Transferring money between banks in Canada is a relatively straightforward process that is essential for managing finances effectively. However, many Canadians get nervous, worried that money could be sent elsewhere or go missing.
So, in this article, I'm going to go over an in-depth guide on transferring money between banks here in Canada.
Different methods of transferring money in Canada
The common methods for transferring money between banks in Canada include:
- Online Transfers: Conducting transactions through online banking platforms.
- Interac e-Transfer: An efficient electronic funds transfer that can be employed between different banks.
- Wire Transfers: Suitable for larger transactions, often used for both domestic and international transfers.
- Electronic Fund Transfers: This allows companies or people to send money electronically nearly instantly. It is highly likely if your paycheques are deposited automatically, your company is using an EFT, otherwise known as direct deposit.
- ATM Transfers: Some ATMs offer the ability to transfer money between linked accounts at different banks.
- Bank Drafts: Physical means of moving funds, although these are less common in the digital age.
- Popular Apps: Popular applications like PayPal have made transferring money in Canada a breeze.
- Pre-authorized debits: Pre-authorized debits are best set up for recurring bills, like a cell phone or utility bill. They allow you to transfer to another institution or company on an automatic basis, as you've "authorized" the company to debit your account.
Step-by-step guide to transferring money between banks to your account or someone else's account
Transferring funds between banks in Canada is a straightforward process, whether moving money to one's account or another person's account. This guide details various methods, their procedures, and any associated fees.
Utilizing a simple online transfer from bank to bank
- Log in to your online banking platform.
- Navigate to the transfer money section. This could be different for each bank.
- Enter the recipient's account information. You will likely need their full name, account number, transit number, and institution number.
- Confirm the transfer details and any transfer fees.
It is very important that you double-check the information you've entered along with the fees. Sending money to the wrong person could have you losing the money, or the more likely situation, the bank sending it back to you and not refunding your fees.
Using Interac E-Transfers
The E-Transfer is by far the easiest way to send smaller amounts of money these days. And depending on your bank's limitations, you can even get away with sending $3000-$5000 a day with it.
- Select the Interac e-Transfer option within whatever online banking platform you use.
- Input the recipient's email address or mobile number and the transfer amount.
- Set a security question if the recipient doesn't have auto-deposit enabled.
- Interac e-Transfers are often fee-free, making them a favoured option for many. However, some basic account packages with major banks still charge fees, so keep this in mind.
Using a wire transfers or bank drafts
Typically, you'll be utilizing these options for larger purchases and overall larger sums of money. The critical thing to understand with both of these options is that it is difficult for the bank to get the money back once they've sent it, so it is very important you double-check the details.
For wire transfers:
- For smaller wire transfers, you can typically do them online. If it is too large, you'll need to head into the branch. I know my bank currently only allows online wires for $10,000 or less.
- Provide the recipient's details. You will often need things like routing number, ABA number if in the US, recipient details, recipient's bank details, and the amount you'd like to send.
- Be aware of higher fees for wire transfers, dependent on the amount. The more basic your banking plan, the higher the likelihood that your fees will be larger. My bank often charges $25 for a wire transfer.
For bank drafts:
- Purchase a draft at your bank.
- Provide the details of who you want to receive the money on the draft itself.
- Mail the cheque to the recipient or deliver it personally.
A bank draft is usually a much simpler method of sending money. However, it comes with its pros and cons in relation to a wire transfer.
A bank draft is usually much cheaper fee-wise. However, it is also a physical draft that must be delivered to the recipient manually. If you're in Ontario and have to get someone in Alberta money with a bank draft, you'd have to mail it and risk major issues if it goes missing.
With a wire transfer, it's typically in their account in just a day or two.
Using an Electronic Funds Transfer
You use EFTs a lot more than you think you do; you may just not know it. They're simple electronic transfers that can be sent on a recurring basis and are more so for when you want to set up things like a car or mortgage payment.
