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Compare international banks in Canada

Find an international bank account to park your money that's light on fees.

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By

Andrew Munro

&

Jaclyn Hurst

Updated

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If you regularly conduct business or invest in different countries, an international bank account can offer special features to make your banking easier and more affordable. Learn more and compare your options.

How to compare accounts from international banks

Keep the following in mind as you compare accounts from international banks:

  • Availability. Where will you be living overseas? Look for an international bank that’s popular in that area, so you’re more likely to have branch locations and free ATM access should you need it.
  • Fees. Look for an account with little to no fees for monthly maintenance, foreign transactions, ATMs and more. Most banks list their Fee Schedules online, so take a peek before you commit to opening an account.
  • Conversion rates. If you’re staying in one place, pick a bank that has a strong currency conversion rate, so you’ll maximize your dollars each time you make a purchase or withdraw cash.
  • Features. Do you need an account that supports multiple currencies? What about one that has a global ATM network that supports your travels? Narrow down the features that are important to you, and find an account that checks all the boxes.
  • ATM network. Choose a bank that has a large ATM network in your area, so you’re guaranteed to have free access when you need to withdraw cash.

Other types of international bank accounts

In additional to the traditional banks above, you could also consider joining a challenger bank. Challenger banks are completely digital and built on new technology designed to “challenge” traditional banking and allows you the freedom to use and access your money almost anywhere, usually with the lowest fees. Be aware, though, that many of these banks are not yet available to Canadians.

Digital banking in Canada.

Pros of an international bank account

You might want to switch to an international bank account for these following reasons:

  • Multiple currencies. International accounts let you use overseas currencies more easily, often with more preferable exchange rates and fewer fees. If you regularly use foreign currencies, an international account can get you more value for your money.
  • Access to foreign markets. Only having a domestic bank account might inhibit you when making foreign investments, while an international bank account may let you more easily access foreign markets to trade forex or trade shares internationally.
  • Overseas investments. Purchasing real estate, companies or any other investments overseas would generally involve getting a foreign currency and making a money transfer. Regular investors can save time and money by investing out of an international account.
  • Privacy. Sensitive financial information may be safer overseas, in an anonymous account, than in a standard domestic bank account. If your occupation requires you to protect sensitive client information, or your own, then an international bank account may be preferable.
  • International money transfers. If you keep making international money transfers through a domestic bank account, you can very quickly spend a large amount on fees and currency exchange rates. An international bank account typically lets you do it with preferable rates and at a lower cost.
  • Tax advantages. Money stored in international accounts is sometimes eligible for legal loopholes that cut down on tax costs. But it’s a good idea to talk to a professional, because accidental tax evasion can land you in a considerable amount of legal trouble.
  • Linked accounts. Depending on your preferences, you may link other accounts to your international bank account to earn interest on them or enjoy other benefits.

Disadvantages of international bank accounts

An international bank account has a lot of advantages, but you should also be aware of the potential risks involved:

  • Legal risk. It’s your responsibility to follow all applicable laws when holding overseas accounts. It may be advisable to use an experienced tax accountant to help you.
  • Financial risk. Money held in Canadian bank accounts is generally protected by the CDIC up to $100,000. Money held in overseas bank accounts does not have this guarantee.
  • Fees. There may be additional fees and costs involved with international banking, and these can vary between providers. You should make sure you are well informed about all applicable fees and conditions before opening an account.

How do I open an international bank account?

Opening an account at an international bank looks a lot like opening an account in Canada. Once you find an international bank that’s right for you, you’ll generally follow these steps to open an account:

  1. Go to the international bank’s website and choose which account you wish to open.
  2. Enter your personal information, including your name, date of birth, address, citizenship and occupation.
  3. Verify your identity using a government-issued photo ID, such as a driver’s license or passport
  4. Verify your address using a bill from a service provider.
  5. Verify your income using a pay stub from your employer.
  6. Choose which currency you want to use for the account.
  7. Optionally, you may need to provide documentation from your current bank proving you have a positive banking history.
  8. Make your initial deposit.

3 things to do before opening an international bank account

Before you open an international bank account, make sure you:
1. Have a purpose in mind
By deciding which benefits are most important to you, like easier international investments, more tax options or cheap international money transfers, you can choose an account tailored to your needs.
2. Know your must-haves
Know what the account absolutely must have. For example, if you know with certainty that you will be investing in the Chinese property market then you’ll probably want an account that delivers advantageous Canadian-Chinese currency conversion rates and lets you quickly transfer and convert funds to take advantage of great deals or compete at auctions.
3. Know the law
International accounts can be more legally complicated because they might mean obeying the laws of two different countries at once. You need to operate within both Canadian law and the laws of whichever nation your account is being held in.

What is a foreign transaction fee?

A foreign transaction fee, also called an FX fee, is charged to your account when a currency conversion takes place. For example, if you buy something online from the US and your bank needs to process the payment in USD instead of CAD, it’ll charge you a fee for making this exchange. Although foreign transaction fees vary by institution, they’re usually around 1-3%.

