Here’s a step-by-step guide on how to transfer USD from Paypal to a USD bank account in Canada. This is for if you get paid US dollars through Paypal but live in Canada (and have bank accounts in Canada), and if you want to KEEP your US dollars intact as US dollars.
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How to Paypal Transfer USD to a Canadian Bank
This post is for you if you don’t want be at the whim of currency conversion and exchange rates, or Paypal’s very high conversion rates (like 2.5% rates). This post is for you if you like to keep your US dollars intact so you can transfer them to your online brokerage in US dollars to buy US equities, for example. Or if you have a US dollar credit card and you shop online or you go down to the US often.
Paypal is notorious for their high fees when you transfer USD from Paypal.
I try to keep as little money in the account as possible as I have read about stories where Paypal just shuts your account down for no reason.
I have been using my RBC USD High Interest eSavings Account for over 8 years to receive money from PayPal in US dollars. It had worked until a recently and then I had to figure something else out.
This post may contain affiliate links. See genymoney.ca’s disclaimer for more information.
The Problem With Paypal
The problem with Paypal is that if you have a Paypal Canada account, you can technically only get paid through Canadian banks in Canadian dollars.
Canadian banks use something called a ‘transit’ number whereas US banks use something called a ‘routing’ number. Even most US dollar accounts based in Canada do not have routing numbers, except for the Royal Bank Paypal loophole which was what I was using for many years.
What’s the Royal Bank Paypal loophole? For the Royal Bank US dollar High Interest eSavings account, if you added the routing number 026004093 and your US dollar account RBC bank account information, Paypal would verify it and it would work.
You see, only banks based in the United States have a routing number, but The USD eSavings Account is based out of Canada. Somehow, though, that routing number still corresponded to the US dollar eSavings Account.
Closed RBC US Dollar Account Loophole
In recent years though, I guess the loophole closed, and I had no idea. Everything was working fine, until recently, when I tried to transfer USD from Paypal, the money bounced back. The money got redeposited back into Paypal after a few days.
I didn’t think much of it, but then realized that Paypal was deducting a $20 USD fee each time it got bounced back.
The definition of insanity is doing the same thing but expecting a different result, so I tried to withdraw a few times (namely three) and it bounced back each time. I managed to message customer service from Paypal and they informed me that this fee is called a Foreign Withdrawal Return Fee.
Even though I had the US routing number that I inputted many years ago, they were recognizing the bank as a foreign bank (a non-US bank) and the money wasn’t getting transferred. I called Royal Bank and they said nothing was wrong with my account.
Anyway, after a bit of digging around, I managed to fix things by opening up an actual cross border US dollar RBC account based out of the United States….not jut a Royal Bank US dollar account based in Canada.
So without further ado, here’s a step by step guide on how to withdraw US dollars (intact without currency conversion) from Paypal, without getting dinged any fees from Royal Bank or Paypal.
Get a RBC USD Account: US High Interest ESavings Account
If you already have a RBC US High Interest eSavings Account, you’re in luck. Just skip to the next step.
If you don’t (or don’t have any accounts already open to Royal Bank), you’ll have to go to the branch in person and bring two pieces of photo ID to open up the RBC US High Interest eSavings Account. Ask to set up online banking for this account and note your account number when you receive the information.
Given the current circumstances, you might be able to open an account without having to go in person to a physical branch through the online application here.
As a recap, the RBC US high interest eSavings account is:
- Free
- No minimum balance
- Allowed one free debt per month
- Unlimited online transfers between this account and other RBC accounts
This MIGHT still work without having to get a cross border account. You can test it out to see if it does. Take out your transit number and just include your account number. If the deposits go through, then you probably don’t have to open up a US based account.
It just stopped working for me and then I had to proceed to the next step below.
Related: Best No Fee Chequing Accounts in Canada
Get a RBC Bank Preferred Money Market Savings account
After you have an RBC USD high interest eSavings account, you can call Royal Bank at their Cross Border Banking number 1-800-769-2553 to add the RBC Bank Preferred Money Market Savings Account.
They have Cross Border Specialists who can set it all up for you over the phone.
