If you travel overseas frequently or operate a business in a few different countries, then an international bank account can reduce your banking costs and eliminate unnecessary aggravations. What’s good about an international bank account is that you aren’t required to obtain an account in each country. Instead, you can open an account as a Canadian resident or business owner and then use the account to operate in multiple currencies. To help, we help you compare the current international bank accounts available to Canadians and give a few tips on how to select the best international bank account based on your needs.
Why open an international bank account?
Most countries will not allow you to open a bank account without some form of identification — and that usually includes a postal address, along with a taxation number. In Canada, most banks and financial institutions will require official identification, such as a passport or driver’s license, as well as a Canadian address.
However, if you travel frequently or operate a business that buys or sells outside of Canada’s borders, opening a bank account with international coverage can help alleviate extra fees and unnecessary costs.
For instance, if you travel and stay in the United States for a prolonged period, each year, it might be beneficial to open a US-dollar account. The account would allow you to deposit and withdraw US currency without the need to convert these funds into Canadian currency. Doing this would also help you avoid foreign transaction fees.
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, most banks and fintechs charge between 1% to 3%.
How to avoid foreign transaction fees on international bank accounts
Here are a few ways to stop paying a foreign transaction fee when you swipe your credit card:
Exchange currency before you leave Canada. Converting money at your home bank before you head off overseas could save you the conversion fee.
Consider cross-border banking. 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 prepaid or credit card with no FX fees. Consider getting a prepaid or credit card that doesn’t charge foreign transaction fees. Good options include a HomeTrust Visa or the EQ Bank Card.
Consider a foreign currency account. If you regularly spend or get paid in other currencies, a foreign currency account allows you to hold funds in the international currency of your choice.
Before committing to a multi-currency account, make sure you understand your primary reasons for opening up an international bank account. For instance, do you require a bank account that operates in multiple currencies? Do you need to pay bills in different currencies? Will you need to make global money transfers? Will you require ATM access when in different countries? Different products will be better suited, depending on your needs.
How frequent travellers can reduce banking costs
If you travel frequently, opening an international bank account can help reduce costs when spending and dealing with cash abroad. For instance, opening a multicurrency account, where multiple currencies can be held, reduces the need to convert and transfer funds from one account to another. Another option is to use a credit card or prepaid card that doesn’t charge foreign transaction fees.
Can I open a US account in Canada?
Yes. Many major banks and smaller financial institutions offer USD accounts in Canada. These accounts make it easy to spend, receive and save US dollars with your Canadian bank, without the need to convert to and from Canadian dollars. Some are chequing accounts designed for regular transactions, while others are USD savings accounts that let you earn interest on your balance.
All of the Big Six Banks offer a USD bank account, while online banks like Tangerine and EQ Bank also offer their own US-currency bank accounts. Keep in mind, that these are not US bank accounts. These are Canadian bank accounts that operate in US funds.
How business owners benefit from an international bank account
When operating a company, one of the most important tasks is to keep costs low. This can be hard for businesses that operate in Canada, as well as abroad. Accepting payment and paying invoices in a currency that is not Canadian can often be challenging if your business relies upon a traditional business bank account. While opening a bank account in another country may be an option, it will require more upfront work as you supply financial and legal details to the foreign financial institution. A fast, cheap and reliable alternative to an international bank account is to open a business account with a fintech provider, such as Loop, Vault or Wise.
These fintech firms specialize in offering global accounts that provide business owners with access to multi-currency accounts, global money transfers, and instant worldwide payment and deposit options, all at lower fees.
To help, here are three international business bank accounts to consider:
The process for opening an international bank account is similar to the process of opening a Canadian bank account. In general, you will follow these seven steps:
Go to the financial institution’s website and choose the account you want to open.
Enter your personal information, including your name, date of birth, address, citizenship and occupation.
Verify your identity using a government-issued photo ID, such as a driver’s licence or passport.
If required, verify your address using a bill from a service provider.
If required, verify your income using a pay stub from your employer.
Make a first deposit.
Wait for your bank card.
How to compare international bank accounts
Consider the following factors when comparing international bank accounts:
Chequing or savings. Do you want an international chequing account that provides easy access to your funds whenever you need? Or are you looking for a savings account that lets you earn interest on your foreign currency balance?
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 international bank 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 a foreign currency account that supports multiple currencies? What about one that has a global ATM network that supports your travels? Or a virtual card for online shopping? 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.
