Currency Exchange Broker vs Bank
Both banks and dedicated FX brokers can convert currency for Canadian businesses. The difference sits in pricing, service model and the tools available for managing risk. Here is a fair comparison to help you decide.
Pricing
Banks typically embed a margin of roughly 1.5–3% into the exchange rate on business FX, depending on size and relationship. Dedicated FX brokers usually price closer to the interbank mid-market, especially on repeat and larger trades. The exact spread depends on the currency pair and volume.
Service model
A bank generally treats FX as a self-service feature inside online banking. A dedicated broker assigns a named dealer to each client, which is useful for larger trades, forward contracts and any transaction that needs a conversation before it is booked.
Settlement and coverage
Banks and brokers both offer same-day or next-day settlement on major currencies. Brokers often support a wider range of destination currencies and beneficiary types, and can typically arrange staged or scheduled payments more flexibly.
Hedging tools
Banks and brokers both offer forward contracts. Brokers typically make forwards available at smaller sizes and with fewer credit requirements, which is useful for small and mid-sized businesses.
When a bank is still the right choice
If your foreign currency volume is low, your bank relationship is central to lending, and you do not need active hedging support, staying with your bank for occasional conversions is reasonable. For higher-volume, recurring or hedged FX activity, a dedicated broker is usually more cost effective.