When you need to convert a large sum of money between currencies, you have two main options: use your bank’s wire transfer service, or work with a dedicated currency exchange provider. Most Canadians default to their bank because it feels familiar and safe. But that familiarity comes at a cost—often a significant one. Here’s a detailed comparison of what each option actually costs, so you can make an informed decision.
The Two Options Explained
A bank wire transfer moves money electronically from your Canadian bank account to another account, either domestically or internationally. If the currencies are different, your bank converts the funds as part of the transaction. You pay a wire fee, and you pay through the exchange rate the bank uses.
A currency exchange service (also called a foreign exchange provider or FX specialist) converts your currency at a better exchange rate, then transfers the converted funds to your destination account. These companies focus exclusively on currency exchange, which allows them to offer rates that banks typically can’t match.
Both methods accomplish the same end result: your money arrives in the destination account in the currency you need. The difference is what you pay to get there.
Bank Wire Transfer: The True Cost
Banks charge for wire transfers in two ways: an explicit fee you can see, and an exchange rate markup you often can’t.
The Visible Fees
Canadian banks charge $30 to $80 for outgoing international wire transfers, depending on the bank and account type. Here’s what the Big Five charge:
RBC: $45 for outgoing wires from a Canadian dollar account. Incoming wires cost $17 (free for amounts under $50).
TD: $50 for outgoing international wires. Incoming wires cost $17.50.
BMO: 0.20% of the transaction amount for in-branch wires, with a $15 minimum and $125 maximum, plus a $10 communication charge.
CIBC: $30 to $80 depending on the amount being sent.
Scotiabank: $15 to $50 depending on how the transfer is initiated (online vs. branch).
These fees are disclosed upfront. What’s not disclosed is often much larger.
The Hidden Cost: Exchange Rate Markup
When your bank converts currency, they don’t give you the mid-market rate—the rate you see on Google or XE. Instead, they add a markup of 2.5% to 3.5% above that rate. On a $10,000 transfer, a 3% markup costs you $300. On $50,000, it’s $1,500. This markup isn’t listed as a fee. It’s built into the rate they quote you, which makes it nearly invisible unless you compare their rate to the mid-market rate yourself.
Additional Charges
International wire transfers often pass through intermediary banks (correspondent banks) before reaching the destination. Each intermediary can deduct $15 to $30 from your transfer. The receiving bank may also charge $15 to $25 to accept the incoming wire. These fees aren’t disclosed until after the transfer completes, and they’re deducted from the amount your recipient receives.
If you need to trace, cancel, or amend a wire transfer after it’s sent, banks charge additional fees—often $25 to $50 per bank contacted. GST of 5% is also applied to wire transfer services in Canada.
Example: $25,000 USD Conversion via Bank Wire
Let’s say you need to convert $25,000 CAD to USD and send it to an American account. Here’s what a typical bank wire might cost:
Wire transfer fee: $50
Exchange rate markup (3%): $750
Intermediary bank fee: $25
Receiving bank fee: $20
Total cost: $845
Your recipient receives approximately $24,155 worth of value instead of $25,000. And your bank statement shows only the $50 wire fee—the rest is invisible.
Currency Exchange Service: The True Cost
Dedicated currency exchange providers work differently. They make their money on tighter exchange rate spreads and typically charge lower (or no) transfer fees. Because currency conversion is their core business, they’ve optimized for it.
Exchange Rate Markup
Currency exchange services typically offer rates that are 1% to 1.5% above the mid-market rate, compared to 2.5% to 3.5% at banks. Some providers are even tighter—as low as 0.5% to 1% for larger amounts. This difference in rate is where most of your savings come from.
Transfer Fees
Many currency exchange providers include wire transfers at no additional charge when you exchange currency with them. Others charge nominal fees of $5 to $15, far below the $30 to $80 banks charge. The business model is different: banks treat wire transfers as a profit center; exchange services use them as a delivery mechanism for the currency you’ve already paid to convert.
No Intermediary Surprises
Reputable currency exchange services typically have direct banking relationships that minimize or eliminate intermediary fees. They can tell you exactly how much your recipient will receive before you commit to the transaction, with no deductions in transit.
