The Best Newcomer Bank Accounts for Remittances


For many newcomers to Canada, there’s an expectation to help our loved ones back home as we migrate to our new home. As we earn our paycheques, we want to share our blessings and show them we still care, despite being far away.

While many of us also send care packages to our loved ones, the most common way we help people back home is by sending remittances.

There are so many ways to send remittances from Canada that figuring out where to start can be confusing.

Through this article, we’ll explore how remittances work in Canada, and we’ll check out some bank accounts that make the process hassle-free.

What Are Remittances and How Do They Work?

Broadly speaking, remittances are a way to send money electronically from one party to another.

Practically speaking, remittances are most frequently used by people abroad to send money to their home country. After all, for many people, helping their loved ones back home is one of their key motivations for seeking greener pastures.

In Canada, most remittances are done electronically, though you might still find remittance agents that accept cash. Luckily, even if you send cash, modern-day technology allows the funds to reach your recipient quickly.

Remittances work through agreements among agents, especially the sending agent (e.g., a bank) and a paying agent (e.g., a remittance centre). The former receives the funds from you, while the latter pays the recipient.

These agents and their intermediaries have agreed on how to handle remittances electronically (especially when it comes to paying one another), so that you and the recipient can have a seamless experience.

Remittance agents coordinate among themselves for a seamless experience

Remittance agents mainly make their money through two types of fees: sending fees and receiving fees.

Sending fees are set by the sending agent to cover the cost of the remittance process. They can be a flat fee, or they can be a percentage based on the amount to be sent.

In some cases, sending fees are waived, since the sending agent will make their money through the exchange rate margin, or “spread.”

One important thing to keep in mind when sending remittances is that the exchange rate you see on the internet, which is known as the mid-market rate, most likely won’t be the rate applied to the money you send. Instead, banks and other financial companies often add hidden fees onto that rate to fund the exchange operation and, of course, to profit.

Recipient fees, at the other end of the process, are what the recipient pays when they withdraw the funds from the receiving agent.

In many cases, these fees are not actually charged, since the sender is usually responsible for all fees; however, some receiving banks and agents may charge a nominal “inbound remittance fee.”

Now, there are many ways to send remittances from Canada. You might have heard of Western Union and the app Remitly – both of which are available in the country.

However, you should also consider using bank accounts that integrate an in-house remittance feature to make your transfers more seamless, especially if you’re sending money regularly.

Below, we highlight some bank accounts that support the needs of newcomers, especially when it comes to sending remittances.

The Best Newcomer Bank Accounts For Remittances

Before taking a bank’s remittance features into account, you must first consider if the bank meets your needs as a newcomer in the first place.

Crucially, the best banks for newcomers feature a newcomer program, which provides a no-fee account or an account fee waiver. To sweeten the deal, these banks might also offer a welcome bonus or incentive, which could be cash, points, gift cards, or electronics.

These same banks also generally feature an in-house remittance or “global/international money transfer” service as a further part of their support for newcomers.

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Some banks waive transfer fees for remittances if you’re an account holder, and some banks may even offer promotions or incentives on remittances, such as a cash bonus.

That said, keep in mind that banks are still making money from the exchange rate margin, as mentioned above, so be mindful of how much your recipient will get in the end.

In selecting the best newcomer banks for remittances, we considered both their newcomer offering and their remittance offering. In doing so, we’ve come up with the recommended five banks below.

Scotiabank

The first remittance-friendly bank we’re highlighting is Scotiabank, one of Canada’s Big Five banks. With over 900 branches scattered across the country, you likely have a local branch not far away.

Scotiabank is a good choice if you’re new to Canada, since it’s developed a program specifically for newcomers called StartRight. The program offers incentives on bank accounts, investments, money transfers, and credit cards.

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With StartRight, you get your monthly fee waived for one year with the Preferred Package chequing account.

With the account, you’ll get unlimited Visa Debit card transactions and Interac e-transfers, a first-year annual fee waiver (up to $150) on select Scotiabank credit cards, and more.

In addition to having your monthly account fees waived, you’ll also receive a bonus of up to $350 (all figures in CAD) in cash upon meeting specific requirements.

As for remittances, Scotia International Money Transfer lets you remit funds directly into your recipient’s bank account within five business days.

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The service is available right from your online account, so you can make transfers easily. Plus, if you enroll your Preferred Package account within the StartRight program, your sending fees are waived for the first year.

In all, Scotiabank is a good bank choice for remittances, since it offers a fee-waived account for newcomers, a cash bonus, and unlimited no-fee international money transfers right from your account.

CIBC

Among Canada’s banks, the Canadian Imperial Bank of Commerce (CIBC) is the most active in marketing towards newcomers. In fact, as soon as you land at a Canadian airport, you’ll be greeted with advertisements for CIBC’s newcomer products and its global money transfer service.