Unfortunately this account doesn’t qualify for a free iPad or Apple iPods from RBC though!
Setting up the Money Market Savings Account took only 20-30 minutes over the phone. The friendly and knowledgable representative from Royal Bank in Georgia set me up with an account number, online banking access, and informed me of the routing number for this account.
A few weeks later, I got sent some documents to sign (Personal Signature Card and a W-8BEN form) and return in the mail and then you will receive your debit card.
The RBC Bank Preferred Money Market Savings Account is based out of the United States (Georgia).
The RBC Bank Preferred Money Market Savings Account is:
- $0 monthly (free) as long as you maintain a $1000 minimum balance
- You also have to have $1000 as a minimum to open this account
- You can do 6 debits/ month for free
- FDIC insured up to $250,000 per ownership category
- You can use cheques (checks haha) for your US purchases
- Transfers money from the RBC US Based account to the Royal Bank US dollar account instantly online (there’s a toggle button when you log into your Canadian portal to switch over to the US banking)
- Transfers to your RBC US eSavings account are free
- Can get cash (no charge) from 50,000 ATMs in the United States
- Available from a single sign in with RBC online banking (just click the link to toggle back and forth)
- Free eStatements
- You get a free debit card that you can use where Visa credit cards are accepted.
Here are the rates for the Money Market Savings Account. As of writing, it is 0.20%.
Alternately, you could get the Direct Checking U.S. Bank Account. This US dollar account is $39.50 USD for an annual fee. Right now there is a ‘first year free’ promotion if you sign up with a Visa Signature Black U.S. Credit Card. The Direct Checking U.S. Bank Account includes 10 debits a month.
Personally I don’t like paying an annual fee and would rather have a minimum amount in there to waive the fee.
EQ Bank recently announced an EQ Bank US Dollar Account that offers a high 3.00% rate for your US dollar deposits as of writing and free transfers between Canadian US dollar accounts. You have to have a EQ Bank Savings Plus Account first. It is $0 minimum and no monthly fee.
Go to Paypal.com And Verify The RBC (Georgia) Bank
With the Preferred MM (Preferred Money Market Account), you’ll get a routing number and account number immediately if you have access to the RBC US high interest savings account already. They will mail you a debit card you can use for travel in the United States or when you’re making online USD purchases in Canada.
- You can find this by clicking on the Preferred MM link (once you log into your RBC Banking account).
- Then click on Account Details
- Then note the routing number of 063216608
- Note your account number
Then go to Paypal.com:
- Click on settings (beside the log out button)
- Click on Account Settings
- Click on Money, Banks, and Cards
- Click Link a New Bank Account, Click Royal Bank of Canada
- Scroll down and click on “Link a U.S. Bank Instead”
- Enter your new routing number and account number details
- Make sure you click on ‘savings’
- Paypal will send you two small micro deposits in a few business days
- Once you see the micro deposits, log back into Paypal and then click on ‘verify’ beside the Royal Bank (GA)
Now you’re all set to withdraw money from Paypal and deposit it to your Money Market Savings Account.
Once it’s in the Money Market Savings Account, I transfer it to my Royal Bank US dollar eSavings account in Canada (the transfer is instantaneous). Then I can withdraw it at a Canadian ATM or go to the bank and withdraw US dollars, or I can fund my discount brokerage with US dollars to invest in US stocks.
Withdrawing from Paypal Tips
One thing I recommend doing before you transfer USD from Paypal is to use small increments first. Once you get your verification, you should be set to withdraw cash. Withdrawal of a smaller amount for example, five dollars is helpful to test whether it works, first.
Another thing to note is to make sure your Paypal address matches your bank account address. The bank will reject the withdrawal from Paypal if the addresses are incorrect and Paypal will charge you a fee for a bounced bank bank deposit. For example, if your Paypal address has a PO Box and your bank address on file doesn’t your withdrawal will get rejected.
Yes, this happened to me but Paypal customer service could not tell me this or identify it. I figured it out after scouring the Internet.
Alternatives to a US Based Canadian Bank Account
If the option of opening up another bank account let alone a new bank account in the United is too overwhelming, there are alternatives to consider when trying to withdraw money that does involve currency conversions.
