Thought I would share my experience using Wise. Here’s my Wise Canada review. I had heard of Wise but hadn’t actually used it until recently. Usually receiving money through PayPal works just fine but I needed to receive money from the United States through creation of an ACH bank transfer.
I needed US account details and routing number except the problem is that I don’t live in the US. How does a ACH bank transfer work? An ACH transfer is an electronic, bank-to-bank transfer that is processed by the Automated Clearing House network. Instead of a direct wire transfer between bank accounts, the ACH network acts as a go-between.
Anyway, long story short, I signed up for a free account with Wise.
Table of Contents
What is wise Canada?
Wise is a way for people to transfer money online internationally, essentially it is a faster and cheaper way to send money abroad compared to conventional means like using PayPal and wire transfers.
Wise was founded by Taavet Hinrikus and Kristo Käärmann who basically transferred money to each other to avoid the fees. It was originally called TransferWise and then they changed the name to Wise.
Taavet and Kristo saved thousands of British pounds by transferring pounds and Euros to each other (one was paid in Euros and one was paid in pounds). They decided to create something more simple- a Global Currency so to speak, so they created TransferWise.
Wise is available in 59 countries around the world. TransferWise has 7 million users around the world, and these users transfer about 5 BILLION Euros every month. They aim to be transparent with their fees and exchange rates.
Who Would Benefit from Wise?
People that would benefit from Wise are people who work nomadically and get paid in specific currencies but live somewhere else (where they use a different currency). People like freelancers, nomadic lifestyle bloggers, digital nomads, basically my dream lifestyle before kids (hahahaha).
Also, Wise Canada works well for people who moved to Canada and work here but send money abroad to their loved ones on a regular basis. It also works well for long term travellers or people taking a year off to do travelling. Finally, it can work well for expats, let’s say you have a mortgage here in Canada and need to continue to pay it off, but you are living in London, UK and making it big as an investment banker. You are paid in British Pounds and not in Canadian dollars.
In summary, people that would benefit from TransferWise are people who have roots and money responsibilities somewhere but are growing their fruit somewhere else in this beautiful world of ours 🙂
HOw Does Wise Canada Work?
If you want to send money, it is pretty straight forward. First you create an account, it’s free.
Then you select how much you want to send. The minimum to create a US dollar account is $20 USD. However, Canadian’s cannot fund the account with US dollars, you have to fund it with Canadian dollars and then convert it within Wise.
Wise will show you a breakdown of how much in fees it will cost you. Then you add the bank details of the person you are wanting to send money to.
If you have a large transfer or if you are sending a certain currency, you will be asked to verify your identity and address by sending additional documentation, such as a photo ID or utility bill.
Here are the options on how to pay for your transfer and “fund” your Wise account:
- Direct debit
- Wire transfer
- Bill payment
- Debit card
- Credit card
Here’s what the fees are when you are adding $100 CAD:
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Then you just wait for your transfer. Wise will share with you how long it will take to complete your transfer as well.
This is what the Activity Dashboard looks like. I like that you can keep track of the activity and history of the transfers, and can export this data out easily if needed.
wise Canada Partnership with EQ Bank
EQ Bank has an International Money Transfer Calculator where you can see exactly how much the exchange would cost if you transferred money with EQ Bank. The TransferWise charge is clearly shown and you can see the exchange rate used.
Here are the differences in cost between EQ Bank and some other Canadian banks when it comes to using Wise:
Related Post: Is EQ Bank Safe? I Took the Plunge
How Do Wise Canada Fees Compare?
Wise aims to be the cheapest and fastest compared to banks and compared to PayPal. As you can see below, this is an example of sending $1000 CAD and exchanging it to US dollars. They use an optimal exchange rate and although their transfer fee is more expensive than PayPal, the exchange rate is more favourable.
The fees are much cheaper and the exchange rate is the day’s mid-market rate. The fee to transfer around $500 USD was under $3 USD and you got the day’s mid-market rate.
