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Scotiabank vs EQ Bank’s International Money Transfers

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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 Wise (formerly TransferWise) and thus you must also sign up for a Wise 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 Wise 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 / Wise 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 Wise 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 Wise alone. When you use Wise 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).

Wise 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.

Savers Roundup October 2020: Promos for new and existing customers; answering newbie questions about transferring to online accounts

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Percentage sign

Savings account rate drops almost everywhere

Over the past month, all but 2 of the financial institutions on our savings account comparison chart have decreased their savings account interest rates, including EQ Bank (from 1.70% to 1.50%), Motive Financial (from 1.75% to 1.55%), and Bridgewater Bank (from 1.75% to 1.55%). The ones that have remained unchanged? Canadian Tire Bank (still at 1.80% since April) and Wealth One Bank of Canada (at 1.60% since August, during the last widespread decreases; Update: decreased to 1.50% on October 16!).

It’s not much of a surprise that savings account interest rates have continued to drop since the Bank of Canada’s last key interest rate change to settle at 0.25% on March 27. Throughout the summer, the difference between the Bank of Canada’s interest rate and savings account interest rates has been higher than usual.

The drop in GIC rates might be slowing down, with a cluster of very similar rates at the top of our GIC comparison chart, the highest being 2.00% for a 5-year GIC at 5 financial institutions.

Promos for new and existing customers

If you are an existing Simplii Financial and/or Tangerine Bank customer, you might have received their latest targeted new deposit promos:

This time around there are also similar offers for new customers:

Manulife Bank has a promo rate of 2.15% for the first 4 months if you open an Advantage Account before October 31, 2020, which is valid for new and existing customers.

Save money by avoiding PayPal for purchases in foreign currencies

Making a USD purchase with PayPal? PayPal’s foreign currency exchange fee is getting even more outrageous, to a minimum of 4.0%. You can avoid this by not having PayPal do the conversion every time you make a purchase. Even better: don’t use PayPal and/or use a credit card that doesn’t charge you any currency conversion fee.

Newbie questions on transfer fees and introductory rate offers

Not sure about dealing with a mostly online bank or credit union? Wondering about how to get the money in and out, and associated fees? You’re not alone, and our forum members have been very helpful in answering a newbie’s questions!

Cash back offers

We’ve got some new or increased offers on our cash back site:

Savers Roundup September 2020: Canadian Tire has the highest rate; PC Financial is back with PC Money

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Debit card in machine

Canadian Tire Bank has the highest savings account interest rate on our chart

For those who have followed our website over the years, this headline is a surprise. Since MAXA Financial decreased its regular savings account and TFSA interest rate from 1.80% to 1.60% on August 21, that left Canadian Tire Bank all alone at the top of our chart. Canadian Tire Bank’s regular savings account and TFSA interest rate is 1.80%. Looking at Canadian Tire Bank’s rate history, its TFSA interest rate is unchanged since December 2017, and its last savings account interest rate change was on April 21 of this year, when it actually increased its rate.

A non-promo rate of 1.80% is especially shocking when you consider that promo-master Tangerine Bank has reportedly been offering a subset of its clients somewhere between 1.50% to 1.80% for 3 to 6 months. Tangerine Bank’s new customer offer is still 2.50% for the first 5 months. Not on a promo? Tangerine Bank’s standard rate is 0.15%.

Since last month’s Savers Roundup, we’ve seen interest rate drops at no fewer than 6 of the financial institutions we track, most recently at LBC Digital, with a decrease from 1.65% to 1.50%.

Unlikely leader Canadian Tire Bank is far from a leader on our GIC comparison chart, where it brings up the rear with rates such as 0.65% for a 1-year GIC.

LBC Digital has the top 1-2 year GIC rates at 1.85% and 1.95%, respectively. The highest rates for 3- to 5-year terms are 1.85% for a 3-year GIC, 1.95% for a 4-year GIC, and 2.10% for a 5-year GIC, all of which you can at least get at MAXA Financial.

