Moving the dough from here to there

May 22, 2012 12:54 PM

What is a cheap yet secure way to send money from Canada to the US on a regular basis?

I live in Canada. I would like to send money to a family member in the US monthly (about $200/month). What’s the cheapest way to do this? PLEASE NOTE this person is older and does not own a computer or have an email address, nor are they willing to get/use these things. Therefore PayPal/email type transfers are out of the question unless I can get the money into their account without them having to do anything except go to the branch.

Options I have considered:

- Getting a bank cheque from my Canadian bank and mailing/FedExing it (bank exchange rate plus postage costs)
- Wire transfer from my bank to their bank (bank exchange rate plus $30 fee – total $34)
- Western Union (terrible exchange rate plus $20 fee – total $33)
- Transferring money online from my Canadian account to my family member’s US account (not possible since the banks’ systems do not talk to each other)
- Opening an account in a Canadian branch of a US account (e.g. HSBC) and then doing the above (assuming HSBC talks to their bank)
- Opening an account in a Canadian branch of a US account (e.g. HSBC) and asking my family member to open an HSBC account as well (assuming HSBC does NOT talk to their bank)

Of course I know the absolute cheapest way is to exchange cash at my bank and mail it by regular mail, but I am looking for something more secure. At the same time, since I will be doing this regularly, I’d rather not pay $30 in fees on a $200 transaction. Is there anything I’m not thinking of?

posted by yawper to work & money (15 answers total)

unless I can get the money into their account without them having to do anything except go to the branch.

Yeah, just do this. Sent up a PayPal account for their bank account and transfer it in yourself.
posted by Brandon Blatcher at 12:59 PM on May 22, 2012 [4 favorites]

Brandon, do you mean...set up an email address and Paypal account for them, and use my Paypal account to transfer money into theirs? Basically I do both the sending and receiving for them? This is actually kind of brilliant.
posted by yawper at 1:02 PM on May 22, 2012

Yes, exactly. Seems simple for all involved.
posted by Brandon Blatcher at 1:04 PM on May 22, 2012

Here is a Q&A dealing with the issue, which includes at least one possible solution.

The paypal solution looks like it will work and be quite easy--do note that paypal will charge something like 3.9% per transaction plus $0.30.
posted by flug at 1:18 PM on May 22, 2012

I have used xe.com for international money transfers for a few years and it has always been easy, reliable, and cheaper than Paypal. They will electronically transfer into the US account. Can't verify on the Canadian side. I don't know whether they care that the accounts belong to a different person on each end.
posted by sesquipedalian at 1:38 PM on May 22, 2012

The paypal solution looks like it will work and be quite easy--do note that paypal will charge something like 3.9% per transaction plus $0.30.

You can get around this by clicking the "Personal" tab on the Send Money screen -- choose "Gift" or "Payment Owed". There's rarely a fee, and if there is it's usually only a few cents (the sender pays the fees on Gifts). The 4% fee is only for transactions involving goods or services.

Note that this only works if you connect the sender's Paypal account to a bank account. They'll charge a fee if you send money from a credit card.
posted by vorfeed at 1:39 PM on May 22, 2012

RBC has a US subsidiary bank that you can open an account with. If you have an RBC account (or are willing to open one), then transferring money into the US account can be done via online banking (at no cost with a not-great, but not-terrible exchange rate). If you opened this account in joint with your family member, they could have a debit/credit card for the account and use it to withdraw money via ATM at a small cost or via cash advance (which counts as a normal withdrawal) or even just use the card for groceries or what have you. I think the US account has a $3 monthly fee, otherwise the only cost would be for ATM withdrawals if desired. Obviously, this would be a lot of hassle in the short term, but makes things fairly easy in the long term. I think there used to be another Canadian bank with a similar setup, but I'm not sure if this is still true.
posted by ssg at 1:41 PM on May 22, 2012

There are other choices instead of western union. RIA is only 10 dollars for up to 500. It works the same as WU.
posted by Iax at 1:45 PM on May 22, 2012

Does the person use ATM or debit card? Set-up separate account (in Canada) to which you move the money and let her withdraw/ spend it with debit card.
posted by zeikka at 1:51 PM on May 22, 2012 [1 favorite]

I think xe.com is probably your best bet. I'm pretty sure that once you've set them up as a recipient, you can just deposit money in their account without them needing to do anything at all. They will also mail checks if needed, but this can take a long time.

let her withdraw/ spend it with debit card

Canadian debit cards don't work in as many places in the U.S. as you might think. For instance, a TD Canada Trust debit card works only at NYCE debit terminals.
posted by one more dead town's last parade at 2:04 PM on May 22, 2012

RBC has a US subsidiary bank that you can open an account with.

Like ssg says, most of the big Canadian banks will let you open USD accounts. You can then just write a USD cheque and mail it to your relative.

You keep mentioning HSBC...do you bank with them? Not sure if they offer USD accounts. I'm sure they can tell you if you ask.
posted by wutangclan at 3:05 PM on May 22, 2012

USD cheques written from a Canadian institution won't work. They can take up to 30 days to clear on the US side.

I am skeptical that the RBC solution cited above will work. Canadian banks and US banks have totally different routing numbers and totally different ways to electronically deposit money. This is why you can't direct deposit a US pay cheque to a Canadian bank account in USD, the routing numbers are incompatible. I would be surprised if you could transfer money seamlessly as well.

I would go PayPal.
posted by crazycanuck at 9:17 PM on May 22, 2012

Thanks everyone, very helpful answers. I am going to try the PayPal option but will keep some of these other ideas in mind (xe.com in particular looks like a promising alternative). I do bank with RBC in Canada and forgot to mention the US account option mentioned by ssg and wutangclan. But yes, the cheque takes way too long to clear and my family member does not use debit cards, so I ruled that out.

Wutangclan, I only mentioned HSBC as an example of a US bank that has branches in Canada (there aren't that many).
posted by yawper at 4:54 AM on May 23, 2012

Just to be totally clear about RBC US accounts: all Canadian banks, including RBC will let you open an account in US dollars, but RBC also offers the option of a bank account with their US subsidiary, which is a US bank (it is called, ridiculously enough, RBC Bank (Georgia)). This is the same as any other US bank. RBC Bank (Georgia) actually offers free transfers to any other US account. I've never used this myself, but it looks like exactly what you need.

I have both a US dollar account in Canada and a US dollar account in the USA with RBC and they are completely different beasts.
posted by ssg at 11:38 AM on May 23, 2012

xetrade is what I always recommend in situations like this. I shipped money back and forth for about a year, and their rates were very fair.
posted by calistasm at 5:02 PM on May 23, 2012