- Gather your account information. You'll need your account number, institution number, and transit number. If you're sending an EFT, you'll need to collect this information from the recipient
- Submit the information to your company or bank, and the transfer will be set up
A summary of required information for Wire/Bank/EFT transfers
To complete a transfer, one needs to provide specific details such as:
- Recipient's Name: The full name of the person or entity receiving the funds.
- Recipient's Address: The full address of the person or entity receiving the funds.
- Bank Account Number: The account number where the funds will be deposited.
- Financial Institution Number: A 3-digit number that identifies the bank.
- Branch Transit Number: A 5-digit number that identifies the specific branch of the bank.
- Branch Physical Address: Not always needed, but mostly needed in the case of wire transfers.
Using a pre-authorized debit (PAD)
Unlike an EFT, in which you're likely receiving money if you use one, with a pre-authorized debit, you are likely sending money to someone else. If you've ever signed up for a phone, television, or internet plan or even signed up for gas distribution to your home, you have very likely set up a PAD with the provider.
It allows the provider to debit your account for the amount you owe on your monthly bill. The process is quite easy; you just fill out a form at your bank and submit it.
However, one caveat is that I avoid using these if possible. With things like a mortgage, it will often be the case you are forced to give one. But, surprise or incorrect billing amounts can be a pain to deal with in terms of getting your money back from the company, and I'd rather just deal with paying the bills myself.
Using an app like PayPal or Wise (formerly Transferwise)
This definitely isn't the most conventional way for Canadians to send money, but I find here at Stocktrades we do end up utilizing PayPal and Wise a lot to pay international vendors.
The process is relatively easy. In fact, for PayPal, all you really need is an email address.
- Log in to your PayPal account
- Click "Send Money"
- State whether it is for friends or family or for services purchased
- Enter the email the recipient gave you to send the money to
Transferring money between banks in Canada has become a piece of cake
With the advent of online banking, the ability to move funds from one bank to another has become a convenient service most financial institutions provide.
I remember even 10-15 years ago, we didn't have half of the options I listed above. Or at least if they did exist, they would be a royal pain to access and use.
I have personally found that a lot of major institutions, depending on your banking plan, will still charge you for Interac E-transfers, but many digital options will provide them free of charge.
I almost never carry cash anymore. However, I have just as many bills and spend just as much as I did when I traditionally carried cash. I'm certainly not the only one who functions like this, so individuals need to transfer money for various reasons, including paying bills, sending money to friends or family, or consolidating funds in one account.
Common transfer fees and charges
While many financial institutions offer free Interac E-Transfer services, some transactions might involve fees. Common charges include:
- Interac e-Transfer Fees: Ranging from free to around $1.50 per transaction.
- Wire Transfer Fees: These can be more substantial and vary widely depending on the bank and the amount being transferred. I currently pay $25 for one.
- Bank Draft Fees: Usually smaller than a wire transfer fee, just because they're becoming a bit outdated. My bank charges $7.
- Electronic Fund Transfers: There is often no fee to receive one. But if you have to send one, your bank will likely charge you a particular fee unless you have a specific plan that includes them.
- Monthly Account Fees: Some banks charge for certain types of accounts, which allow for free or discounted transfer services.
Comparing transfer times
Over the years, transfer times have gotten significantly faster across virtually all payment methods. However, there are still some wait times, particularly if you're going international.
wdt_ID Transfer Transfer Time 1
A few minutes to a few hours
Bank Transfer (Domestic)
1-2 business days
Bank Transfer (International)
2-5 business days
Money App (PayPal)
Varied; most within a few minutes
Troubleshooting common issues with transfers
Transfer delays can occur for a variety of reasons, including bank processing times and transaction verification. If a transfer is taking longer than expected, here are a few steps to take:
- Review your online banking portal to ensure the transaction is not still pending.
- Understand how long it should take. Different methods, such as Interac e-Transfer or wire transfer, have varying processing times, from seconds to several business days.