Mobile app. Can you manage your international bank account with a user-friendly mobile app? Read some customer reviews to make sure the app will make it easy to manage your money on the go.
Application process. Look for an account that you can apply for online or through a mobile app. This will make it easy to set up your international bank account no matter where you are in the world.
Compare business bank accounts that you can bank with internationally
Find international business bank accounts to help manage your money while travelling or when doing business outside of Canada.
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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.
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 ATM 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 traveller 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 travellers 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 travelling.
Bottom line
International bank accounts can help make multicurrency transactions easier and cheaper. To find the best option, consider looking outside of the traditional banking options, since many fintech institutions now offer better features at a lower cost for travellers and business owners looking for global money management solutions.
International banks in Canada FAQs
There are many banks that offer international accounts, including major global banks as well as multi-currency account providers like Wise. The best international bank for you will depend on which currencies you need to use and how you need to use your account. For example, the best international bank for someone who runs a Canadian business that sells products in the USA may be very different to the best international bank account for someone who is a frequent global traveller. Make sure you compare a range of options to find the account that's right for you.
Yes, some international bank accounts let you simultaneously hold multiple currencies. These accounts are sometimes called multi-currency accounts or foreign currency accounts. One prepaid card that allows you carry up to 10 currencies at once is the CIBC AC Conversion Visa Prepaid Card.
Not necessarily. An international bank account aims to help you with international transactions, and often has special features and benefits to do so. An offshore account is any account that you hold in another country. While some offshore accounts are also international accounts, that isn't always the case. Read our guide to offshore accounts to learn more.
No. While you may be eligible for certain tax loopholes when keeping money overseas, you still need to report it to the CRA and you may still need to pay taxes on any interest you earn. If you use an overseas account to evade taxes, you could end up in serious legal trouble. If you're opening up an overseas or international bank account, it's a good idea to consult a tax professional to make sure you're complying with all Canadian and foreign laws.
Yes. Many people choose to keep their Canadian bank account when they move abroad for a few reasons:
It could be difficult to reopen these accounts if you return to Canada
If you still have bills to pay in the Canada, it's easier to make these payments from a Canadian bank account
You'll save money on foreign transaction fees if you visit relatives or friends in the Canada
That said, many people choose to open up a local account in their new country, so they pay fewer fees on transactions and cash withdrawals.
Yes, but you'll likely pay higher fees and get less competitive exchange rates than you would at a currency exchange company.
Call your bank's customer service line, usually printed on the back of your debit card, to talk to a customer service agent and ask about ATM fees.
Yes. Certain bank accounts and some new challenger banks like Revolut offer low-fee or fee-free overseas ATM withdrawals.
Your bank will generally charge anywhere from $3 to $5 plus 3% of the transaction for using an ATM. On top of that, you'll need to pay the ATM provider's fee, which can vary greatly depending on which country you're in. For a more specific list of fees by country, read our guide to foreign ATM fees.
If you need foreign currency, you have four main options.
Order currency at your bank before leaving.
Order currency through a currency exchange specialist.
Withdraw cash at an ATM in a foreign country.
Exchange currency at a currency exchange in the city you're visiting.
Yes. If you're shopping at an overseas store and/or purchasing in a foreign currency, your bank can charge you a currency conversion fee.
An international bank account is useful in a number of situations, such as if you regularly use foreign currencies, if you're a frequent traveller, if you want to invest overseas, or if you need to send regular transfers to loved ones abroad. With an international bank account, you'll save money on currency conversion costs and foreign transaction fees.
Yes. Several international banks operate in Canada. Some of the biggest banks include Amex Bank of Canada, Bank of America, Barclays Bank, Citibank, J.P. Morgan, UBS Bank and Wells Fargo.
Yes, some Canadian banks offer business investment accounts that allow you to earn interest on your foreign currency balance. For example, Scotiabank and National Bank both offer USD business investment accounts.
Romana King is the Canada Group Editor at Finder and a personal finance expert. As an award-winning personal finance writer and real estate expert, she has spent almost two decades helping Canadians make smarter money management decisions. Her first book, House Poor No More: 9 Steps That Grow the Value of Your Home and Net Worth, launched in November 2021, continues to be an Amazon bestseller and won the Excellence in Financial Journalism Book Award in 2022.
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