States, each with distinct characteristics regarding speed, cost, and required information. Bank wire transfers are a traditional method for moving funds internationally. To initiate a wire transfer, you need the recipient’s full name and address, their bank’s name and address, the recipient’s bank account number, and the bank’s SWIFT/BIC code. For transfers to the US, the recipient’s ABA routing number is also necessary. These transfers usually take one to five business days to complete.

Online money transfer services, such as Wise (formerly TransferWise) or Remitly, have gained popularity for their convenience. These platforms require the sender to create an account, link a Canadian bank account for funding, and provide the recipient’s full name, address, email, and bank account details (including routing and account numbers for US recipients). Transfers through these services can be faster than traditional wires, with some offering delivery within minutes or a few hours, though typical speeds range from a few hours to a couple of business days.

PayPal offers international money transfer capabilities, often through its service Xoom. To send money via PayPal, you need the recipient’s email address, username, or mobile number. If sending through Xoom, direct transfers to bank accounts or for cash pickup are possible, requiring the recipient’s bank account details or identification for pickup. PayPal transfers between PayPal accounts are usually instant, but transfers to bank accounts can take several business days.

International money orders provide a physical document for sending funds. These can often be purchased from Canada Post, which partners with MoneyGram, or from some Canadian banks. You provide the recipient’s name and address, and the money order is then mailed to them for cashing at a designated location in the US. While generally secure, they are slower than electronic methods, taking several days to arrive and be processed.

Navigating Exchange Rates and Fees

The exchange rate is the value at which one currency can be converted into another. The “interbank rate,” also known as the “mid-market rate,” is the wholesale rate used by banks when trading large volumes of currency among themselves. This rate represents the true market value of a currency pair at any given moment.

However, consumers are not offered the interbank rate. Instead, banks and money transfer services apply a “customer rate” by adding a markup or margin to the interbank rate. This markup covers operational costs and generates profit. For example, a provider might offer an exchange rate that is 0.5% to 7.5% worse than the mid-market rate, effectively embedding a hidden fee within the conversion. It is important to compare the rate offered by a service against the live mid-market rate to determine the true cost of the currency exchange.

Beyond the exchange rate markup, various explicit fees can apply to money transfers. These often include flat fees charged per transaction, which may vary depending on the amount sent or the payment method used. Some services might charge percentage-based fees, where the cost is a proportion of the transfer amount. Intermediary bank fees are another common charge, particularly for traditional wire transfers. When a sending bank does not have a direct relationship with the recipient’s bank, one or more intermediary banks may be involved in routing the funds, each potentially deducting a fee. These intermediary fees can range from approximately $15 to $50 per transaction and are typically flat, not increasing with the transfer amount.

When initiating a wire transfer, you may have options to determine who pays these intermediary fees: “OUR” (sender pays all fees), “BEN” (recipient pays all fees), or “SHA” (fees are shared). To compare overall costs effectively, consider both the stated transfer fees and any hidden markups in the exchange rate. A service with a seemingly low upfront fee might have a less favorable exchange rate, ultimately making the transfer more expensive.

Step-by-Step Transfer Process

For a bank wire transfer, the process begins by visiting your bank branch or logging into your online banking portal. You will need to complete a wire transfer request form, which requires inputting the recipient’s full name, address, bank name, bank address, their bank account number, and the US bank’s ABA routing number and SWIFT/BIC code. After providing these details and specifying the amount in Canadian dollars, you will confirm the transaction and authorize the transfer from your Canadian bank account. The bank will then process the wire, usually providing a tracking number for reference.

When using an online money transfer service, the first step is to sign up for an account on their website or mobile application. After creating your profile, you will link your Canadian bank account or debit/credit card as the funding source. Next, you enter the recipient’s details, which generally include their full name, address, email, and US bank account information. You then specify the amount you wish to send in Canadian dollars, and the service will display the converted amount the recipient will receive in US dollars, along with any applicable fees. After reviewing all details, you confirm the transfer, and the service processes the payment.

If you choose to send money via PayPal, you will log into your PayPal account and navigate to the “Send & Request” section. You then enter the recipient’s email address, mobile number, or PayPal username. You will specify the amount to send in US dollars and select your preferred payment method linked to your PayPal account, such as a bank account or debit card. Before finalizing, you will see a summary of the transaction, including any fees and the exchange rate applied. After reviewing, you confirm the transfer, and the funds are sent to the recipient’s PayPal account or processed for direct deposit via Xoom if that service is utilized.

Securing Your Money Transfer

Verifying recipient details before initiating any transfer is paramount. Even a small error in the recipient’s name, account number, or routing number can cause significant delays or lead to funds being sent to the wrong person, which can be difficult to recover. Always double-check all information with the recipient directly to confirm accuracy.

Use reputable and regulated money transfer services. In Canada, financial entities and money services businesses (MSBs) involved in electronic funds transfers (EFTs) are regulated by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). Similarly, in the US, the Financial Crimes Enforcement Network (FinCEN) oversees money services businesses and implements regulations like the “Travel Rule,” which requires financial institutions to pass on certain information for transfers of $3,000 or more. Choosing services that comply with these regulations helps ensure a secure transaction environment.

Be aware of common scams associated with money transfers. Avoid sending money to individuals you do not know personally, especially if they pressure you into making a quick transfer or promise large sums in return. Be cautious of requests for money to cover unexpected fees, taxes, or emergencies from unfamiliar sources. Maintain records of your transactions, including confirmation numbers, receipts, and any communication with the recipient or service provider. This documentation can be crucial for tracking funds or resolving disputes with the transfer service.