PC Financial is back with a deposit account

Back in 2017, PC Financial chequing and savings account customers transitioned to the Simplii Financial brand. PC Financial kept its credit cards, but is now back with a no-fee banking account called PC Money.

They appear to be purposely avoiding the term “chequing account”, as you cannot write or deposit cheques with the account. However, you can deposit money into the 0% interest account via electronic funds transfers, pay bills, and send unlimited Interac e-Transfers. Deposits into this account are CDIC protected.

With the PC Money account, you don’t use a traditional Interac debit card; instead, you use a Mastercard that directly debits your bank account and earns you PC Optimum points on purchases. Attaching a Visa or Mastercard to a bank account might become a trend (and it’s debatable whether this would be a good trend); we saw Tangerine Bank recently introduce a Visa Debit card. This could partially be the response of traditional financial institutions to Prepaid Visa and Mastercards such as from STACK and Wealthsimple.

More end of summer personal finance reading

Savers Roundup August 2020: Fully online account registrations; a CRA security breach; where to consistently get the highest rates

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Unhappy with online banking

Which financial institutions offer the steadiest savings account interest rate?

Glass half empty: Our savings account comparison chart has seen 20 rate drops since the beginning of July.

Glass half full: even if you are getting the lowest current rate on our chart (1.40%), that’s still 28x higher than the 0.05% you might get at one of the big banks.

Since July, the only financial institutions that have not decreased their savings account interest rates are Canadian Tire Bank (whose last change was a surprise increase on April 21) and MAXA Financial (who decreased their rates on June 20). They now share the lead at 1.80% for both a regular savings account and TFSA. All other rates on our chart are somewhere between 1.40% and 1.75%.

How long will it be before the next interest rate decreases at Canadian Tire Bank and MAXA Financial? Some forum members are speculating that the next Canadian Tire Bank decrease is imminent.

We likely have at least a few years of stagnant interest rates ahead. If you’re someone who wants a consistently high interest rate at a single financial institution, you might be surprised to see lots of fluctuations at the top of our chart:

  • August 17, 2019 (1 year ago today) top rates: Motive Financial (2.80%), MAXA Financial (2.45%), Ideal Savings, Implicity Financial, Outlook Financial (2.40%)
  • August 17, 2018 (2 years ago today) top rates: Hubert Financial (2.35%), EQ Bank (2.30%), AcceleRate Financial and MAXA Financial (2.25%)
  • August 17, 2017 (3 years ago today) top rates: EQ Bank (2.30%), Alterna Bank (1.90%), Bridgewater Bank, Ideal Savings, Oaken Financial (1.75%)

To help in your analysis, our website has a new feature where you can graph the historical interest rates of the financial institutions that we track, some going back 10 years.

Motive Financial vs Achieva Financial interest rate graph

Read carefully when chasing promos

The highest current offer on our promotions page is still 2.50% for the first 5 months in a new Tangerine savings account.

Always read the terms of promotions carefully. BC-only credit union GFFG has marketing language for a GIC stating “earn up to 2.75%* in 18 months”, which is a misleading headline given that the fine print says “earn 1.25% on the first 9 months and 2.75% on the next 9 months, for an effective rate of 2.00% for the full 18 months.”

GIC rates have continued their general decline, although for now LBC Digital’s rates are unchanged from when we checked in last month and it is now the outright leader or joint leader for the 1- through 5-year terms, with the 5-year term sitting at 2.30%. Its 1-year GIC rate of 2.10% easily beats the GFFG promo above.

Update: the day after this article was published, LBC Digital decreased their GIC rates!

Fully online account registrations

During the current pandemic, online banking is more important than ever, but so are fully online account registrations. You have at least 3 options, including EQ Bank and LBC Digital, and with a newly revamped registration process, Motive Financial.