Example: $25,000 USD Conversion via Currency Exchange Service
Same scenario: converting $25,000 CAD to USD. Here’s what a typical currency exchange service might cost:
Wire transfer fee: $0 (included)
Exchange rate markup (1.5%): $375
Intermediary bank fee: $0
Receiving bank fee: $0
Total cost: $375
Your recipient receives approximately $24,625 worth of value. That’s $470 more than the bank wire option—on a single transaction.
Side-by-Side Comparison
Here’s how the two options compare across common transfer amounts:
$10,000 CAD to USD:
Bank wire total cost: ~$380 (3% markup + $50 fee + intermediary)
Currency exchange total cost: ~$150 (1.5% markup, no wire fee)
Savings with currency exchange: $230
$25,000 CAD to USD:
Bank wire total cost: ~$845
Currency exchange total cost: ~$375
Savings with currency exchange: $470
$50,000 CAD to USD:
Bank wire total cost: ~$1,625
Currency exchange total cost: ~$750
Savings with currency exchange: $875
$100,000 CAD to USD:
Bank wire total cost: ~$3,175
Currency exchange total cost: ~$1,500
Savings with currency exchange: $1,675
For regular transfers—say, a cross-border worker converting $5,000 monthly—the annual savings can exceed $2,000.
What About Speed and Security?
Banks often cite security and reliability as reasons to use their services. But FINTRAC-regulated currency exchange services offer equivalent protections:
Regulation: Licensed currency exchange services in Canada are registered with FINTRAC (Financial Transactions and Reports Analysis Centre of Canada) as Money Services Businesses. They’re subject to anti-money laundering requirements, client identification rules, and reporting obligations—the same regulatory framework that governs banks.
Fund Security: Reputable providers hold client funds in segregated accounts at major Canadian financial institutions, separate from their operating capital. This means your money is protected even if the company faces financial difficulties.
Transfer Speed: Currency exchange services typically deliver funds same-day or next business day for USD transfers—comparable to or faster than bank wires, which can take 1 to 5 business days depending on the destination and intermediary routing.
Traceability: All legitimate providers issue trade confirmations with reference numbers, and transfers can be traced electronically through the banking system.
When Banks Make Sense
There are limited scenarios where using your bank’s wire service might be the better choice:
Very small amounts: If you’re transferring under $1,000, the percentage savings may not justify setting up an account with a new provider. (Though many people find the relationship valuable for future, larger transfers.)
Same-currency domestic transfers: If you’re sending CAD to another CAD account within Canada, or USD to another USD account within the US, no currency conversion is needed. Banks handle this at minimal cost.
Existing premium banking relationships: Some premium bank accounts waive wire fees or reduce exchange rate markups. If you already pay for a premium tier for other reasons, the incremental cost of occasional wires may be acceptable.
Emergency situations: If you need to send money immediately and don’t have an existing relationship with a currency exchange service, your bank can process the transfer right away. The premium you pay is the cost of not planning ahead.
For most Canadians making transfers of $2,000 or more, especially recurring transfers, a currency exchange service delivers significantly better value.
How to Compare for Yourself
Before your next transfer, do this simple comparison:
First, find today’s mid-market rate. Google “CAD to USD” or check XE.com. Write down the rate.
Second, call your bank and ask what rate they’ll give you for the amount you want to exchange. Calculate the percentage difference between their rate and the mid-market rate. That’s their markup.
Third, call a currency exchange service—like CanAm Currency Exchange—and ask for a quote on the same amount. Compare the rates and ask about any transfer fees.
The numbers usually speak for themselves. On a $20,000 transfer, you might find the bank’s rate is 3% worse, costing you $600 in hidden markup plus a $50 fee. The currency exchange service might offer a rate that’s 1% worse, with no transfer fee—a total cost of $200. That’s $450 in your pocket for a ten-minute phone call.
The Bottom Line
Bank wire transfers are convenient because you already have a banking relationship. But convenience isn’t free—it costs 2% to 3% of every dollar you convert, plus explicit fees, plus potential intermediary charges. For a $50,000 conversion, that convenience premium can exceed $1,500.
Currency exchange services exist because banks have overcharged for this service for decades. By specializing in currency conversion, they offer better rates, lower fees, and comparable security. The only cost is the few minutes it takes to set up an account and make a phone call.
For anyone converting more than a few thousand dollars—especially repeatedly—the math is clear. Get a quote from CanAm, compare it to your bank, and make an informed choice. You’ll likely find you’ve been leaving significant money on the table.
