Are Interac e-Transfers the same as wire transfers in Canada? : A closer look

Canadians needing to send money can pick between Interac e-transfers and wire transfers. While both are considered electronic funds transfers or EFTs, they differ in speed, cost, and accessibility, which we will break down in this article. We will then present Wise as an alternative for international money transfers. Let’s get into it!

What is a wire transfer and how does it work?

Wire transfers move money between bank accounts through secure messaging networks.¹ These transfers can be completed through a bank or a third-party money transfer service.¹ The two main wire transfers are:

• Domestic: Transfers between banks within the same country. Since they only pass through the domestic ACH system, funds are typically sent, processed, and received on the same day.¹
• International: Transfers between banks in different countries. For example, sending money from the U.S. to the U.K. These transactions take longer due to multiple clearance stages across international banking systems.¹

How to send a wire transfer:

1. Gather recipient details (name, bank name, account number, and SWIFT/BIC code for international transfers).
2. Visit your bank’s online portal, or branch, or call customer service.
3. Provide transfer details and specify the amount.
4. Pay the associated fees.
5. The bank processes and sends the transfer, which can take between 1-5 business days.

What is an Interac e-Transfer and how does it work?

Interac e-Transfer offers a secure and convenient way to send money within Canada through online banking.³ Funds are transferred using trusted banking protocols that may take up to 30 minutes, depending on your bank or credit union.³

How to Send an Interac e-Transfer:

Step 1. Sign into your financial institution’s online banking.³
Step 2. Click the option for sending money using Interac e-Transfer.³
Step 3. Select the account you’ll send the funds from.³
Step 4. Choose the recipient:

• If the recipient has a Canadian bank account and is registered for Auto Deposit, their full legal name will appear.³
• If this is your first time sending someone money, you’ll need to add them as a recipient by entering their name, email address, and/or mobile phone number.³
• If the recipient has a Canadian bank account but isn't registered for Auto Deposit, you’ll be prompted to create a security question for them to answer. Be sure the answer is not easily guessed and never include it in the Interac e-Transfer memo field. ³

Step 5. Enter the amount you want to send and after reviewing all the details, send the transfer.³

Is a Wire transfer the same as an e-Transfer?

A wire transfer and an e-transfer are not the same. Wire transfers are favored for larger amounts and international transactions, while e-transfers are generally for domestic transfers between individuals.

1. Uses and accessibility

While both facilitate electronic payments, they differ in use cases, fees, and processing times.

2. Transfer speeds

Wire Transfers take anywhere between 1-5 business days, depending on the destination and bank processing times. Interac e-transfers are usually instantaneous but can take up to 30 minutes.

3. Fees and exchange rates

4. Limits and Restrictions

• Wire Transfers: Higher amounts can be sent at once, but require extensive details and can be costly for small transactions.
• Interac e-Transfers: There are both daily and transaction limits that vary by financial institutions but typically around $3,000/day.

The international limitations of wire transfers and e-Transfers

Interac e-transfers are limited to Canadian banks, while wire transfers can be used internationally. However, wire transfers can be timely and costly with the conversion fees, plus potential intermediary bank fees adding unexpected costs.

A smarter alternative for international transfers: Wise

Wise is a cost-effective and 100% transparent alternative for international money transfers that allows users to hold up to40 currencies at once. Wise has a cost-effective and transparent model whereby users get access to the real exchange rate without hidden markups. Fees are considerably lower compared to traditional wire transfers, making it a more affordable option. Wise transfers are quick, taking 1-5 business days, but faster for popular routes and even instant in certain circumstances.

Final thoughts

Interac e-transfers are useful for fast, domestic transactions, between friends or family, while wire transfers handle large or international payments, for things like real estate. Wise presents as a smart alternative with lower fees, impressive exchange rates, and fast processing times. Sign up to Wise today for hassle-free international money transfers!

Sources:

1. Western Union - EFT vs Wire transfer
2. Interac e-Transfer
3. How to Send Money with Interac e-Transfer