- Be aware that transfers can be delayed due to the bank's verification process, which is a necessary security measure to protect against fraud.
- If using Interac e-Transfer, ensure the recipient has answered the security question correctly, as incorrect attempts may cause delays.
- If you find one of the transfers you have sent hasn't gone through, make sure to check if you've entered the right details, as this will no doubt cause delays.
Resolving incorrect transfer details
Accurately entering transfer details is essential to prevent transactions from being misdirected or rejected. To resolve issues with incorrect transfer details:
- Always double-check the recipient's details before confirming a transfer.
- If you notice an error after initiating a transfer but before the recipient accepts it, you may be able to cancel or update the details if you act quickly.
- If the transfer has been completed but to incorrect details, contact the recipient to resolve the situation, as they may need to return the funds.
- If you are unable to resolve the issue with the recipient, contact your bank's customer service for further assistance. They may help in retrieving the funds or providing next steps.
Picking the right method to transfer money
When transferring money between banks, particularly from Canada to other countries, it's pivotal to select the right method that balances cost, speed, and convenience.
Different methods may benefit various transactions, depending on whether they're domestic or international.
For example, Interac e-Transfer is a popular method for sending money quickly and securely across different banks within the country. It wouldn't be good for international transfers, though.
This service allows customers to send funds using the recipient's email address or mobile phone number. For smaller transactions, this is my go-to resource.
As time has gone on, more and more banks have gotten more flexible when it comes to the limits they'll allow people to send as well. It makes sending $1000 or even $2000 a breeze.
For larger or recurring transactions, customers may set up electronic funds transfers by linking external accounts, a process that requires the banking information of both the sending and receiving accounts.
If you're looking to transfer large amounts of money and need to do it all at once versus multiple daily transactions via E-Transfer, this is the likely route you'll go.
On the other hand, if you're simply looking to pay a utility bill or your mortgage, a pre-authorized debit (PAD) is typically a solid set-and-forget option.
It is important to be aware of any potential fees and transfer limits associated with different methods of money transfer. As I mentioned earlier, some banks provide free Interac e-Transfer services, while others charge a fee for the service.
How can I send money from Canada to the USA?
For sending money from Canada to the USA, one commonly used option is an international wire transfer through a bank. Banks typically necessitate a SWIFT code to process these transactions, ensuring the funds reach the correct destination.
Alternatively, money transfer services specialize in cross-border transactions, often with competitive rates and sometimes even offering services with no fee.
I also utilize PayPal a lot for my business to pay US or international-based vendors.
Using third-party money transfer apps
Third-party money transfer services such as PayPal offer convenient ways to send money between banks. These services often provide a user-friendly mobile app, streamlining the process significantly.
However, users should be aware of the fees that might apply and how exchange rates are handled for international transfers.
Understanding transfer limits and regulations
Transfer limits can vary significantly between services. For example, Western Union may allow larger transfer amounts compared to bank-imposed limits.
Users must also stay informed about regulations from entities like the Canada Revenue Agency, which could impact reporting requirements for larger transfers.
Domestic vs international transfers
Domestic transfers within Canada are often expedited through the Interac e-Transfer service, widely available through Canadian banks and credit unions. This method is well-regarded for how fast it is.
In contrast, international transfers involve additional considerations, such as currency exchange rates and international wire protocols, which can influence speed and cost.
Does Canada have Zelle?
Canada does not currently have Zelle, a popular American digital payments network. Canadians need to look for alternative services that operate within the country, such as Interac e-Transfer, which is widely supported by Canadian banks and financial institutions.
Is Cash App available in Canada?
As of the knowledge cutoff in 2023, Cash App is not available in Canada. Canadians need to explore other services that specifically cater to their region for sending and receiving money.
What is the Canadian version of Venmo?
In Canada, an equivalent to Venmo is not directly available. However, Canadians utilize Interac e-Transfer for quick and convenient money transfers, which is a service integrated into most Canadian banking systems, allowing for easy peer-to-peer payments.