The government has heavily regulated money transfers from the US to Cuba since the early 1960s. At the time of this writing, you can send as much as necessary to close relatives — as long as they don’t work with the Cuban government. However, the maximum you can send to people you aren’t related to is capped at $2,000.
For foreign currency, you’ll exchange it into Cuban convertible pesos (CUC), paying a 10% tax when transactions are made in US dollars. If you’re an American visitor, you might save money by first changing your dollars into euros, Canadian dollars or other hard currencies before converting them to pesos.
Banks versus money transfer services
To send money to family or friends in Cuba, you could start with your bank. But no US bank currently conducts business in the Pearl of the Antilles, which leaves you relying on correspondent banks to facilitate your transactions. For most major banks, converting US dollars to Cuban convertible pesos and then sending the funds overseas shouldn’t be a problem.
Still, banks typically charge high fees on transfers, often along with weak exchange rates that reflect wide margins on the mid-market rate. In comparison, an increasing crop of online money transfer specialists offer stronger exchange rates, lower fees and more transfer methods than your local bank that include bank-to-bank transactions and even cash pickups in select countries.
Offering a choice in the way your recipient receives your money, these companies represent a more affordable option when you need to send money to Cuba.
Case study: Alvaro sends money to Cuba
Alvaro works in New York City, but he’s looking to send $1,000 he’s saved back to his parents in Havana. He knows what to expect at his local bank, and he’s hoping for a better deal from a dedicated money transfer specialist.
He finds two companies offering services to Cuba and compares the exchange rate, fees and turnaround to find the best for his needs.
| Money transfer company 1 | Money transfer company 2 | |
|---|---|---|
| Exchange rate | 1 USD = 1.00 CUC | 1 USD = 0.97 CUC |
| Transfer fee | $4 | $10 |
| Transfer method | Bank account | Cash pickup |
| Processing time | 1–3 business days | 10 minutes |
| Amount received (in CUC) | 1,000.00 CUC | 970.90 CUC |
Although the first company allows Alvaro to send more than $20 pesos more to his parents given its exchange rate, the second company offers much faster transfers. Because he isn’t in a hurry, he chooses the first company, preferring to wait a bit longer for the maximum transfer to his parents — saving $6 in fees to boot.
How to compare transfer companies when transferring money to Cuba
Saving money on your next transfer doesn’t have to be expensive — if you know how to compare your options. Pay attention to details beyond the rates and fees to find the cheapest you’re eligible for.
- Exchange rates. Stronger rates mean more money to your recipient, so shop around for a company offering consistently competitive rates. Keep in mind that the best rates may mean higher fees.
- Fees. You’ll typically pay a fee for your transfers — whether a flat rate or a percentage of the amount. Look for companies offering fee-free thresholds — like no fees on transfers of $500 or more.
- Transfer methods. Can you queue up a transfer from your phone or an app? Does the company man a branch you can visit? Find a provider offering a method you’re most comfortable with.
- Transfer options. If this isn’t a one-time thing, look for the flexibility of scheduled payments and hedging options, like limit orders and forward contracts.
- Turnaround time. Depending on your payment and delivery, it can take as little as 10 minutes with some money specialists. Others require several working days to get your funds to your recipient.
- Minimum transfer. Some companies require high minimum transfers, which may not serve you if you need to send only a small amount.
- Pickup methods. Two common options are account deposits and cash pickups from an agent. But depending on where your recipient lives, you might also choose from mobile top-ups, e-wallets and even home delivery.
- Customer service. Learn how and when you can get support, if you need it — by phone, email, app or live chat.
What is a foreign exchange rate?
The exchange rate is how much one country’s currency is worth in another currency. When a country’s currency is strong, it yields more money when exchanging it in a country with a weak currency.Cuban currency is split between the Cuban peso (CUP) — the currency in which Cuban citizens are paid that’s used for staples and nonluxury items — and the Cuban convertible peso (CUC), which tourists use. You’ll exchange US dollars for CUC at money changers called Casas de Cambio (CADECA).
Like most countries, Cuba’s exchange rate is flexible, which means it can change from moment to moment. Factors that influence the exchange rate include interest rates, economic stability and inflation.
Outside of the exchange rate, you’ll pay a 10% US dollar remittance tax.
Options for sending money to Cuba from the US
- Bank transfers. Bank-to-bank transfers are a reliable transfer method when you want to send money to loved ones in Cuba.
- Online money transfer providers. Companies like OFX offer quick, secure transfers to Cuban bank accounts.
- Cash pickup options. Western Union and MoneyGram offer cash pickups at more than 300 locations throughout the country.
- PayPal. Send money through PayPal to just about anyone who owns an account.
- Checks. The US Postal Service and many banks offer international guaranteed checks that your recipient can cash.
Steps to send money to Cuba
- Choose a many transfer provider who sends money to Cuba.
- Register for an account with your name, contact information and date of birth. You might need to upload a valid photo ID.
- Enter your recipient’s name, address and contact details. For bank account deposits, you’ll need to include their bank account information.
- Enter how much you’re sending, confirming the exchange rate and any fees.
- Complete your transaction, saving your tracking or receipt number to track the progress of your transfer.
Who does the US consider a close relative?
The government defines a close relative as anybody who’s related to the sender by blood, marriage or adoption who’s also no more than three generations removed from a common ancestor.Same-day cash transfers in Cuba
In an emergency, your loved ones might not have the time to wait for your much-needed funds. But before you sign up for the one with the fastest delivery, confirm the exchange rate and any fees that apply to your transfer.
Most money transfer companies charge extra for sending your money as quickly as possible. Knowing what to expect could save you a future financial headache.
Tips for picking up cash in Cuba
Cuba is a safe country for international visitors. But that doesn’t mean you can throw precautions to the wind when picking up cash from a money transfer agent.Use common sense to ensure your safety. Make sure you know where your wallet and bag are at all times. Keep your cash concealed from strangers, and deposit it in a safe place (preferably your bank account) as soon as you can. Carrying around a large amount of money can be a recipe for disaster.
