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Published September 6, 2022

What Is a Wire Transfer?

A wire transfer is a secure way to send money electronically either domestically or internationally. Wire transfers may have higher fees than other forms of payment.

A wire transfer is a secure way to move money electronically within Canada or across borders. Wire transfers may not always be the best way to send money because they come with high fees and other restrictions.

How wire transfers work

A wire transfer enables individuals to send money electronically via banks and other financial institutions, rather than mailing a cheque, money order or other form of payment. Historically, telegraph wires were used to initiate these money transfers, which is where the name originated.

The two main types of wire transfers are domestic and international. A domestic wire transfer is conducted between bank accounts within Canada, whereas international wire transfers involve sending money from an account in Canada to an account in another country. While domestic transfers may take as little as one day to arrive, international transfers can take up to five days and can also come with high fees.

Wire transfers are often used to send large sums of money internationally. They can be sent through banks and credit unions, as well as other providers like Western Union. International wire transfers are available in a variety of currencies.

Some banks also offer a service called an international money transfer, which they distinguish from their international wire transfer service. Details vary by institution, but international money transfers are sometimes cheaper, though the amount of money you can send per day, week or month may be more limited.

What you’ll need for a wire transfer

Depending on the type of bank account you have, you may be able to send a wire transfer via your online banking portal or by visiting a branch in person. You can also use a service, such as Western Union, to wire money.

To send a wire transfer through a bank, you will need to provide specific financial information about your recipient, including:

  • Name and address.
  • Amount you want to send.
  • Transit number of the recipient’s bank or wire service.

Wire transfers can take anywhere from one day for domestic wire transfers up to five days for international transfers. Once you’ve sent a transfer and your money has left your account, you can’t cancel it.

Wire transfer fees

Sending and receiving money via wire transfer can be an expensive proposition. Here are some examples of wire transfer fees:

Transfer providerFee to receive wire transferFee to send wire transfer
Canadian Imperial Bank of Commerce (CIBC)$15$30 to $80, depending on amount.
Bank of Montreal (BMO)$14Communication charge of $10 plus 0.20% of the outgoing amount (minimum charge of $15 and maximum of $125 per wire).
Royal Bank of Canada (RBC)$0 to $17 depending on amount and origin of transfer.$45 or more.

When does a wire transfer make sense?

Generally, it’s easier and more affordable to use Interac e-transfer to send money domestically as long as your transfer amount doesn’t exceed your bank’s daily limits. Wire transfers make more sense when sending funds internationally, especially if you want to send a large amount of money.

Pros and cons of wire transfers

Pros

  • Secure way to send money internationally.
  • Can be set up and scheduled in advance.
  • Can send large amounts of money.

Cons

  • High fees.
  • Can take up to five days.
  • Can’t be reversed or cancelled once sent.

Alternatives to Wire Transfers

EFT vs. wire transfer

An electronic funds transfer (EFT) — sometimes called an e-transfer — is generally used in Canada only when you want to transfer money online from one bank account to your alternate bank account at a different financial institution. Wire transfers can be used to send money to other people or businesses domestically or internationally.

Interac e-transfer vs. wire transfer

Interac e-transfers (which are a form of e-transfer) can be used to send money to anyone in Canada. They are more common than wire transfers when sending money domestically because of their convenience (you only need a person’s email address or mobile number). Depending on the type of bank account you have, it may be free to send Interac e-transfers.

However, a domestic wire transfer could be more convenient if you want to send a large sum of money quickly because Interac e-transfers have daily, weekly and monthly transfer limits.

Wire transfer vs. direct deposit

Direct deposit is a method of transferring money between companies and individuals. For example, they are used by companies to automatically deposit an employee’s paycheque into their bank account. You can also set up direct deposit with the Canada Revenue Agency (CRA) to have your tax refund deposited into your account automatically. In contrast, a wire transfer is used to send money between individuals.

Frequently asked questions about wire transfer

    • How safe is a wire transfer?

      Wire transfers are generally safe because they are sent directly to a person’s bank account. However, wire transfer scams do exist. A person may get a fraudulent email telling they won a contest or lottery and then is asked to send a wire transfer to cover fees associated with the prize. Or a scammer might reach out to a person through a fake online dating profile and ask them to wire money.

    • How much do wire transfers cost in Canada?

      Wire transfer fees may range from $15 to as much as $45. Fee vary widely by financial institution, whether you’re sending or receiving the money, and how much you’re sending or receiving.

About the Author

Sandra MacGregor

Sandra MacGregor has been writing about personal finance, investing and credit cards for over a decade. Her work has appeared in a variety of publications like the New York Times, the UK Telegraph, the Washington Post, Forbes.com and the Toronto Star. You can follow her on Twitter at @MacgregorWrites.

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