Whether you’re living here or travelling outside the country, there are plenty of reasons why you might need to send or receive money overseas, as well as convert CAD to foreign currency (or vice versa). The problem is that finding the best money exchange service and rates isn’t always easy.
Fortunately, there are plenty of companies you can convert your currency. Keep reading if you’re looking for some cheap ways to exchange currency in Canada.
Where Can You Exchange Currency in Canada?
Before you use any money exchange, it’s a smart idea to research multiple services and compare conversion rates to make sure you’re getting the best deal possible. At the moment, here are some popular ways to exchange currency cheaply in Canada:
Banks & Credit Unions
One of the most popular places Canadians exchange currency is the bank and credit unions. While they are popular sources, they are often more expensive than money transfer platforms. Not only do banks tend to have a higher exchange rate, but they also usually charge a transaction fee. This fee can be a flat rate or as a percentage of the transaction.
Which Canadian Bank Has The Best Exchange Rate?
Here are the approximate USD exchange rates charged by some of Canada’s largest financial institutions (as of May 2022):
- TD Canada Trust = $1.3037 CAD
- Bank of Montreal = $1.3005 CAD
- Royal Bank = $1.2967 CAD
- Scotiabank = $1.3088 CAD
- Desjardins = $1.3032 CAD
Currency Exchange Bureaus
Currency exchange bureaus are another popular source for currency exchange. These places usually have better rates than banks, but can still be quite expensive. Like a bank, they too charge transaction fees which can either be a flat rate or a percentage of the transaction. These currency exchange bureaus can be typically found in airports, malls and other touristy areas.
Which Currency Exchange Bureau Has The Best Exchange Rate?
Here are the approximate USD exchange rates with some of our most popular Canadian currency exchange bureaus (as of May 2022):
- ICE Canada = $1.00 USD = $1.3314 CAD (may vary by location)
- Calforex = Exchange rates vary by location
- Globex 2000 = $1.00 USD = $1.2925 CAD
Money Transfer Apps
There are many money transfer services available in Canada that you can use to exchange currency. These services are used to send money to someone overseas, so if you’re looking to transfer money from a foreign bank account to your Canadian bank account, these services can prove useful.
Which Money Transfer App Has The Best Exchange Rate?
- Wise – Wise (formerly known as TransferWise) is a convenient and user-friendly platform that offers exchange rates of roughly $1.00 USD = $1.26645 CAD.
- Remitbee – With Remitbee, you can exchange up to $1 million per day at a rate of $1.00 CAD for $0.7793 USD (which is on par with the Bank of Canada’s rate).
- Western Union – While Western Union currently has an exchange rate of about $1.00 CAD = $0.7695 USD, they charge an automatic $1.99 CAD transaction fee.
- PayPal Xoom – Like Western Union, PayPal Xoom also charges a transaction fee between 2.99 – $4.99 CAD. However, their rates are slightly lower at $1.00 CAD = $0.7709 USD.
- World Remit – World Remit charges a $3.99 CAD transaction fee, along with an exchange rate of $1.00 CAD = 0.7747 USD.
What’s The Difference Between The Mid-Market Exchange Rate And The Consumer Exchange Rate?
When searching for currency exchange services, the best way to save money is by locking down the exchange rate that’s closest to the Bank of Canada’s present market rate. However, you may come across several types of exchange rates in Canada, like:
- Mid-Market Exchange Rate – The mid-market exchange rate should be your gold standard, because it’s essentially the true exchange rate between two currencies. This is the best rate for relatively large money transfers and most financial institutions, like banks, will use it to trade with other financial institutions.
- Consumer Exchange Rate – This is probably the most common exchange rate you’ll encounter in Canada. It’s a mix between the market exchange rate and the amount that a money exchange service charges to keep their profit margins up.
What’s The Difference Between The Sell Rate And The Buy Rate?
Also known as the “bid-ask” spread, the buy-sell rate is the difference between the prices that a money exchange buys and sells a currency. Watch out, as there can be a significant spread (or difference) between the bid and the ask price for currencies in the retail market. Additionally, buy-sell rates may vary greatly from service to service.
The Worst Places to Exchange Currency in Canada
When you arrive in Canada or another country, it’s smart to keep some local currency on you, just in case. That said, there are a few places you may want to stay away from unless it’s an emergency or you’re trying to avoid even higher credit card rates. This is because the exchange rates at these locations are almost always higher than most currency exchanges services:
- Airports
- Border Crossings
- Public Transit Stations (train, bus, ferry, etc.)
- Street ATMs (they can be risky spots for theft, card skimmers and fake devices)
Tips For Exchanging Currency In Canada
Unfortunately, money services can come with many pitfalls. So, here are some other helpful things to do before you use a currency exchange inside or outside of Canada:
- Compare Rates – Remember, there are dozens of currency exchanges in most major countries. Be sure to shop around and ask for the service’s net rate after commissions. You may find competitive rates in regions with multiple exchanges.
- Compare Fees – Some currency exchanges charge set service fees for each transaction, others will charge a percentage of the total transaction amount. Generally, a flat rate is a better option for larger transactions and a percentage fee for smaller ones. Either way, the exchange rate won’t be the only cost you’ll have to deal with.
- Convert Everything In One Go – If possible, it’s smarter to exchange currency exchanges in a single transaction, rather than multiple separate transactions. Given that many of these services charge a transaction fee, the fewer transactions you make, the more you’ll save.
- Watch Out For Buy And Sell Rates – Don’t forget to confirm that you’re getting the right buy and sell rates for your CAD or foreign currency. For example, sneakier exchanges might list the sell rate for USD, instead of the buy rate.
- Watch Out For Additional Clauses – No matter how long it takes, always read the fine print. Every currency exchange has different conditions, rates and fees but banks and government-regulated services are usually the safest options.
Exchanging Currency in Canada - FAQs
What’s the exchange rate for CAD to USD?
Can I exchange currency with no fees?
What is the mid-market rate?
Looking For An Affordable Way To Exchange Currency?
Exchanging money is sometimes expensive but there’s no reason you should be getting swindled. Don’t forget to shop around, compare rates and fees and learn everything you can about a variety of currency exchange services before you actually choose one. Whether you’re a resident or a visitor, it’s always important to know where your money is going.