More personal finance headlines

Ampli cash back app review: trading your purchase history for rewards

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Ampli is a Canadian cash back app owned by Royal Bank of Canada. Ampli gives you cash back via Interac e-Transfer (whenever you have accumulated at least $15 cash back) on your everyday purchases that you make on your existing credit or debit cards. It figures out what purchases you made by reading the purchase history of your credit card(s) and/or bank account(s). In a way, you are selling your purchase history and profile, and you agree to be sent personalized offers, in exchange for cash back.

Cash back and other offers

The cash back you get through Ampli is separate and in addition to whatever rewards you are already earning on your credit or debit cards. At the time this article was published, the Ampli website lists 53 participating brands as having “cash back and offers”. Note, however, that not all of these brands participate in cash back offers — in a minority of cases the offer is that you get entries for cash prizes in their “Dreamstakes”.

The Ampli website does not list what specific offers are available. This is only available within its app, and you must be logged in to the app to see the details.

Ampli cash back offers

Some examples of current offers include:

  • Get $5 back on a $60 purchase at Indigo.ca
  • Get $10 back on a $50 purchase at Boston Pizza
  • Get 1% cash back at Petro-Canada
  • Get 1 entry into the Ampli Dreamstakes contest when you make any purchase at WestJet

Ampli WestJet offer

How Ampli might factor into your purchase decisions

One appeal of Ampli is that you can just link your accounts and then change nothing about your spending habits. While the number of Ampli offers appears to be increasing slowly, it’s up to you to determine whether the offers are for purchases you would already be making. Otherwise, you’ll find yourself watching the offers and purposely changing your spending habits in order to take advantage of the offers — that’s presumably one of the main ways that Ampli and its partners hope to make money.

If you deal with multiple banks and credit cards, in order to ensure that you get credit for applicable purchases, you have to link them all; otherwise you might make a purchase on a non-linked account and thus not get the cash back.

The Ampli sign-up process

The entire Ampli experience is done through its iOS or Android app.

You must enter your first name, last name, and email address. It also asks for your postal code and phone number, and to sign up to receive promotional emails, but those are all optional; you can press the “Skip” button in the top right of those screens:

Ampli: optional phone number

Part of the sign-up process is to accept the terms and conditions:

Ampli terms and conditions

You can also read these terms on the Ampli website, which includes information about how they use your information:

When you sign up to the Ampli app (App) and add an account, we will use your transaction and other information to present you with tailored offers, recommendations and marketing in the App from us, other RBC companies, and Third Parties.

Linking a bank account or credit card consists of selecting the financial institution, then entering your login credentials at that financial institution.

Ampli bank account link: powered by RBC

Ampli bank account link: select a financial institution

Ampli bank account link: log in to the financial institution

I definitely paused a bit while signing up to consider how comfortable I am linking my bank account to the app. Obviously, this is the key step in order for me to participate in the offers, but I’m used to cash back being automatically tied to individual credit cards, or tied to me clicking on an affiliate tracking link. When it comes to Ampli, linking the bank account by signing in to it similar to how you link an account to accounting software, and security-wise, the fact that the app is owned by RBC gives it legitimacy. On the other hand, you must decide whether the cash back offers are worth all the trouble.

I was somewhat confused by the emphasis on bank accounts. At first, because it was prompting me to fulfill the requirements for a $5 promo (more on that next), I thought I was linking my bank account to receive payments:

Ampli link to claim bonus

That was my wrong assumption, since they send you Interac e-Transfers when you withdraw the cash back, so the bank link has nothing to do with the withdrawal process — it’s entirely so that Ampli can read your transactions. In any case, you can link to credit cards that are tied to traditional bank accounts (such as at Scotiabank or TD Canada Trust), or search for a credit card company such as American Express:

Ampli link to American Express

Additional sign-up offers and how to withdraw

If you use the code AMPLI5 during sign-up, you will get $5 in your Ampli account for attaching a bank account or credit card. You must accumulate $15 in cash back before you can withdraw the money via an Interac e-Transfer.

There might be other promo codes available for new sign-ups, such as DOORDASH15 — until July 31, 2020, that gets you $15 cash back if you spend at least $15 with DoorDash.