These are alternatives to transfer USD from Paypal:
- One alternative is to use Transferwise. They have mid-market rates and charge you a low fee for using their services. You then transfer money to your Canadian bank account.
- Take the Paypal currency conversion rates and transfer to your Canadian bank account
- Other banks may offer cross border banking too and setting one up with them (similar to this) would be very similar if you don’t want to open up an account with a new bank.
Hopefully this post helps you figure out how to transfer USD from Paypal to your US dollar bank account.
Paypal’s high fees are painful so this should help decrease that.
You may also be interested in:
- Business bank account promotions in Canada
- Tangerine Joint Account Review
- T1135 Form
- Content creator Tax Deductions in Canada
How to you transfer USD from Paypal to a USD bank account in Canada?
GYM is a 30 something millennial interested in achieving financial freedom through disciplined saving, dividend and ETF investing, and living a minimalist lifestyle. Before you go, check out my recommendations page of financial tools I use to save and invest money. Don’t forget to subscribe for blog updates, a free dividend yield spreadsheet, and the free Young Money Bootcamp eCourse.
Ha, I see you finally got on this =P
@Barry C- Hah, it’s been great, so easy to transfer, I feel extra cool to have a real US bank account.
Cool useful to know. I guess this way you can eventually apply for a US credit card too.
Definitely puts GYM a few steps away. I’m also at the same stage but I just couldn’t be bothered to deal with USD cards
@Tawcan- Ahh you mean for travel hacking! I was wondering what you were talking about (because you can get a USD credit card easily without opening a US bank account). I briiiefly looked at it and you have to get an ITIN (Individual Taxpayer Identification Number). Would certainly be something to think about but looks like a bit of work.
https://www.nomadicmatt.com/travel-blogs/how-to-be-a-travel-hacker-in-canada/
This is great :)! Thank you for explaining it in such a concise, easy to understand way!
@AnotherLoonie- Glad you liked it!
This is something I’ve been looking into since I received my first USD affiliate income. Thank you for outlining it so clearly. This article was SO needed! Everything else that’s out there is old and mostly outdated.
@Chrissy- Glad you found this useful!
Saving this for later as I’m not (yet) at the level to have $1000USD sitting around (or earned in my paypal account) so waive the banking fees for this.
@Maria- Hope this is helpful for you later on 🙂
When were you able to get this to work? I thought this stopped working a few years ago…
Emil- For me, using the RBC USD account based in Canada stopped working recently (like a few months ago) and I think maybe they caught on somehow. Then I fixed the problem by adding the US based account in Georgia.
Has anyone actually (successfully) tried the RBC Cross-Border package method above? Here again is the link to this package (USD account and USD Visa), essentially waiving the first year’s fees (offer ends October 31, 2020):
http://www.rbcroyalbank.com/dms/cross-border-banking/index-i-or.html
Besides not having to pay the usual annual fees, you get the coveted US-based RBC bank account (Atlanta, Georgia) that would be required to transfer your USD out of PayPal. Is there a catch though?
I tried the RBC USD eSavings account method, which worked twice as far as waiting for the micro-deposits. Those two “test” deposits never showed up and the RBC account was automatically removed from my PayPal list each of those times. On my third attempt (and all subsequent attempts), I get the “We’re sorry. We’re not able to process your request right now. Please try again later.” message. Upon speaking with a few PayPal reps, apparently RBC is considered a “security risk”. Not sure if that’s just for my PayPal account or right across the PayPal network. Hopefully, not the latter. Another PayPal rep told me to wait at least 48 hours to see if an automated security block will clear itself. I was also told to clear my browser cookies and cache or even try a different browser.
Anyway, this PayPal restriction is such a hassle. Just wondering if the RBC Cross-Border package above solve anything. Also, I have a TD Canada Trust profile and they have US branches. Anybody have luck getting PayPal US funds out via TD Bank?
@Ricardo- The US TD Account works as well (similar to this RBC bank account based in Georgia) but I’m not sure what the account details are and if there is a minimum balance needed. Sounds like you probably need to try the Georgia account to get Paypal to pay.
