# My bank only pays me $1.01 CAD for $1 USD (which is now at $1.05) - USD to CAD.



## Chris L (Nov 16, 2011)

This is TD bank and it drive me nuts. I bring in a cheque for $100 USD and they give me $101 CAD when the CAD is running at about $0.95.

What gives and what can I do about it?

They said I should get a US account, but then they'll give me only $102 for rather than $101. They're taking 4% just to cash a cheque!

This is scammy.

Ideas?


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## blin10 (Jun 27, 2011)

so you think bank should exchange/convert currency for free ? what world are you living in?


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## MoreMiles (Apr 20, 2011)

blin10 said:


> so you think bank should exchange/convert currency for free ? what world are you living in?


Why not? The doctors in Canada work for free. The CPP retirement pay is free... Isn't everything supposed to be free in Canada? What is wrong to have that sense of entitlement?

It's all about me me me. :chuncky:


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## SkyFall (Jun 19, 2012)

Chris L said:


> This is TD bank and it drive me nuts. I bring in a cheque for $100 USD and they give me $101 CAD when the CAD is running at about $0.95.
> 
> What gives and what can I do about it?
> 
> ...


the rate you are seeing online or on the TV is the market rates... NO ONE gets the market rates! they call it the spread, that's where they are taking a cut. It's like buying a stock, you will NEVER buy at the price you've seen (incorporate the fees & commissions)


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## P_I (Dec 2, 2011)

SkyFall said:


> It's like buying a stock, you will NEVER buy at the price you've seen (incorporate the fees & commissions)


I disagree, buying a stock has a very transparent price setting mechanism and you can control the price you pay via a limit order and your commission (and any exchange fees) are known in advance. 

As the OP has found, dealing with financial institutions for foreign exchange transactions is much the opposite, nothing is transparent and you generally have no control of the price you pay. The financial institution sets the rate and offers it to you, take it or leave it.


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## CanadianCapitalist (Mar 31, 2009)

What's wrong with OP wanting to figure out how to pay less on foreign exchange transactions? Couple of things I can think of that OP can try. (1) Open a USD chequing account. These accounts probably have monthly fees but you can get them waived with all-you-can eat banking packages. (2) When converting at the bank ask for the TD Waterhouse rate which tends to be slightly better than bank rates.


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## Chris L (Nov 16, 2011)

I just say "wow" to the first two posts. You must work for the bank.

Yes, I think 4% fee for cashing a cheque is ridiculous.

I asked about the USD account and the conversion rate was about 1% better. I can get paid via paypal and they will charge 3.5% to accept USD, but not sure if that's the entire rate to deposit CAD. Much more convenient, but I also thought 3.5% was a bit high which is way I asked for cheques instead. I guess if I get enough payment in USD I'd probably get an account.

And yes, I'm looking to save myself some of the money I've already earned rather than pass off an exorbitant rate of commission for someone pushing paper around. 

I think the banks already make enough money and can surely find more economical ways to convert currency. I'm not asking for free, but 4% is robbery.


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## Toronto.gal (Jan 8, 2010)

Chris L said:


> "wow" to the first two posts. You must work for the bank.


Regardless whether they do or not, it's just that they accept current reality [reasonable or not], and also misinterpreted your comment, ie: that you did not expect the service for free, just for less.


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## alingva (Aug 17, 2013)

xe.com is a great site to change exchange... the rate you see there is if you want to exchange at least 5MM.


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## peterk (May 16, 2010)

When I needed US cash for a vacation in the summer I was pondering at work about how to get the money without having to pay an exchange fee. One lady chimed in and suggested I use her bank, RBC, as they didn't charge any fees to exhange money for her US vacation... For a laugh, I checked out their website to see what the spread was. Same as all the other banks...

I think the real "wow" is that many (most?) people don't even have a clue they're being gouged both ways, at a rate you'd expect from a sketchy pay day loan store or casino, all at their trusted local branch of any major Canadian bank!


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## houska (Feb 6, 2010)

For better or worse, spreads like this are not atypical when converting small amounts when it is not worth the infrastructure to set up something more cost effective. I've lived some time in Asia where currency conversion is very competitive (driven by small currency exchange booths), here our economies are just too insular.

If you just have a one-off USD 100 cheque, it's probably not worth it to try to do better. It's just a cost of living in North America.
If you do this moderately often, worth asking around, opening USD account, and converting only larger sums. In my experience, rates get a lot better in the $5000+ range (~1% transaction costs), and even if not by jumping through hoops you can get the transaction costs to 2% instead of the 3-4% you've been quoted. 

It's engrained in our economy/culture. For instance, my employer (and many others) reimburse foreign expenses at the spot rate +2.5% (or at your actual credit card conversion rate) for this reason -- I realize you're not talking credit cards, but the numbers are still meaningful.


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## Chris L (Nov 16, 2011)

My options include opening a USD account with no fees and transferring the $ when the rate is better (gambling) or paying $4.95 monthly fee to get a better exchange rate of about 1%. Right now I calculate that they take about 2.63% off the real time trading value (give or take). Today TD is $0.93 and it's listed at about 0.9563.


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## fraser (May 15, 2010)

This is why we have a USD bank account, a USD credit card, and a no fee FX credit card.


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## Sampson (Apr 3, 2009)

Norbert's gambit?!? (obviously not for $100, but for somewhat larger sums)

(or for those that know about it's existence before Good 'ole Norbert... currency arbitrage )


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## Cal (Jun 17, 2009)

This is why I buy bank stocks...


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