Wire transfers are an easy and convenient way to electronically move money from one account to another. They’re commonly used to transfer large amounts of money quickly – both domestically and internationally – as other methods such as cheques can have longer processing times.
Perhaps your daughter needs to receive funds so she can afford her dream wedding? Or maybe you need to pay the decorator for their excellent work on your new home in Vancouver.
This guide explains what a wire transfer is and how it works to help you decide if it’s the right option for you to send money from Canada.
In this article
- What is a wire transfer in Canada?
- How does a wire transfer work in Canada?
- What you need to make a wire transfer
- How long does a wire transfer take?
- Who are wire transfers for?
- FAQs and guides
What is a wire transfer in Canada?
A wire transfer is an electronic money transfer between two financial service providers or banks across a network. The sending institution can be in Canada, while the receiver may be domestic or overseas. Wire transfers can be used to send money quickly across the world or within Canada, such as from Montreal to Toronto.
Financial technology has come a long way since they first emerged, and today there are two main types of wire transfer – bank-to-bank and wire transfer services. Non-bank wire transfer services do not always require bank account numbers.
Using a wire transfer in Canada can offer peace of mind if you know the receiver and use an established wire transfer provider. Anonymous transfers are impossible, as both people involved need to confirm their identity. The sending entity can also freeze the wire transfer if any security concerns arise.
There is no physical cash involved with a wire transfer in Canada, as money is sent via electronic networks that connect banks to each other. You can usually start a wire transfer in person or online with the receiver’s details and amount you want to send.
The financial institution you use will contact the receiver’s bank with payment instructions, with the money taken from their own reserves. The banks or financial institutions settle the money later, so you don’t wait too long for your transfer to complete.
There are two main types of wire transfer:
Domestic wire transfers
A domestic wire transfer within Canada is usually faster than an international transfer. Typically, funds will arrive the same day if you transfer between accounts with the same bank (intra-bank transfer).
If you belong to a different bank than your receiver, Real-time Gross Settlement (RTGS) or Automated Clearing House (ACH) networks will be used to move the money from one account to another.
International wire transfers
An international wire transfer is collected in a different country from where the funds were sent. This is helpful if you have family living in the US or further afield, while you’re based in Canada.
If you use the same bank as your receiver, the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network will be used to speed up the process. If you have a different bank to them, ACH, Single Euro Payments Area (SEPA) or National Electronic Funds Transfer (NEFT) networks may be used.
International wire transfers can take longer to clear due to compliance regulations in the countries of the financial institutions involved.
If you decided a wire transfer is a convenient method for you, make sure you collect the essential information you need before you start – whether arranging a transfer online or in person.
When requesting the transfer via your bank, you may need to fill out a form in your local branch. Consider phoning in advance to check what they need from you, as some banks may require additional information.
Generally you need the following information about your receiver:
- Full name and address
- Bank branch number and full address
- Bank account number
- Bank BIC/SWIFT code
- ABA or routing number (if sending money to the US)
- International Bank Account Number (IBAN – if sending money to Europe)
Any inaccuracies could see your wire transfer go to the wrong receiver or be cancelled, delaying the transfer. It’s also essential you have enough funds to cover your money wire transfer, as you don’t want to be landed with any unexpected charges for having insufficient funds.
On average, domestic wire transfers take up to one business day to process. International wire transfers have a predicted timeframe of three to five business days. However, they can take up to a week to complete.
Different time zones and bank opening hours in the receiver’s country affect how long international wire transfers take. Which bank or service provider you use may also affect completion timescales – plus the amount of money you send.
Money wire transfers are a convenient option for those who want to send a large amount as quickly as possible. For example, if you need to pay a down payment on a house within a tight timeframe or buy a new car outright. Family or friends living far away might also prefer to receive funds through a wire transfer if they need the money quickly.
Alternatives to wire transfers include cheques or depositing cash at the bank. These options and often slower than a wire transfer though.
Can you cancel a wire transfer?
You may be able to stop a money wire transfer if you request a cancellation before it’s accepted by the receiver’s bank or financial institution. A wire transfer can be reversed if the sender’s bank has issued a cancellation notice to the receiver’s bank within the required timeframe.
However, try to avoid relying on this process, as once the transfer is accepted, it cannot be reversed.
How much does a wire transfer cost?
The cost of a wire transfer in Canada will depend on your bank, financial institution or money service provider, the amount you’re sending and whether you are sending money internationally or within Canada. A non-bank provider may offer free wire transfers.
Generally, banks will charge you more to wire money internationally. Check your bank for domestic and international wire transfer charges.
If you think a wire transfer might be the right option for you, learn more about how to do a wire transfer.