Note: Possible PayPal micro-deposit loophole method below (read on)!!!
So, genymoney above was correct (at least for me), creating a TD Bank NA (US-based) account works, especially if you already have a TD Canada Trust (Canada) Borderless $USD account. I must note, I did not see a completely free way to do this via TD, unless you open a TD Bank “Convenience Checking” account which requires a minimum balance of $100 USD to waive the $15 USD monthly fee. There is also a TD Simple Savings account whereby you need a minimum balance of $300 USD to waive a $5 USD monthly fee. Careful, there may be tax implications if you open an interest-bearing US-based savings account! You have 30 days upon setup of these accounts to deposit the minimum balance with TD.
Now, for that PayPal loophole method that may also apply to the RBC USD eSavings account (based in Atlanta, Georgia). Once you create whatever US-based bank account and have the routing number and account number, follow these steps:
1. Link the US-based account to PayPal using the “Link a U.S. account” option. I did not need to enter an TD institution number or branch transit number. Just the routing number and account number as it would appear on a US check. Select “Checking” or “Savings” type that matches.
2. Hopefully, you are able to get to the stage where PayPal tells you it is sending the two micro-deposits in the next 3 to 5 business days. If so, immediately do an actual USD fund transfer (using your USD PayPal money) from PayPal to that “pending” US-based account. I suggest a small amount like $5 or $10 USD.
3. If you have entered the routing number and account info correctly, you will see your $5 or $10 successfully transferred in about 1 to 3 business days, but PayPal’s test micro-deposits ($0.02 or $0.04???) might fail! Eventually, PayPal will remove that “pending” account from your list of linked accounts if those micro-deposits failed.
4. If those PayPal micro-deposits show up, lucky you and go ahead with entering those amounts into PayPal’s verification system. However, if they are “rejected” by your US-based bank (this is what happened to me), don’t fret because…
5. Since you have a successful $5 or $10 transfer from PayPal to your “pending” US-based account, you now have a Transaction ID in your PayPal history with which you can contact PayPal Customer Service and have the US-based account manually verified by them! In PayPal, go to Activity, click on the successful transaction and copy the Transaction ID number.
6. Use their online “Message Center” to contact Customer Service. Don’t bother with phoning them. You will be on hold forever and eventually automatically disconnected because they recommend the Message Center anyway. Look for the “bell” icon at the top of the PayPal website. Click that, then “Inbox”, then “View Messages”.
7. Click “New Message”. The automated PayPal Assistant will ask what you need help with. Type “Link bank account”. Eventually you’ll get the option to chat with an agent. Click “Yes”.
8. Paste the successful Transaction ID as your “proof” that your US-based account exists, received money successfully and that you just need help to re-add and manually verify that bank account.
9. Depending on how many agents are available, you may wait either seconds, minutes or hours between chat replies! The crucial part though is that whatever agent you get will want to send 6-digit verification codes to your phone (or email?) so that you can prove you are the account owner. These codes expire after 10 minutes. So, you might need to have email / PayPal notifications turned on so you don’t miss this window.
10. Be sure to refresh your PayPal once the agent “verifies” your US-based account. It took me a couple of tries while I had the online agent unlocking the account, re-adding it and verifying it. You should see a “Confirmed” status next to your re-added US-based account!
Ironically, once I successfully added my US-based account, PayPal’s micro-deposits showed up (and haven’t yet been withdrawn)! Yay, a bonus $0.06 USD for my troubles, haha!
Lastly, some caveats:
When opening the TD Bank NA (US-based) account, I had to go to a Canadian TD Canada Trust branch to fill out the application (on their iPad). The bank representative may have access and clout with the US counterpart to make account creation easier. You will get an email confirming the account is created that very day. Book an appointment. Linking the US-based TD bank account to your TD EasyWeb login for easy USD transfers is also possible. Ask the bank representative about that.
If you go for the TD Bank USD Convenience Checking account, even though this is for “personal” use, TD communicates to PayPal that this is a “Business Checking” account. This might be why PayPal’s micro-deposits fail in general. There is no way to specify this “business” detail when linking a “Checking” account in PayPal.
