# Moving money back from the USA to Canada



## buhhy (Nov 23, 2011)

Hey guys, I need a little advice there,

I've been working in the US for the past few months as an intern and I need to move my hard earned money back to Canada. I've probably got around 10k in a Bank of America account. I have a Questrade TFSA account, but not a normal account. Is it worth the trouble to open another account and gambit, or should I just eat the forex conversion fees and just use traveler's checks? Is it even possible to transfer from a US bank to a Questrade USD account? How do I even perform the gambit?

I'm moving back in approximately a month, so I should probably get all of this set up beforehand.

Thanks for your help.


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## AnimeEd (Jul 22, 2012)

I have not done it before but found some resources

http://www.finiki.org/wiki/Norbert%27s_Gambit
http://www.northernraven.ca/financial/NGcalculator.php
http://canadianmoneyforum.com/showthread.php/3731-Norbert-s-Gambit-calculations

Playing with the calculator, it seems like it really depends on the spread you are getting with your bank.


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## humble_pie (Jun 7, 2009)

buhhy said:


> ... I've probably got around 10k in a Bank of America account ... Is it worth the trouble to open another account and gambit, or should I just eat the forex conversion fees ...



gambitting is not usually used for amounts below 5k-10k, plus in addition it is a skill that has to be learned. It is most useful for parties who are going to repeatedly exchange USD into CAD or CAD into USD, or both, for many years to come.

i would imagine it would take a couple of hours just to study the literature & analyze what kind of transaction might be possible with a questrade account, not including the logistics of walking of the cash from its present deposit with a US bank over to a canadian brokerage account.

there are far better articles on gambitting than the links proposed just upthread, but i am wondering if all the necessary effort would be worth it. A broker would be likely to charge perhaps $150 in FX fees on 10,000 to exchange from USD to CAD. There is risk involved in gambit trading & the outcome cannot be guaranteed, especially when travelling from US to canadian currency. One has to wonder if it is worth it for a busy person to spend so much time, prepare to take the gambit risk, etc in order to save a mere $150 ...


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## brad (May 22, 2009)

Back in April I deposited a US cheque for about $10K into my ING Direct Canadian $ bank account. ING charged no fee and the exchange rate seemed reasonable (0.9770 in mid April). They did place a hold on the deposit for about two weeks, but the whole thing went very smoothly.


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## buhhy (Nov 23, 2011)

I just checked the Bank of America forex spread, and it seems really bad. Their conversion rate is 1.0538 USD to 1 CAD, meaning they have a spread of 6%?! That's almost $600 lost in conversion with the current 0.9972 rate. Seems like a ripoff.


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## humble_pie (Jun 7, 2009)

yikes i hope you will put that bank of america proposal at the very bottom of your action list.

an efficient thing to do might be to stick with questrade since you already have an account there. Opening a 10k account at another institution seems as if it might be a bureaucratic hassle.

i'm not a questrade client but i believe their FX fees are as low as any. Brokers should not be charging more than a maximum of about 1.50% as FX fee (this is in addition to the actual wholesale exchange rate) on an amount of $10,000 imho. 

can you open a cash or margin account - essentially a non-registered account - with questrade. Specify that it is to have both a canadian side & a US side. You might have to send them a minimum amount to open the account, i believe it might be as low as CAD 1,000. Ideally, since you're already their customer, they'll open a non-registered account without any deposit.

the next suggestion is going to sound ridiculously low-tech. But you could get a cheque in USD payable to yourself, or write a cheque in USD to yourself, from the bank of america for the full closing balance of your account when you close it. Then send that cheque to questrade for deposit as USD into your new non-registered account. There will most likely be a long delaying hold placed on such a cheque while it clears. This could be as long as 30 days.

once the US dollars appear in your questrade account, you could invest in US securities, or accept the broker's lower FX fee to convert to canadian, or even try your hand at gambitting the USD into CAD.


