Life in Canada presents us with some practical questions, for example – how to transfer money from Canada to our relatives in Russia, Ukraine, Kazakhstan or other countries quickly, safely and for moderate fees, or how to transfer money to Canada.
What are the ways of transferring money to other countries? We are talking about relatively small amounts ($200 – $1000), which are transferred to parents or other relatives monthly or by-monthly. Many people use Western Union , Money Gram, Bridge services or direct bank transfers (money transfer, wire transfer) to deposit money to the accounts of the receiving parties. In all the instances, banks charge a considerate fee for such services. Monthly fees can come up to $40 – $50. The incurred losses include not only the transfer servicing fee but the differences in currency conversion, which happens when the financial institutions and currency exchange offices establish their own, not necessarily corresponding with the real situation, exchange rate. It is wiser to use ATM system PLUS+, which has spread widely in many countries (including Canada, Russia, Ukraine, Kazakhstan, Belarus, Azerbaijan, Latvia, Lithuania, etc.) Large companies in Russia or Ukraine have already switched from distributing the salaries to the employees to depositing it to their bank accounts. The employees can withdraw the money using ATM. They can also use the same ATM to receive money from you. The sequence of actions is quite simple.
A husband and wife open a join account in Canada and receive 2 bank cards. One of those cards is sent to the addressee (the future recipient of the money transfers). When the recipient receives the card, he or she gets the PIN code, Personal Identification Number, and money is thus deposited to the corresponding account. Your monthly costs will be around $3 – $4, plus additional $3 – $4 for each withdrawal of money. It is possible to avoid the initial monthly $3-4 charges in some banks if the conditions allow maintaining a fixed amount of money on the bank account and, therefore, avoiding the service charges. When withdrawing the money, you will not incur double losses related to conversion of US dollars into the local currency as it happens when using Western Union, or Bridge services. If you cannot open a join account, you can send the only card that you have to your future recipient, and in order to deposit money to the account from Canada or any other country, you will have to use any bank branch providing the account number since the only card you had is now in possession of the money recipient. The actual transfer of money means that you are depositing money to your own bank account in Canada (the sender’s country) and the recipient will withdraw the money in any country using the bank card and the PLUS+ ATM system.
All of the above is only relevant if we are talking about small amounts of money. If you need to transfer more than $1000, you will have to use currency transfer transaction.
Michael Arbetov, CFP, FMA
Financial Adviser
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