The last caveat is that you may receive a “W-8BEN” I.R.S. tax form in the mail. No need to panic. This is standard US bank industry compliance. Since you are a Canadian resident, you will need to pay attention to Box 6 “Foreign tax identifying number”. Write your Canadian S.I.N. number there. Fill out the rest of the form as needed and mail it in (US postage required). If you want to avoid cross-border tax issues completely, I’d suggest that the US-based account you open is non-interest bearing (ie: TD Bank Convenience Checking). So, open a checking account, not a savings account!
You can usually close your US-based bank account for free once you no longer need it for these USD PayPal transfers. Check with the bank that no fees are charged when withdrawing all funds to Canada (including minimum balance) and closing the account. I don’t believe there is such a thing as having the account open for a “minimum amount of time”.
Sorry for the long post, but sometimes the devil is in the details! Hopefully, these ideas will work for others also. Please post your success or failure if you try the ideas above.
Cheers!
@Ricardo- Thanks for the mega comment and the great in depth details!! Haha, congrats on the bonus $0.06USD for your troubles! Yes, I got the W-8BEN and filled it out as well. RBC walked me through it via email quite nicely as well.
Just a question out of curiosity. How/why are you getting money put into your PayPal account if you’re in Canada? Is a “gig” type job that paid you in USD? If so, why get paid into PayPal and not in a regular USD bank account from the US?
I understand why PayPal is used, for example, as an alternative to using a credit card for enhanced security reasons, but why are you getting money deposited into your PayPal account to begin with?
Pardon the ignorance.
@Moneyhelp- Great question 🙂 The display advertising on this blog is from a US company and it is paid out in US dollars.
Hi @moneyhelp,
In my case, a convention I was supposed to attend was cancelled (due to COVID-19) and the organizers used a third party service to issue refunds. Since the third party didn’t have my credit card info that was used to pay for the convention, they were only offering refunds via PayPal.
Yes, there are online gigs that might pay through PayPal. I’ve also heard of US citizens working in Canada that may wish to be paid in USD via PayPal. I’m sure there are other scenarios requiring the solutions offered above.
my paypal account does not have any of those options listed. A paypal rep told me it was because the email was a canadain email address. Any suggestions?
@Anonymous- Hmm did you make your account type business? And do you see “Transfer Money” underneath your Paypal balance?
does your paypal account need to be a business one for this to work?
@Anonymous- Good question, I’m not sure. Mine is a business Paypal.
Thank you so much, I’ll definitely try this out at some point. Was desperately looking for a solution to access the money in my paypal account which is linked to my usd based ecommerce site. Was shocked when I couldn’t just connect it to my RBC usd account
@Dak- You’re welcome. Good luck!
I’m interested in the Direct Checking U.S. Bank account bundled with the Visa Signature Black U.S. credit card alternative you mentioned. If I could use the Black card as my card to pay off expenses on my e-commerce site, then I can get rid of the restricted $USD RBC business card I’m using now, and free up $1500 in the GIC thats required to have the card.
Is the Direct Checking U.S. Bank account (which will cost $40 USD annually) able to connect with a USD paypal account in the same manner as the Preferred Money Market Savings Account?
@Dak- I’m not sure, but I have the RBC Bank Debit Visa which I can use like a credit card attached to my Preferred Money Market Savings Account.
So I went with the Direct Checking US bank account and Visa Signature Black US credit card bundle with RBC Bank in the US, and it worked like a charm! Paypal sees the RBC bank account as a US based account (which it is) completely separate from my Canadian Royal Bank USD account, and transfers money to it without any extra fees, everything in USD. From there I can log into RBC Bank and and transfer the money to my Royal Bank USD high interest eSavings account. This is a cross border transaction, but again there are no extra fees. And then I can do whatever I want with the money in my eSavings account, as it’s a Canadian account. Also I have a personal paypal account, not business. It made no difference. Hope you find this helpful!
@Dak- Thanks for sharing!
why not just open a Direct Chequing account with RBC us
@Bob- The Direct Chequing Account has an annual fee I believe “of $39.50 USD with eStatements or $59.50 USD with paper statements” after the first year.
