Best FX Rates for Canadian Companies: OFX Global Currency Account

Mr. Thrifty’s Pick: the OFX Global Currency Account

If you’re a Canadian company, especially a small business or SME, and are trying to get the bext FX rates, Mr. Thrifty recommends the OFX Global Currency Account (GCA).

The account lets you pay and get paid in most major currencies (USD, EUR, GBP, CAD, AUD and HKD) and you get set up with a virtual bank account that is considered as a ‘local’ account in each country. What this means is that you can avoid paying SWIFT or other fixed banking fees on each transfer. With the GCA, you can also maintain balances in these currencies and decide on the timing of any transfers.

Who is OFX?

OFX is an Australian-based company originally known as OZForex, and has been in the foreign-exchange business since 1998. The company is listed on the Australian Stock Exchange and has more than 250 employees.

OFX has a network of about 115 bank accounts globally and offers over 55 currencies. As an example, when you send foreign currency with OFX, you deposit Canadian dollars into OFX’s local Canadian Dollar account, and it then sends the equivalent amount of money to the recipient from its local bank account in the recipient’s country.

Mr. Thrifty has been using OFX for both his business and personal needs and can vouch for their customer-centric approach. Their foreign exchange rates are very competitive vis-à-vis the typical Canadian chartered bank, especially for small and medium-sized businesses (SMEs) who can’t negotiate FX rates with their banks.

How good are the FX rates?

For example, on the date of this post [26-Mar-2020 16:00 UTC] here were the quotes available for USD-CAD:

Mid-Market Rate 1.4074
RBC 1.3622 (+0.452)
OFX 1.3929 (+0.145)

So, even on a relatively modest trade of US$10,000, using OFX would leave C$300 more in your pocket compared to RBC.

What about customer service?

Actually, a big differentiating factor versus the big banks as well as their disruptor competitors is that OFX has a very responsive customer support service, including an office in Toronto. They have been much more responsive and accessible (including 24/7 phone support) than Mr. Thrifty’s Canadian chartered bank. They will hold your hand while opening the account and help sort out any errors. So, not only do they consistently get you the best FX rates for Canadian companies but they do so with superior customer service.

Sold? Click here to visit the OFX site and open your account.

What is the OFX Global Currency Account?

OFX offers not only transactions but also a type of e-wallet where you can open a virtual bank account in a number of major currencies — USD, EUR, GBP, CAD, AUD and HKD. This is the OFX “Global Currency Account.”

It’s important to note that balances in their virtual accounts are not covered by deposit insurance, so you’ll want to be prudent in managing the balances.

How Canadian companies can use the OFX GCA to get the best FX rates when paying overseas suppliers

A common situation where the OFX GCA can prove useful is when a Canadian business procures goods from a third country, such as China. Those transactions are typically denominated in USD and you’d have to convert CAD to USD to pay for the goods, or else maintain a separate USD business account and pay a monthly fee for your Canadian bank.

Alternatively, you can use your OFX GCA balance in USD to wire funds to your overseas supplier. OFX charges a USD15 fee for transfers where no currency conversion is involved, but this fee can be waived if you sign up via Mr. Thrifty’s link.

The OFX GCA is also a great solution for Canadian companies selling on Amazon USA and other international marketplaces

With your OFX GCA you can use your virtual USD, EUR, and GBP accounts to enter local bank accounts information for your weekly Amazon disbursements.

The OFX GCA allows you to:

Receive Seller Central disbursements from Amazon in currencies local to the specific marketplace: USD, CAD, EUR, GBP
Hold balances in each of these currencies
Repatriate profits home in CAD at a margin of 1% (vs 3.75% when Amazon handles conversion)
Make same currency payments (e.g. USD/USD) at a small margin of 0.5%

So it’s definitely better than Amazon’s internal system.

And here’s why it’s superior to the RBC solution discussed previously:

Better foreign currency exchange rates (based on actual quotes — see example in our Mr. Thrifty’s Google Sheet online rate comparison tool) [Note: if any Mr. Thrifty subscriber wants a copy of the Google Sheet, just send an email to ask@mrthrifty.ca and we’ll send you a link to an unlocked version]
No monthly fees
No minimum balances
Operates in multiple currencies, allowing you to save on foreign currency exchange rates with Amazon EU and UK as well.

Once you link your Canadian company account to the OFX system, transfers are done electronically as domestic debits/credits and don’t attract any bank fees.

What if I’m not a Canadian Company?

While we are writing for our typical reader who is based in Canada, the OFX GCA is available globally and can be equally useful for a business in any country where OFX operates. For example, if you are a US business and selling online in Canada, the UK or Europe. You can use the same link to learn more and sign up for an OFX GCA account here.

The Thrifty Bottom Line on How to Get the Best FX Rates for Canadian Companies

There is no downside to opening an OFX GCA. There are no minimum fees or balances, and you have access to several major currencies.

Whether OFX will offer you the best rate in any particular transaction will depend on the amount and specific foreign currency. They are consistently better than the major Canadian chartered banks and deliver superior customer service. But you should also look into alternatives like TransferWise, which can also be useful in certain circumstances.

Speaking specifically about Canadian sellers on Amazon USA, his advice would be to open an OFX GCA account in USD and arrange for USD disbursements from Amazon to be sent there. You can then choose the amount and timing of any conversions to your CAD account in Canada.

Click here to find out more about the OFX Global Currency Account

Interested in More SME Business Topics?

Mr. Thrifty is contemplating adding a separate section on money-saving tips for Canadian companies, especially small and medium enterprises (SMEs) (not only e-commerce businesses). Let us know if you’d be interested by writing to us: ask@mrthrifty.ca – and feel free to suggest SME topics you’d be interested in learning more about.