# Best way to change $US to $CDN?



## rglempera (Apr 2, 2011)

I'm a US citizen living in Canada, and I'm not great with $ management. I have a CDN$ chequing acct w/CIBC and I have a US Etrade investment account, which also has a US$ checking component. I'm looking to sell some stock from my Etrade account and make a pre-payment on my INGDirect Mortgage in Canada (CDN$). I have done this in the past by simply writing an Etrade check in US$ and cashing it at CIBC, which I now realize was not wise. The cut they took was ridiculous, and it was a substantial sum ($20k).

I am looking to move another relatively large sum from my Etrade to ING. My two leading options are:

1) Get a US$ acct with CIBC, deposit the check there and then link my CIBC US$ acct to ING and transfer to my mortgage. I heard the ING fx rate is low, today I checked it out and sell is 0.995 and buy is 1.024, so maybe I'm wrong but to me this means the conversion rate is 1.0095 and they are taking .0145, or 1.42% commission (math check pls?). That's not terrible right?

2) Get an XE account and link my Etrade US$ to my CIBC CDN$ acct. I heard they apply a reasonable transaction fee of ~140bps, which is similar to the ING rate.

I'm leaning towards #1 for the add'l benefit of getting US cash etc as needed. But I fear that I'm missing some much better way of converting without getting too crazy complicated -- I read some other threads about buying stock that can be traded on both markets -- I'm not really feeling that though as I'm pretty risk averse. 

Any other ideas or corrections on my thoughts above would be much appreciated, thanks. RG


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## fraser (May 15, 2010)

You can get USD accounts at CIBC and ING. I recently moved a very small amount of cash from our ING USD account to our CAD account. It was so small that I was not concerned with the exchange rate. You can always call them to find out. 

I have found that the CIBC counter rates are not very good.

But, in the past I have had some large US dollar cheques. I called my CIBC Imperial service rep and had a much better rate quoted for the specific day. 

It seems to me that there was a better rate for paper cheques than there was for cash, even if that cash was just being moved from USD to a CAD account. I could be mistaken on this.


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## Sampson (Apr 3, 2009)

I know some guy at the pub at the end of the street.

or the currency arbitrage / Norbert's gambit might be a safer way to go.


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## larry81 (Nov 22, 2010)

DLR / DLR.U without a doubt:

http://www.horizonsetfs.com/Pdf/Education/Converting Currencies Using ETFs.pdf


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## humble_pie (Jun 7, 2009)

larry81 said:


> DLR / DLR.U without a doubt



not really a good idea. OP is moving from USD to CAD. 

the DLRs are only pegged from CAD to USD. In a USD-->CAD gambit, the trader is exposed to currency fluctuation during the time - which can be days, depending on the brokerage, depending on what he does - that it takes to complete the buy/sell loop.

in this move, from USD to CAD, a gambit trader would be better served by using an interlisted stock carrier such as TD, in order to avoid paying the spread fixed into the DLRs. Either way gambit trader is going to open that risk window. He should also choose to phone the broker for an instant sell of the carrier stock.


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## dave2012 (Feb 17, 2012)

We use CIBC Forex. Comes in around .65% which was better than any other option we looked at.


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## rglempera (Apr 2, 2011)

dave2012 said:


> We use CIBC Forex. Comes in around .65% which was better than any other option we looked at.


Thanks dave2012 for the suggestion, looks like i need to trade minimum $100k annually to qualify which unfortunately isn't my situation.

Humble_Pie, I think what you're describing is over my head. I don't have a brokerage acct in Canada, I would be willing to set one up if it meant saving hundreds per trade of $10k+ w/out any incremental risk, but it sounds like there is more risk in the gambit you suggest due to a longer window while the trade is pending, where as with XE I can lock-in the rate I like immediately when I see it.

After reviewing the document larry81 posted, I think my math on ING convesion is wrong, i.e. they charge me the full spread betwen currencies, not 1/2 (so it's ~2.84% I'm paying, not 1.42%). If that's correct, it feels ilke XE is my best bet for converting without the hassle of setting up a Canadian brokerage acct and potentially exposing myself to more risk. 