If you direct debit with these Canadian banks, the TransferWise fee is cheaper but the time it takes to transfer is longer. Direct debit does not work for business accounts though.
- Bank of Montreal
- Bank of Nova Scotia
- Royal Bank of Canada
- Toronto Dominion Bank
- National Bank of Canada
- Canadian Imperial Bank of Commerce (CIBC)
- Simplii Financial
- HSBC Bank Canada
- Tangerine Bank (ING Bank)
- La Caisse Centrale Desjardins Du Québec
Unique Advantages to TransferWise
As mentioned, if you can only be paid in through banking details from a different country, and you are a freelancer, TransferWise works really well because you will be able to get US banking details and a routing number. Here are some other numbers that you can get through TransferWise:
- British account number
- European IBAN details
- US account number and routing number (ACH banking details)
- Australian account number and BSB code
However, it is difficult to transfer out your USD into your USD account.
You need a US bank with US dollars and a routing number to do so. I ended up having to convert the US dollars into Canadian dollars and transferring to a Canadian dollar based bank. If you want to keep your US dollars ‘intact’ it is more difficult to do this with Transferwise than with Paypal.
The fee was very cheap, it only cost me $2.95 USD to transfer into my bank account and convert from USD to CAD and the exchange rate was excellent. This is what it would cost if I were to transfer to a US dollar US based bank account.
wise Canada Pros
- Wise’s customer service is fantastic. I used the online chat option (it’s available at a certain time only though) and the customer service representative was really helpful. After the chat was done, they sent an email confirming our conversation and following up.
- The set up process is very thorough and you are asked to provide detailed information confirming your identity (a picture ID) and also information confirming your address, like a utility bill. You can upload these through their online portal.
- It seems very secure. There is two factor authentication when logging in.
wise Canada Cons
- I’m pretty savvy with working my way around websites but I found the terminology confusing and I found using TransferWise a little confusing. It wasn’t a big deal though because I was easily able to access the chat function where they guided me in the right direction.
- Before you set up a US ‘bank account’ with ACH account details, you’ll need to deposit money into TransferWise first. They don’t recognize Canadian based US dollar banks though, and you can’t pay by a Canadian based US dollar credit card. Basically the only way to do it is to add Canadian money and then open up a Multi Currency Account by converting your CAD to USD within rWise.
- As mentioned, in order to get money out, you have to technically transfer your USD to CAD and transfer it to a Canadian bank.
- If you use a credit card to deposit it will be charged as a cash advance. The fee I got charged was around $5 CAD with additional interest, and it is charged by your credit card provider. This is on top of the fees that TransferWise charges.
Wise Canada was pretty straight forward to use. If I needed to exchange money frequently, I would definitely use this regularly. With TransferWise you could skip having a US Dollar Bank account if you don’t want to pay the annual fees of a US dollar bank account (however, there are ways to get a free US Dollar Bank account by having an account minimum). This would work well for people who don’t want to keep USD in a US dollar bank account and don’t mind having it transferred to Canadian dollars.
I figured out a way to avoid Transferwise fees though (if I am getting paid in USD), here’s a step by step guide on how to transfer USD from Paypal to a USD bank account in Canada.
If you have larger sums of money that you need to exchange or send, this would work more economically compared to using PayPal. If you have smaller sums though, using PayPal would likely be cheaper since their transfer fee is less.
To avoid fees from banks funding TransferWise, double check to make sure that the bank you are using to transfer money to TransferWise has free deposits
wise Canada Summary
In summary, in this post, we went over what Wise Canada is, who would benefit from using TransferWise (e.g. students who are abroad, expats who are abroad, digital nomads or freelancers who are living the dream life), how it works, the partnership between EQ Bank and Wise Canada, and what unique advantages having an account with TransferWise would present. Finally, genymoney.ca reviewed the pros and cons of having a Wise Canada account.
Have you used Wise Canada before?
What’s your impression of Wise 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.