The PayPal Canada User agreement provides that withdrawing funds in currency other than CAD cannot be done. Only through conversion. Period.
@Kik- here’s a quote from the PayPal forum
https://www.paypal-community.com/t5/Transactions/Move-USD-from-PayPal-to-USD-account-in-Canada/td-p/1816785
Welcome to our Community Forums! Transferring USD out of Canadian PayPal accounts can certainly be a bit confusing. I’ll be happy to help out here.
You can transfer USD out of a Canadian PayPal account, you just have to make sure it’s being transferred to a US bank account. You have the ability to add both Canadian and US bank accounts to your PayPal account.
Canadian bank accounts are added with an account, institution, and transit numbers. When withdrawing funds to a Canadian bank, the funds will be sent out as CAD, even if they are available as USD in your PayPal account.
US bank accounts are added with an account and 9-digit routing number. When withdrawing funds to a US bank, the funds will be sent out as USD.
I hope that clears it up!
– Jon K
Thanks, I’m trying this at the moment and will report if it works or not. I noticed your comment about the PayPal address needing to match the address on the US RBC in GA bank account. But I couldn’t find anywhere in PayPal where to view or enter my address. Can you elaborate on that please?
@Abe- In the business Paypal account, it is under “Account Settings” then “Account Owner Information” and there you should see the address.
does this still work? is your paypal account canadian or US based not sure if makes a difference?
@mike- Yes it still works, I receive USD in my Paypal and transfer to my USD Royal Bank (Georgia) account regularly. My paypal is Canadian based.
So i made the cross border US bank account, went to add US based bank account, and i keep getting error ” cant verify its you” any suggestions ? do I need to have like same phone number eveything matching?
@Anonymous- Did you call the 1-800-769-2553 Cross Border specialist number? I had to talk to someone to get it set up, the bank account from the US side will say “Royal Bank Georgia”.
ive actually went with bmo harris US based acc, because I saw on another forum that works aswell only thing is when I try to link it to my paypal, ”says cant verify its you”. I tried contacting paypal and they said cant link a US bank acc wth a canadian paypal account, when I know ppl are doing it and it says u can on paypal.com. Did u use a US address to match the paypal account? anything else has to match? I know you mentioned po box in your thread.
@Anonymous- Hmm This is the Paypal website I use: https://www.paypal.com/ca/home and it’s a business account. They actually recently asked me to change it from a PO box to an address, but I did not use a US address.
yes i use the same thing, paypal canada. So what I did was with bmo I first created the cross border US based bmo harris account, but I still didnt create the BMO canada Usd account, do you think this could be why its not letting me link? I dont see why it would matter though since first I have to link the US based acc to paypal right? I did speak to a paypal rep who knew a little bit more about the matter and he did tell me the loophole did close around the time of covid so maybe you linked your bank acc before than thats why it works for u.
@Anonymous- Interesting! Maybe, because I have a USD Canada account as well.
tried rbc now with canada USD account and the cross border and cant link either just doesnt work for paypal
@Anonymous- Did you try the routing number mentioned in the post for RBC USD account? I clicked around in Paypal and it does have the steps “link a US bank account instead” still.
yes, well first I cant even get the rbc USD canada acc linked, i think they mightve patched it and it is working for u because you were able to link it before they closed the loophole, I tried linking it by logging in through online banking, and it says ”cant verify info”, how did you link your canada USD account first? was it manually or going through the online banking login option paypal gives you?
@Anonymous- I linked it through the same process outlined in this post. I also linked my Canadian bank account too. So Paypal is linked to Canadian, USD in Canada, and USD outside Canada.
Is this patched? I got an email saying RBC declined the micro deposits..
@Anon- If you get an update, please share, thanks!
Tried TD US, keeps getting “We’re sorry. We’re not able to process your request right now. Please try again later.”
Called paypal and they say there’s no way that Canadian accounts will be able to link to a US bank.
@Keb- Hmm maybe they discontinued it, but the main thing is to get cross border banking, and a US bank account based in the US. Maybe check out this reddit thread: https://www.reddit.com/r/PersonalFinanceCanada/comments/swvx4s/how_to_transfer_usd_in_paypal_to_td_us_chequing/