Or am I out to lunch here? Like I said, I have a lot to learn on finance management...appreciate the insights everyone!


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## humble_pie (Jun 7, 2009)

lempera i think your cautious instincts are A-1 OK perfect for this situation. One does not leap from no canadian brokerage account to arbitraging currencies. Checking out XE.com is a good idea.

long-term, though, if you have a canadian mortgage you must be living in our fair land somewhere? theoretically speaking you are supposed to have a canadian brokerage account, not a US account ... there may be exceptions for parties only temporarily residing in canada ...

not to worry, though, if you are here permanently. A lot of americans i know have US accounts that they just never closed when they moved here. The US brokers are supposed to notice the client's new canadian address & take appropriate action, but apparently many of them do not.


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## CanadianCapitalist (Mar 31, 2009)

You could try someone like Knightsbridge FX.

http://www.knightsbridgefx.com/


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## humble_pie (Jun 7, 2009)

CanadianCapitalist said:


> You could try someone like Knightsbridge FX.
> 
> http://www.knightsbridgefx.com/


yes! CC i was hoping you'd appear. Knightsbridge is the name i was trying to think of (never a client of these firms so their names are not on the tips of the typing fingers.)


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## GoldStone (Mar 6, 2011)

Another option:

http://www.venstar-exchange.com/

They are US-based. I used them one time for a pair of currencies that I can't gambit at my Canadian discount broker. Their spread was way better than XE.com.

I found them through this referral service:

http://www.fxcompared.com/


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## Greenback (Mar 16, 2013)

If you are talking about small amounts of ~cash, say up to $5000, you can buy Canadian traveler's cheques at par at CAA.
They do not charge any premium. We called around and could not find a better rate anywhere.
My wife was doing this with American earnings, and they ended up putting a limit on her transactions.
They now only allow her to buy $3000 once a week.
She has me go in for her as well if she has the need.
We usually wait for a little uptick in the dollar.
IIRC, the last time I went I made around $75 on a $2500 purchase.


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## FrugalTrader (Oct 13, 2008)

@Dave, when using CIBC forex, do you need to call in to make that trade? Or can you do it online?


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## dave2012 (Feb 17, 2012)

Hi FrugalTrader,

Online @ http://www.fxdealing.cibc.com/


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## Jaberwock (Aug 22, 2012)

The cheapest way to flip between C$ and US$ is to have an account with Interactive Brokers. You can transfer money into the account in one currency and exchange it at the going rate (the buy/sell spread is usually less than 0.02 cents, and the commission is $2.50). Then transfer it back in the other currency. This move takes a couple of days, and you will need both a C$ and a US$ account at your bank.

Canadian Forex also offers very good rates (less than 0.5 cents buy/sell spread) for transfers over $2,000. You can transfer electronically to Canadian Forex from TD and BMO. I used them to buy some real estate overseas, and the service was excellent, I saved about $3,000 on the Fx rate versus what CIBC would have charged.


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## rglempera (Apr 2, 2011)

Awesome stuff - thank you everybody for your tips. I'm going with KnightsbridgeFX.


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## Sustainable PF (Nov 5, 2010)

rglempera said:


> Awesome stuff - thank you everybody for your tips. I'm going with KnightsbridgeFX.


Good call - this is what I use as well. They do require a minimum $10,000 trade. For trades under $10k you can look @ https://fx2.xe.com/fxlogin/ (XE Trade)


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## JohnCSRivers (Jun 24, 2015)

*I recently went with Knightsbridge FX*

I recently used knightsbridge fx based on this forum. The minimum is actally $5,000 not $10,000 and they saved me a ton of money on my US house purchase. The man on the phone was very helpful and courteous. I plan on using them in the future


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## besmartrich (Jan 11, 2015)

I think Norbert's gambit is one of strong options.
http://besmartrich.com/2015/06/21/n...dollar-from-foreign-exchange-conversion-fees/

I recently exchanged $US to $CDN and it worked like a charm saving me $1,000. Now is a quite good time to exchange as $US strengthened again.


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