Wire transfers are one of the most popular ways to move money from one bank account to another worldwide.
Unfortunately, they are also one of the most expensive ways – especially for those who use them regularly.
Wire transfers cause customers to pay high fees, which don’t take long to rack up into significant amounts of money.
Customers deserve to know where their hard earned money is disappearing to, so we have decided to take a look at why wire transfers can be so expensive.
We will show you what fees wire transfers really cost you to send and receive money. But, more importantly, we will show you how to avoid them.
The following are the fees that you can and will be charged by banks when you send a wire transfer, some of them more hidden than others:
Regardless of how much money you send by wire transfer, banks will always charge you a minimum fee. These fees can be very expensive if you are sending a small amount of money, and the more you send, the more the fee increases.
These are like shipping fees for your money. The more banks that handle your transfer, the more it will cost. When sending money internationally, banks that do not have a direct relationship with each other will charge high handling fees.
Some banks may have no relationship at all, meaning a third intermediary bank may become involved in the transfer process to ensure its success – this, again, means more annoying fees for you, and the receiver, since each bank in the chain would take a slice off your transferred funds in order to protect their fees.
It’s not always just the person sending a wire transfer that has to pay unnecessary fees for it. Some banks may charge the receiver a fee too, especially for an international transfer. This is commonly also known as an inward remittance fee or handling fee.
These fees are never disclosed upfront and can end up as a nasty surprise, resulting in conflict between the sender and recipient, who expects to receive the full amount invoiced, net of any fees.
Foreign Exchange Commission
With a lot of international transfers, two different currencies are involved – your domestic currency and a foreign one. The exchange rate is the value of the domestic currency for the purpose of conversion to the foreign one, and is is determined by the foreign exchange market.
Currency exchange rates are always changing due to the continuous trade between buyers and sellers, and might vary slightly from one financial institution to another. So, when you enter your local bank branch, the rates you see on their board are never the true foreign exchange market rates on that day. They are always higher, because of additional variable fees that the bank is charging are included.
The branch would normally pad up the rates to insulate themselves from any fluctuations between converting your funds and them being able to carry that trade to the foreign exchange markets. This is largely in part due to the inefficiency of the banking systems which are not fully interconnected, and you end up paying the price.
Payment Method Charges
If you are paying for a wire transfer by credit card you could end up paying additional fees. They are usually around 3% to 5%, depending on your card and your bank’s policies.
This is a fee charged on wire transfers that does not change. It can be quite a high charge when sending a wire transfer, and would most likely only offer some form of savings when sending a very large transfer.
How Much Do Canadian Banks Charge?
Here we’re going to take a look at the rates charged by 3 of Canada’s Big 5 banks.
The cost for wiring money transfers with CIBC Bank is reliant on the amount you are sending; for example:
- Any amount $10,000 or less = $30 service fee
- Between $10,000.01 and $50,000 = $50 service fee
- •Any amount greater than $50,000 = $80 service fee
If you are wiring a transfer to be received at another CIBC branch, there is a receiving fee of $15, regardless of the amount being sent.
The cost of making wire transfers through Scotiabank can be a little confusing.
They charge a percentage cut of 0.15% from your total payout but have a minimum charge of $25 and a maximum of $100.
For example, say you are sending:
- $1000 = it should be $11.50 in service fees but is increased to $25 because of the minimum limit.
- $25,000 = is a $37.50 service fee; it doesn’t change because it’s between $25 and $100.
- $150,000 = should be a $225 service fee but is lowered to $100 because of the maximum limit.
When wire transfera are received at a Scotiabank branch, recipients are subjected to a $15 handling fee.
TD Bank charges anywhere between $30 – $80 per transfer within three specific intervals. The more money you send, the more they will charge you.
- Any amount that’s $10,000 or less = $30 service fee
- Any amount between $10,000.01 – $50,000.00 = $50 service fee
- Any amount above $50,000 = $80 service fee
If you’re sending an international transfer to another TD branch, the incoming wire transfer fee is $17.50.
If you’re wiring money to an alternative bank or provider, this amount is dependent on their own policies.
What’s The Best Alternative To A Wire Transfer?
The best way to avoid wire transfers and their fees is to choose one of the many new digital ways to securely send money online.
Using a Money Service Business (MSB) is the best way to send and receive funds internationally (as well as domestically). One such business would be REMITR.
Our service allows users to send and receive money 24/7 in 150 countries worldwide, all with the best live exchange rate, no matter what the currency.
Using REMITR eliminates high fees and guarantees you savings – charging a flat fee as low as $5!
There are no sneaky receiver fees involved either when you register for REMITR Collect, you will receive a free REMITR Global Account, and receiving payments into this Global Account is free!
So, if you’re sick and tired of paying hefty wire fees, get in touch with REMITR today.