Have 600k+ in US$ which I am earning 0.1% on....Need advice for better
I have 600k+ in USD sitting at the bank earning 0.1% and would love to hear some tips on what I can do to earn more. I am more concervative and the way stock market is, want something very safe like a bank or bond? I would like to be able to have access to my $$ in 30-60 days at most if it really earns much more. Second I am worried about protecting my $$. I heard in Canada any USD currency is not protected. In the USA FDIC protects up to 250k and can earn 1%-1.2% in bank. Are there any major tax implications?
Do you need it in $US dollars in the future? If you eventually need it in $C down the road, you might want to take a look at current exchange rates and where they might be in future.
For $US accounts with Canadian banks, RBC offers 0.25% on its online account, so that should probably be your baseline. TD offers 0.2% for that big a pile. Where are you stuck at 0.1% right now? At that size, you might be able to negotiate a match with a comparable big-5 bank to prevent you from moving it out.
ING offers 0.5% and Ally offers 0.65% on US accounts. You are correct that the CDIC doesn't insure foreign currency accounts. This isn't an issue with the big 5 banks - nothing is going to happen to them. It isn't likely an issue with the others, but you'd have to make your own mind easy about any decision.
Not sure where you are, but some provincial credit union guarantee systems (e.g. BC, Manitoba) cover $US accounts. Whether you feel that a particular provincial guarantee is more comforting than no guarantee at an effectively unsinkable giant bank would be another personal decision.
I believe it is pretty hard to open an account with a US bank as a non-resident (or at least without a Social Security number), so that probably isn't an option. And it looks like you'd probably top out around 0.85% there in any case?
I am at TD in a business account and last time I checked was 0.1% but could be 0.2%. I have seen US banks offer 1%+. I do have a social security number there for banking only.
I don't want to convert to CAD just yet until I see where the CAD is heading.
Business accounts would be a different kettle of fish, although it looks like ING offers that same 0.5% for accounts.
If you figure out future exchanges rates, don't forget to let us know...
Plaza: I know I mention this a lot online but Canadian Direct Financial's savings account pays 2%. Their TFSA pays 3% interest. Both are CDIC insured up to $100,000.
If you're a Canadian citizen with TFSA contribution room, you might consider using up that room.
I've read an argument in several places (Canadian Couch Potato comes to mind) that goes something like: a Canadian, who will eventually be spending their money in Canadian dollars, shouldn't worry about currency hedging. Nobody knows what rates will do, though I suppose if I were sitting on $600,000USD, I might be cautious too.
EDIT - at 0.1%, with Canadian inflation north of 3%, money parked at that low rate is actually losing value. I realize that's a pretty simplistic statement but, to me, that makes finding a higher return more urgent. You might have to wait so long for an attractive exchange rate that inflation has eaten up the potential gain in the meantime. Just throwin' it out there.
Last edited by CJOttawa; 2012-06-22 at 10:27 PM.
I can relate to your situation as I own a corporation with my husband and we get 100% revenue in USD.Been thinking of asking my accountant if I can get my biz to give me mortgage(s) and I pay them the same as I pay my bank.
We have a US account with NBT since we travel to the US a lot. We didn't need a social security number.
I would consider Swiss Annuities based on United states dollars.
Better then a swiss bank account no 35% with holding tax
Safe & liquid
When I looked it up rates on net it showed 2.75% interest for U.S dollar but never gave date when rates were posted.
Night & day compared to annuities here there more like a bank account
I have never bought Swiss Annuities but was considering @ one time because the wealth protection so called experts say they are far safer then the Canadian banks. Are they I do not know.
Last edited by lonewolf; 2012-06-23 at 07:29 PM.
Us too but we needed an ITIN.
Originally Posted by dave2012