With CIBC’s Smart Arrival program, you get up to 24 months of waived monthly fees with the signature Smart Account. This account type offers unlimited transactions and a one-time annual fee rebate on selected credit cards.

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Additionally, a new account qualifies you for a $400 Costco shop card upon meeting the required conditions.

When it comes to remittances, CIBC offers a solid Global Money Transfer service, which notably doesn’t charge sending fees to any CIBC clients.

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More importantly, CIBC’s service also allows a wide range of receiving options, including:

  • Bank accounts in 130+ countries
  • Digital wallets, such as GCash (Philippines) and Alipay (China)
  • Moneygram cash pick-up
  • Visa Debit or credit cards
  • UnionPay

Another good thing about CIBC Global Money Transfer is that it frequently offers promotions and contests such as a $50 cash bonus and a raffle for $25,000.

Similarly to other banks, you can initiate your Global Money Transfer directly from your account, and you can draw from a chequing, savings, or credit card account.

With its strong newcomer offers and its solid global money transfer service, you should surely consider banking with CIBC.

TD

The Toronto-Dominion Bank (TD), also known as TD Canada Trust, has more than 1,100 branches nationwide.

For newcomers, TD offers services in various languages and resources to help you navigate financial services in Canada.

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Additionally, with its New to Canada program, TD offers newcomers one year with no monthly fees on its Unlimited Chequing Account, which features unlimited transactions, a Visa Debit card, and linking to Starbucks Rewards.

As a new client, you’re also eligible to receive up to $350 as a cash bonus when you complete a set of required tasks.

With regards to remittances, you also receive unlimited transfer fee rebates through TD Global Transfer for up to 12 months.
With TD Global Transfer, you can send your money three ways:

  • International bank transfer directly to your recipient’s bank account in 1–5 business days
  • Western Union Money Transfer to 500,000 agent locations in as few as 2–4 hours
  • Visa Direct transfer directly to your recipient’s Visa Debit, credit, or prepaid card in 24–48 hours

Conveniently, you can perform any of the above transfers right from your bank account.

With its strong welcome offers for newcomers and its rebated fees for remittances, TD is clearly a bank worth your consideration.

EQ Bank

EQ Bank is the first among the two digital banks on our list. EQ Bank doesn’t have a newcomer program per se, but it offers a compelling product in the no-fee Personal Account.

With EQ’s Personal Account, you’ll get a debit card and unlimited transactions, plus up to 4% interest on your deposits – a rare offer among chequing accounts.

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For remittances, EQ’s International Money Transfer is unique in that it has enlisted Wise to facilitate its remittance service. Wise is a globally renowned money transfer service that charges lower fees and provides better exchange rates than its competitors.

EQ Bank and Wise support almost 50 currencies, and remittances can be made to 100+ countries, including the Philippines and India.

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To make an International Money Transfer, simply log into your EQ Bank account through the website or the app. You can then fund your remittance directly from your Personal Account.

If you’re comfortable with a digital-only bank, definitely consider EQ Bank. It offers a no-fee account, and its partnership with Wise makes its remittance service very competitive.

Simplii Financial

A subsidiary of CIBC, Simplii Financial is the only digital bank in Canada that allows newcomers to open a bank account even before arriving in Canada.

Simplii offers the No Fee Chequing Account, which offers unlimited transactions and a Visa Debit card.

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In addition to this, you can earn a $400 cash bonus by simply adding an eligible direct deposit (such as your payroll) amounting to at least $100 a month for three straight months.

Simplii’s Global Money Transfer offering is similar to that of CIBC’s, which is not surprising since they’re both part of the same company.

Like CIBC, Simplii doesn’t charge service fees on remittances, and you can transfer to bank accounts, digital wallets, MoneyGram, and Visa Debit and credit cards.

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Simplii also offers promotions and contests that you should watch out for. In the past these have included things like a $50 cash bonus and raffles for $5,000.

Simplii Global Money Transfers can easily be funded directly from your chequing, savings, and credit card accounts.

We think Simplii is another good choice for you to consider when looking for a remittance-friendly bank account given its no-fee banking and its wide range of transfer options.

Conclusion

As a newcomer, one of your biggest concerns as you settle in Canada might be to find ways to remit money to loved ones back home.

Since Canada is an immigrant-friendly country, there are thankfully many ways to send money transfers abroad.

Among the options are money transfer apps and conventional remittance agents; however, one of the most convenient options is newcomer bank accounts that also have a remittance feature.

These accounts are preferable to money transfer apps and conventional remittance agents because transferring money directly from your bank account makes remittances seamless, and most banks don’t charge a sending fee.

We hope this guide helps you pick an account that supports your needs as a newcomer, especially in terms of sending remittances, and we welcome you to your new home!





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