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Scotiabank vs EQ Bank’s International Money Transfers

Scotia International Money Transfer

I recently signed up for the Scotiabank Ultimate Package Chequing Account (see also this review) and noticed that it offers free Scotia International Money Transfers. I decided to dig in and see whether this is a worthwhile benefit for anybody who needs to send money internationally, especially compared to EQ Bank’s similar service that was announced at the end of 2019.

Convenience

Both Scotiabank and EQ Bank allow you to complete the entire process online, with an interface that’s built-in to your existing online banking interface.

Here is the Scotiabank online banking interface:

Scotiabank: send money internationally

Here is the EQ Bank online banking interface:

EQ Bank: send money internationally

This is certainly more convenient than sending a wire transfer or money order. EQ Bank’s international money transfer service is actually through a partnership with TransferWise and thus you must also sign up for a TransferWise account. This takes a bit more setup, but might be worth it in the end.

In either case, the transfer direct debits your Canadian bank account and then deposits the money in the destination account within a few business days.

Here is the interface to add a new recipient through Scotiabank:

Scotiabank International Money Transfer: Add a new recipient

Scotiabank supports 18 destination countries. If you need to send money to a country that isn’t on their list, they suggest that you go through their partnership with Western Union, which would cost you a lot more in fees. Through its TransferWise partnership, EQ Bank supports 69 countries and regions (although that includes the volcanic island Jan Mayen, among other regions).

Fees

Whether through a spread on the exchange rate or a specific fee, every currency exchange or money transfer service makes money from you. And they’ll heavily advertise whichever route they’ve taken. In the end, you shouldn’t get distracted by this, because all that matters fee-wise is how much money reaches the destination.

Scotiabank does this through its exchange rate spread (which I calculated to be 2.0% for a CAD to USD transfer), while EQ Bank does this through fees. Note that if you don’t have a Scotiabank Ultimate Package chequing account, you end up also paying $1.99 per transfer (on top of the 2.0%).

I did some test CAD to USD transactions with Scotiabank and EQ Bank and compared the results against the mid-rate on XE.com, which was 0.76464 at the time. In other words, if you were to transfer $10,000 in Canadian dollars at the mid-rate, the recipient would get $7,646.64 in US dollars. Note that this is a baseline that you won’t actually get unless you find someone who wants to exchange exactly $7,646.64 USD in exchange for your $10,000 CAD.

For Scotiabank, I tested the amounts below. (Scotiabank allows you to transfer more than $9,500 CAD at a time, but EQ Bank’s limit is $9,500 per 24 hours, so I chose $9,500 for the highest amount.)

  • Send $100 CAD, receive $74.96 USD
  • Send $1,000 CAD, receive $749.60 USD
  • Send $9,500 CAD, receive $7,121.20 USD

Scotiabank International Money Transfer: Previewing the rate to send $1,000

This is a 2.0% spread no matter how much you transfer: (0.76464 [mid-rate] – 0.7496 [Scotiabank rate]) / 0.76464 [mid-rate]

For EQ Bank, I tested these amounts:

  • Send $100 CAD, receive $74.27 USD
  • Send $1,000 CAD, receive $758.01 USD
  • Send $9,500 CAD, receive $7,216.02 USD

EQ Bank International Money Transfer: Previewing the rate to send $1,000

EQ Bank becomes cheaper pretty quickly — I calculated that at $130 CAD and above, you’d pay less in fees with EQ Bank. For amounts lower than $130 CAD, Scotiabank is cheaper. This is because EQ Bank / TransferWise charges you a fee consisting of a base fee (up to $3.02) + a fixed 0.65% spread on top of the mid-rate. EQ Bank and TransferWise advertise heavily that they charge you the mid-rate, but this is just a clever way to break down the fee.

Interestingly, using EQ Bank is slightly cheaper than using TransferWise alone. When you use TransferWise outside of EQ Bank, it charges you an additional payment fee depending on how you choose to fund the transfer (with a bill payment vs direct debit, for example).

TransferWise charges an additional payment fee

When you do the transfer through EQ Bank, there is no such additional fee.

I did not test other currencies, but I would expect the comparison to be similar, with Scotiabank better only for very small transfers. If you have a Scotiabank chequing account that charges you an additional $1.99, then EQ Bank will always work out cheaper.

Business transfers?

Note that for my small business, I use OFX for all foreign currency exchange — I’ve gotten by far the best rates there for higher frequency and higher dollar amount transfers.

How to open an EQ Bank joint account

EQ Bank joint account

EQ Bank joint accounts have been long-awaited and delayed at least a couple of times (from some time in 2019 and “end of” February 2020). As of June 25, 2020, EQ Bank joint accounts are finally here.

Setting up a joint account with EQ Bank is relatively straightforward and can be done completely online. Once you have an existing account, you can add someone to that account using the EQ Bank mobile app or your browser. Here’s how to do it in your browser.

After you’ve logged in, browse to your account and then click the “More options” button. In the resulting dropdown menu, click the “Convert to joint account” link.

EQ Bank: Convert to joint account link

Then, complete the form for converting the account, which includes accepting the terms and conditions.

EQ Bank: Joint account conversion form

Next, add the account co-holder’s name and email address, and a temporary security question and answer that they’ll have to complete later.

EQ Bank: Joint account co-holder information

Your part is done. The confirmation page states that the co-holder will have 2 weeks to accept the invite:

EQ Bank: Joint account invitation confirmation

The desired account co-holder will then receive an invitation email with some general instructions on how to accept the invitation.

EQ Bank: Joint account invitation email

Once they click the link in the email, if they are already an EQ Bank customer, they can skip the next few steps and essentially log in and click a few buttons to complete the process. If they’re not yet an EQ Bank customer, the desired account co-holder will have to go through the account creation process, beginning by setting an email address to log in with, and a password.

EQ Bank: New account setup first step

This will lead to a more complete sign-up form, where EQ Bank will collect their name and address, occupation information, Social Insurance Number, and more.

EQ Bank: New account setup second step

Next, the desired account co-holder must state the purpose of their account and agree to the terms and conditions.

EQ Bank: New account setup second step

Lastly for the general account setup, they will have to enter a confirmation code sent to their email address.

EQ Bank: New account setup email confirmation

At this point, they can immediately complete the joint account setup by answering the security question you’d originally set up when sending the invite…

EQ Bank: Joint account security question

… and they must agree to the terms and conditions of the joint account.

EQ Bank: Joint account terms and conditions acceptance

This process is complete, and you will both have access to the joint account!

EQ Bank: Joint account terms and conditions acceptance

Technically the account co-holder will now have at least 2 EQ Bank accounts, since their original account still exists. You as the original account holder and primary co-holder might still only have 1 EQ Bank account, since your original account was converted to a joint account.