How to avoid foreign transaction fees

If you’re stuck paying a foreign transaction fee when you swipe your card, here are a few ways to avoid them:

  • Exchange currency before you leave Canada. Converting money at your home bank before you head off overseas could save you the conversion fee.
  • See if your bank has any foreign partnerships. Some banks partner with other institutions to bring their customers fee-free access overseas. For example, Scotiabank is a founding member of the Global ATM Alliance. When you’re travelling outside of Canada, you can use the ABMs of the international banks in the Alliance, and you’ll skip the surcharge and save on access fees.
  • Get a new chequing account. If foreign transaction fees are eating into your bank account, you may want to consider getting a debit card with no foreign transaction fee. That way you can avoid the fee and keep more money in your pocket.

What are the features of debit cards with no foreign transaction fee?

Chequing accounts with debit cards geared toward users who make foreign transactions generally include features such as:

  • Low currency conversion fees. Some debit cards have low fees or waive these fees altogether.
  • Low ATM fees. Some cards don’t charge you to use foreign ATMs at all, while other have low fees or international ATM networks.
  • Competitive exchange rates. Using a debit card from a bank that charges exchange rates as close as possible to the mid-market rate can save you a considerable amount of money on foreign transactions.
  • Global money transfers. If you regularly make foreign purchases or payments then you may want to look for a bank that offers low-cost or free international transfers.
  • Rewards programs. Some debit cards let you earn rewards points for eligible purchases which you can use to claim travel benefits. Take a look at whether your card is linked to a frequent flyer program or a dedicated provider rewards program.

What to consider before you move abroad

Before you make your trek out of Canada, keep these 5 tips in mind.

  • Your bank could freeze your debit card if you don’t give a heads up. If you don’t tell your bank you’re traveling abroad, it could freeze your debit card the first time you use it overseas. Avoid an afternoon of panic by notifying your bank beforehand. You can do this by calling the number on the back of your card, filling out a form online or sending a notification through its app.
  • You might not be able to manage your account from an international branch. If your bank has locations overseas, don’t automatically assume they’re connected. For example, HSBC has branches in the US and Lebanon, but their systems don’t communicate with each other. If you pop by an overseas branch, the teller may not be able to help you.
  • You might have to pay foreign transaction fees at an international branch of your bank. Just because your bank has branches overseas doesn’t mean you won’t pay foreign transaction fees. Read through your fee schedule or call up your bank to see if you’ll be charged a fee for using your card overseas.
  • Having a student visa might limit your bank account options. In some countries — such as Lebonan — you need at least $1,500 in monthly income to open most basic chequing accounts. But a student visa forbids you from working. If you end up in a country with similar account requirements, it may be difficult to find an account you qualify for.
  • It’s easier to get paid in US dollars if it’s an option. Some countries accept US dollars, in addition to the local currency. If you have this option, getting paid in US dollars could make it easier to deposit money back home or file your taxes.

How do I avoid ATM fees with international banking?

To avoid racking up fees:

  • Withdraw less frequently. Instead of withdrawing $20 or $40 several times a week, withdraw $100 or $200 at once less often.
  • Stay in your bank’s network. Whenever possible, try to use an ATM owned by your bank or owned by a company with which your bank has a partnership.
  • Use ATM locators. Most banks have tools on their websites and mobile apps to help you find your nearest ATM. Put these tools to use if you ever need to find your nearest fee-free place to withdraw cash.
  • Get cash back at checkout. If you use your debit card in a store, you may be able to get cash back at the checkout without paying any fees.
  • Fee-free accounts. Some chequing accounts reimburse you for ATM fees or let you withdraw a certain number of times without paying any fees. Ask your bank about their fee-free offerings.
  • Pay with card instead of cash. The amount of times you actually have to use cash to pay for your purchases is actually quite small, so consider paying with your card instead of cash wherever possible.
  • Remember that you’re not just charged for withdrawals. As well as a fee for withdrawing cash, many banks will charge a fee if you use one of their ATMs to check your account balance. You can perform the same task for free online or on your bank’s mobile app, so don’t use an ATM to check your balance unless you’re fully aware of any fees that may apply.

Other foreign transaction fee considerations

A foreign transaction fee isn’t the only debit card issue to be concerned about. If you’re a frequent traveler or you regularly use foreign currencies, you may want to consider:

  • Access. Check how easy it is to access your money while overseas. For example, does your bank have partner ATMs overseas? Do you have a debit card that’s widely accepted internationally, like a Visa or Mastercard?
  • Online banking. If you travel often, you’ll likely want access to online banking when you can’t get to a branch. Some banks will even let you add travel notices to your card online so your account doesn’t end up getting frozen while overseas.
  • Prepaid options. Card providers have come out with various prepaid debit card options for travelers that allow you to load your card with the money you want to spend. These cards let you save on currency conversions and also some foreign transaction fees. If you like your current debit card for everything other than foreign transactions, you can get a prepaid card to use when traveling.

Bottom line

International bank accounts can help make international transactions easier and cheaper, but you’ll need to make sure you’re not accidentally breaking any tax laws. Compare chequing accounts both abroad and in Canada to find one that’s the right fit.

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