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## humble_pie (Jun 7, 2009)

brad said:


> Back in April I deposited a US cheque for about $10K into my ING Direct Canadian $ bank account. ING charged no fee and the exchange rate seemed reasonable (0.9770 in mid April).



i've always believed that ING has harsh FX rates & now here is a bit of proof.

brad you were charged an FX fee but it was hidden in the exchange rate you were quoted. It looks like they hit you up more than 2% ouch.

the bank of canada noon rate for 16 april/12 was .9976, but your quoted rate was .9770.

retail clients will never obtain anything like the money-centre bank rates, of course, but a 2% markup is too steep imho. Generally, brokers have better rates than banks. For 10k, i'd expect to pay a maximum FX rate at a broker of about 1.50%, if i were paying to exchange.

although i don't pay, i gambit.


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## brad (May 22, 2009)

humble_pie said:


> i've always believed that ING has harsh FX rates & now here is a bit of proof.
> 
> brad you were charged an FX fee but it was hidden in the exchange rate you were quoted. It looks like they hit you up more than 2% ouch.
> 
> the bank of canada noon rate for 16 april/12 was .9976, but your quoted rate was .9770.


Good to know this, thanks for pointing it out! I have a larger cheque coming later this year or early next so will figure out a different way to convert it. I have a US bank account in the States and could deposit it there and do an XE Trade transfer to my ING Canadian dollar account.


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## buhhy (Nov 23, 2011)

brad said:


> Good to know this, thanks for pointing it out! I have a larger cheque coming later this year or early next so will figure out a different way to convert it. I have a US bank account in the States and could deposit it there and do an XE Trade transfer to my ING Canadian dollar account.


How is XE btw?


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## brad (May 22, 2009)

I think you can get a slightly better rate elsewhere, but I've had no problems with XE, been using them for about five or six years now.

One consideration: I know when I transfer money from my Canadian to my US account (in my US bank in the States), there's a $10,000 annual limit. I believe that is set by the US government as part of the anti-terrorism or maybe anti-money laundering rules. XE keeps track of this for me and tells me how much I can transfer based on how much I've already transferred this year. I haven't looked into whether there's a similar limit for transferring money from a US-based bank account to a Canadian one.


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## buhhy (Nov 23, 2011)

brad said:


> I think you can get a slightly better rate elsewhere, but I've had no problems with XE, been using them for about five or six years now.
> 
> One consideration: I know when I transfer money from my Canadian to my US account (in my US bank in the States), there's a $10,000 annual limit. I believe that is set by the US government as part of the anti-terrorism or maybe anti-money laundering rules. XE keeps track of this for me and tells me how much I can transfer based on how much I've already transferred this year. I haven't looked into whether there's a similar limit for transferring money from a US-based bank account to a Canadian one.


What rate were you getting, if you don't mind me asking?


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## brad (May 22, 2009)

I don't keep track (I only do one or of these conversions per year, usually for amounts under $1,000, and the last one I did was in 2011), but right now they are quoting a rate of .994413 and Bank of Canada right now is .9948.

Maybe not so great after all, but it's convenient.


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## marina628 (Dec 14, 2010)

I use a European poker room deposit usd withdrawn in CAD and I am getting 3% higher than forex rates lol.Just wanted to share this story definitely do not recommend this as an option


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## peterk (May 16, 2010)

Possibly irrelevant, and carries it's own risks, but look into the cash exchange rate at the airport from which you are flying back to Canada. Some airports (at least the few outside NA that I've been to) provide no fee exchange that you might be able to convert some or all of your cash at.


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## brad (May 22, 2009)

peterk said:


> Possibly irrelevant, and carries it's own risks, but look into the cash exchange rate at the airport from which you are flying back to Canada.


I don't think they'd convert $10,000, but more importantly even though it's "no fee" there are in fact hefty fees built into their exchange rates. You'd be better off getting it exchanged at a bank -- I avoid those cash exchange booths like the plague.


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## yupislyr (Nov 16, 2009)

brad said:


> One consideration: I know when I transfer money from my Canadian to my US account (in my US bank in the States), there's a $10,000 annual limit. I believe that is set by the US government as part of the anti-terrorism or maybe anti-money laundering rules. XE keeps track of this for me and tells me how much I can transfer based on how much I've already transferred this year. I haven't looked into whether there's a similar limit for transferring money from a US-based bank account to a Canadian one.


