How To Send ACH Payments For Free In Canada: 2025 Guide

# How To Send ACH Payments For Free In Canada: 2025 Guide In Canada, many businesses are looking for cost-effective ways to move money electronically. One option that comes up often is ACH payments—but what exactly is ACH in the Canadian context? ACH, or Automated Clearing House, is a term that originates from the United States. In Canada, the equivalent system is known as EFT, or Electronic Funds Transfer. Despite the difference in terminology, the two systems share similar mechanics. This guide explains what ACH means in Canada, how it works, and most importantly, how you can send these payments for free. ## What is ACH in Canada and how does it work ACH stands for Automated Clearing House, a network that processes electronic payments between banks in the United States. In Canada, we use a similar system called EFT (Electronic Funds Transfer). The Canadian EFT system works through the Automated Clearing Settlement System (ACSS), which is run by Payments Canada. This system handles most electronic payments in the country, including direct deposits, bill payments, and business-to-business transfers. When Canadians talk about "ACH in Canada," they're usually referring to EFT payments. These electronic transfers move money directly from one bank account to another without paper checks or cash. Key differences between US and Canadian systems: - **Processing time:** Canadian EFTs typically take 1-3 business days, similar to US ACH - **Terminology:** What Americans call "routing numbers," Canadians call "institution and transit numbers" - **Regulation:** Different governing bodies oversee each system Both systems are designed for regular, recurring payments rather than urgent, one-time transfers. ## Why businesses choose ACH for cross-border and domestic transfers Canadian businesses use EFT (or "Canada ACH" as it's sometimes called) for many types of payments. These electronic transfers work well for both domestic payments within Canada and cross-border payments to the US. EFT payments cost less than wire transfers and paper checks. Most banks charge between $0-$1.50 per EFT transaction, while wire transfers can cost $20-$50 each. This makes EFT a budget-friendly choice for regular payments. Another advantage is reliability. EFT payments follow a standardized process, reducing errors and ensuring money reaches the right account. The electronic system also creates an automatic record of each transaction, which helps with bookkeeping. For businesses that make regular payments to suppliers, employees, or partners, setting up recurring EFTs saves time and eliminates the need to manually initiate each payment. ## How to send ACH payments for free in Canada To send ACH payments (or EFTs) for free in Canada, you'll need to find a financial provider that offers no-fee electronic transfers. Several Canadian banks and financial platforms now offer free EFT options, especially for business accounts. The simplest way to access free transfers is through business checking accounts that include complimentary EFT services. Many financial institutions offer account packages where a certain number of monthly EFTs come at no additional cost. Some even provide unlimited free transfers as part of their standard business banking packages. Online-only banks and financial technology companies often offer the most competitive options. Without the overhead of physical branches, these providers can offer free electronic transfers as part of their basic service. Another approach is maintaining a minimum balance in your account. Many traditional banks waive EFT fees when business accounts maintain a specified minimum balance, typically between $3,000-$5,000. For businesses sending payments to the US, look for accounts that offer free "ACH to Canada" transfers in both directions. These cross-border capable accounts can save significant money on international transaction fees. ## Step-by-step setting up ACH for your Canadian business ### 1. Choose the right account type Start by selecting a business account that offers free EFT transfers. Compare options from different financial institutions, paying attention to: - Number of free transfers included monthly - Minimum balance requirements - Monthly account fees - Additional features like multi-currency support Credit unions and online banks often provide more generous free transfer allowances than traditional banks. ### 2. Complete the registration process Once you've selected an account, you'll need to register for EFT services. This typically involves: - Providing your business registration documents - Verifying your identity and business ownership - Signing an EFT agreement form - Setting up online banking access Most institutions process EFT registrations within 1-3 business days. Some may require an in-person visit to complete the setup. ### 3. Gather recipient information Before sending your first transfer, collect all necessary information about the payment recipient: - Full legal name of the recipient - Bank name and branch address - Account number - Institution number (3 digits) - Transit/branch number (5 digits) For US recipients, you'll also need their ABA routing number for ACH transfers. ### 4. Set up and send your payment Log into your online banking platform and navigate to the transfers or payments section. Enter the recipient's information and the payment amount. Review everything carefully before confirming the transaction. Most platforms allow you to save recipient information for future use, making subsequent transfers faster and easier. You can also typically schedule recurring payments if you regularly send money to the same recipient. EFT transfers usually process within 1-3 business days. Your online banking dashboard should show the status of pending and completed transfers. ## Comparing ACH, wire, and EFT in Canada When sending money in Canada, you have several electronic options. Understanding the differences helps you choose the right method for each situation. | Payment Type | Processing Time | Typical Cost | Best Used For | |--------------|----------------|--------------|---------------| | EFT/ACH | 1-3 business days | $0-$1.50 | Regular payments, payroll, bills | | Wire Transfer | Same day/next day | $20-$50 | Urgent or large payments | | Interac e-Transfer | Minutes to hours | $0-$1.50 | Small, person-to-person transfers | EFT (the Canadian equivalent of ACH) works best for regular business payments like payroll, vendor payments, and recurring bills. The lower cost makes it ideal for frequent transactions, though you'll need to plan ahead for the processing time. Wire transfers cost more but deliver funds more quickly, often on the same day. They're better for time-sensitive payments or very large amounts where immediate confirmation is important. Interac e-Transfers move money quickly between Canadian accounts using email addresses or mobile numbers instead of account details. They work well for smaller payments but usually have daily sending limits. For sending money between the US and Canada, cross-border ACH/EFT transfers typically take 2-3 business days and cost less than international wires. ## Avoiding common fees and choosing the right platform ### 1. Look for truly free options Some accounts advertise "free transfers" but include hidden conditions. Watch for: - **Monthly limits:** Some accounts only include a certain number of free transfers per month - **Minimum balances:** Free transfers might require maintaining a specific account balance - **Bundle requirements:** Some banks only offer free transfers when you use multiple services Read the fine print carefully before opening an account for free transfers. ### 2. Consider transaction size and frequency The best free transfer option depends on how often you send payments and in what amounts: - For frequent, smaller transfers, look for accounts with unlimited free EFTs - For occasional large transfers, an account with a higher per-transaction limit might be more important - For international transfers, prioritize platforms with competitive exchange rates over transfer fees Many businesses benefit from having two accounts: one for high-volume domestic transfers and another for international payments. ### 3. Compare exchange rates for cross-border transfers When sending money between Canada and the US, the exchange rate often matters more than the transfer fee. A seemingly "free" transfer with a poor exchange rate can actually cost more than a paid transfer with a better rate. Some online platforms specialize in cross-border payments with transparent exchange rates. These often provide better value than traditional banks for international transfers, even if they charge a small fee. ## What the 2025 regulatory changes mean for free transfers Canada's payment system is currently undergoing significant modernization. The Payments Canada Modernization initiative includes several changes that will affect how businesses send and receive electronic payments. The introduction of the Real-Time Rail (RTR) system in 2025 will enable instant payments between Canadian financial institutions. This new system will complement existing EFT/ACH options, providing faster transfers when needed. These changes are likely to increase competition among payment providers, potentially leading to more free transfer options for businesses. The modernized system will also support enhanced data capabilities, making it easier to include detailed payment information with transfers. For businesses that regularly send "ACH to Canada" payments from the US, these improvements should streamline the process and potentially reduce costs. The updated systems will better align with international standards, making cross-border payments more efficient. ## Using free ACH payments effectively in your business Setting up free ACH/EFT payments can significantly improve your business's financial operations. Here's how to make the most of this payment method: For regular expenses like rent, utilities, and subscriptions, scheduled EFTs eliminate the need to manually initiate payments each month. This automation reduces the risk of late payments and associated penalties. When paying suppliers, EFT payments often arrive more quickly than checks, which can help you maintain good vendor relationships. Many suppliers also prefer electronic payments because they're easier to process and reconcile. For payroll, EFT deposits ensure employees receive their wages reliably on the scheduled payday. This is especially important for businesses with remote workers or multiple office locations. Venn offers Canadian businesses a global banking platform that includes free electronic transfers as part of its comprehensive financial solution. With real CAD, USD, EUR, and GBP accounts, Venn makes it easy to send and receive payments across borders without excessive fees. By integrating multiple financial functions into one platform, Venn helps streamline operations and reduce costs. This integrated approach is particularly valuable for businesses that make both domestic and international payments regularly. ## FAQs about sending ACH in Canada ### What's the difference between ACH and EFT in Canada? ACH (Automated Clearing House) is the US term for electronic bank-to-bank transfers, while EFT (Electronic Funds Transfer) is the Canadian equivalent. They work similarly, but operate on different national systems with slight variations in processing times and regulations. ### How can I send ACH payments from the US to Canada? To send ACH payments from the US to Canada, you'll need the recipient's Canadian bank details (account number, institution number, and transit number). Many US banks and payment platforms support these cross-border transfers, though they may take 2-3 business days to process. ### How long do ACH transfers take to process in Canada? Standard EFT/ACH transfers in Canada typically take 1-3 business days to process. The exact timing depends on when the transfer is initiated, which financial institutions are involved, and whether it's a domestic or cross-border payment. ### Can Canadian businesses set up recurring ACH payments? Yes, Canadian businesses can set up recurring EFT/ACH payments through most financial institutions and payment platforms. This requires completing a pre-authorized debit agreement with the recipient's permission and banking details. ### Are there free ACH options for high-volume business transfers? Several Canadian financial institutions offer free or discounted EFT transfers for businesses with high transaction volumes. These may be part of specialized business accounts or negotiated fee structures based on your company's banking relationship and transfer patterns.