Are you referring to XEtrade's trading limit perhaps? I have never encountered any annual limit to transfer money to the US via XE. XE's trading limit is only for whatever trades you have open at the time. Once any open trades have been processed and the money sent, that room is available again on your trade limit. My trade limit is 10K too and I'm well over 10K in total of money transferred this year.

And it's not a hard limit. You can ask XEtrade to increase/decrease the limit.


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## brad (May 22, 2009)

yupislyr said:


> I have never encountered any annual limit to transfer money to the US via XE.


Interesting, I must have misunderstood their literature and instructions; I thought they said there was an annual limit of $10K due to money-laundering and anti-terrorist regulations but I must have been mistaken.


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## humble_pie (Jun 7, 2009)

i did notice the supposed 10k annual limitation, too. I don't believe there's any annual limit to transactions between canada & the US. There is anti-money-laundering legislation requiring, among other things, that every cross-border transaction over 10K be forwarded to a federal inspection service. In canada this agency is, i believe, FINTRAC, under the minister of finance. I don't know the name of the US equivalent, but there would be one.

more trivia: it might be useful to mention out that the stated CAD/USD exchange rate posted on XE's website is *not* the rate that a customer is going to get. It is, instead, the wholesale or money-centre bank rate being charged for transactions of millions of $$. In addition, it's a median rate; that is, every posted figure is the median point between the buy & the sell which had taken place only a half-second before.

the retail customer will be offered a rate easily a full percentage point less for his currency purchase or sale.


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## brad (May 22, 2009)

So if one were to draw up a sort of hierarchy of ways to transfer money from CAD to USD or vice versa, would it shake out something like this (from the lowest-cost to highest-cost options)?

The gambit (lowest cost, but with some risk and complication)
XE Trade (higher cost but cheaper than a bank -- there are probably cheaper services out there than XE, someone can add them to this hierarchy)
Traditional bank or credit union (high cost)
Airport or streetcorner bureaux de change (highest cost)


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## humble_pie (Jun 7, 2009)

good list brad. Perhaps could number it, to make the divisions clearer ?

(on 2nd thought maybe i'd go something like this):


1. Lowest cost.
a) the gambit (some risk & complication; requires a learning phase)
b) forex trading at interactive brokers or elsewhere (requires a learning phase)

2. Higher cost but cheaper than a bank.
a) XE trade
b) Knightsbridge Foreign Exchange

3. High cost: traditional bank or credit union

4. Highest cost: Airport, hotel or streetcorner bureaux de change


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## m3s (Apr 3, 2010)

humble_pie said:


> good list brad. Perhaps could number it, to make the divisions clearer ?
> 
> (on 2nd thought maybe i'd go something like this):
> 
> ...



That's how I would rank them as well. I use all of those on a regular basis, depending on the situation. I would say I avoid option 4 like the plague, but many situations there is just no alternative for a short visit to the many random currencies. The $10k limit must be for USA only as I have transferred far more with XE, and they also post better rates for transfers far far above $10k. Maybe it has to do with the $10k limit you see on declaration forms when entering a country. The limit I've hit is actually the Cdn bank which will only transfer so much electronically at one time... luckily XE will accept multiple deposits as one if you warn them ahead of time while negotiating a better rate.

Ref some comments above about ING, I have tested that theory now around Europe Asia and USA and I don't see any major difference between ING's rate and TD Select Service rate. I get free international withdrawals from both, but for larger deposits it's actually much cheaper to withdraw from a Euro bank with the regulated fees.


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## MrMatt (Dec 21, 2011)

I'd actually watch the in mall moneychangers, I've seen them have some pretty tight spreads occasionally.


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## m3s (Apr 3, 2010)

MrMatt said:


> I'd actually watch the in mall moneychangers, I've seen them have some pretty tight spreads occasionally.


Haha but then you have to account for the cost of a decent briefcase to carry $10k+ and armed bodyguard, assuming the malls stock over $10k CAD


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