# USD$ TFSA



## mark0f0 (Oct 1, 2016)

I have a bunch of USD$, and I'd like to buy certain stocks/ETFs denominated in USD$ on the US exchanges. Currently I have a TD TFSA (CAD$), and recently I told TD to open a USD$ TFSA.

TD opened the USD$ TFSA, but much to my horror, I can't seem to actually transfer USD$ into it. Only CAD$, which then goes through TD's currency conversion.

Does anyone know if TD will allow you to contribute USD$ to a TFSA, perhaps through some sort of manual process, and alternatively, does anyone know of a TFSA brokerage account, in Canada, that can accept USD$ from the outside, and be used to purchase USD$ securities?


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## mordko (Jan 23, 2016)

Don't know about TD. Questrade allows one to transfer USD into your TFSA account.


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## Koogie (Dec 15, 2014)

I have a USD trading account at TDDI and I can deposit US cheques and US currency into it at a TDCT teller. Tell them you want to deposit it into your USD TFSA account and supply them with the TDDI account number. They have to do a two step process (deposit it into their branch USD account and from there into your account). Most of the senior tellers and supervisors know how to do it.

If it works for a trading account, it should work for your USD TFSA.

TD, cutting edge, right ??!! lol


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## humble_pie (Jun 7, 2009)

one should keep in mind that the master accounting infrastructure for a registered plan in canada is always CAD, as per minister of finance regulations. So one wants to be careful with how a broker evaluates USD deposits into - or USD withdrawals from - any registered account, in the final CAD figures that brokers must supply to the CRA.

a client might not actually pay any FX fee, but the broker system used to handle the deposits or the withdrawals may be adding a broker FX fee to the CAD amounts deposited or withdrawn, as reported to the CRA.

this happens at the TD, which uses TD USD money market fund as the injection vehicle for deposits into a registered account. The steps go like this:

- client buys USD MMF in US cash or margin account;

- the TD then transfers the MMF holding to the canadian registered account in order to obtain the CAD evaluation for the minister of finance records; this evaluation is said to occur at the broker's FX rate, not the spot rate;

- in a final step, the TD transfers the USD MMF holding to the USD registered account.

notice that the client has not actually paid any FX fee. However, in canadian dollars, his new deposit - & therefore his entire registered account - has been depleted by the near-2% FX fee that most brokers are charging.

i for one think the system is at its most unfair with RRIF withdrawals. When these are withdrawn as USD, a client might not be paying any FX fee on the actual amounts, but his total registered account value in CAD will be dinged to the extent of the broker FX fees.

some brokers have more client-friendly systems. Some have less friendly or will not even offer the service at all.


.


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## m3s (Apr 3, 2010)

On Aug 17 2016 I transferred $1802.25 USD from Tangerine USD saving directly to Questrade RRSP account (holds both CAD and USD balances)

Questrade contribution slip that is reported to CRA says $2316.43 CAD because it has to be reported in CAD as you say (oddly says 16 Aug 2016)

Bank of Canada noon rate on 16 August 2016 says $2318.05 CAD. On 17 Aug 2016 I get $2322.20 CAD. Questrade FTW yet again?!

We will get you converted to the dark side one day yet


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## m3s (Apr 3, 2010)

mark0f0 said:


> alternatively, does anyone know of a TFSA brokerage account, in Canada, that can accept USD$ from the outside, and be used to purchase USD$ securities?


Questrade.


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## humble_pie (Jun 7, 2009)

^^

what is FTW though


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## gardner (Feb 13, 2014)

I have TD RSP and TFSA. They will let you transfer units of TDB8152 (US$ investment savings account) in-kind. That is the only way I have been able to directly contribute $US. You have to phone them and they will quote you an exchange rate that will be used that is based on their $US buy rate. You can transfer partial units of TDB8152 to achieve an exact dollar amount.


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## humble_pie (Jun 7, 2009)

gardner said:


> I have TD RSP and TFSA. They will let you transfer units of TDB8152 (US$ investment savings account) in-kind. That is the only way I have been able to directly contribute $US. You have to phone them and* they will quote you an exchange rate that will be used that is based on their $US buy rate.*




yes, exactly. What i was saying.

it's the utilization of the broker's USD buy rate with its built-in FX fee - multiplied out by enough deposits or withdrawals or both over time - that will negatively impact the official CAD value of a registered account.

a more fair rate would be spot rate, which is very close to bank of canada noon rates.

note: an investor client in the TD system will not directly pay an FX fee on his USD deposits or withdrawals. He is not likely to notice anything amiss. However, the slight impairment in terms of registered account record-keeping in canadian dollars is present, although somewhat concealed behind the scenes.

since other brokers (questrade, BMO) are able to deposit & withdraw USD at favourable spot rates in registered accounts, the TD might be persuaded to change its protocol, if enough clients were to raise the issue. 

.


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## humble_pie (Jun 7, 2009)

here is another broker with a favourable client-friendly protocol for USD deposits into - or USD withdrawals from - registered accounts.

recently at BMO i withdrew a US option in kind from TFSA. It was difficult to find a licensed representative who knew in advance how this would be handled, so out of curiosity i paid very strict attention to the entire procedure.

BMO doesn't use USD MMFs as deposit/withdrawal instruments but instead manually evaluates each USD deposit or withdrawal at spot rate. This is the best rate for an investor client.

it appears from m3's example above that questrade is following the same procedure. This is a highly client-friendly procedure.

at BMO, the withdrawal took a number of days to complete itself, which was understandable considering the handwork involved for the back office. 

oddly enough, as with m3's questrade example, there was slippage of a day or 2 at BMO, plus concomitant slippage of the spot rate itself. None of these details amount to a hill of beans though. The key thing to appreciate is use of the spot rate for calculating USD deposits or withdrawals.

in the end, the BMO result was perfect. All information, including the spot FX rate used to evaluate my US option & the amounts in both USD & CAD, was clearly displayed on the month-end statement.

.


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## gardner (Feb 13, 2014)

humble_pie said:


> the slight impairment in terms of registered account record-keeping in canadian dollars is present


Yes. In the case of an RRSP, this is offset by a slight inflation of the tax deduction, compared to the fair value that is contributed.

I think if you make a point of Norbert-Gambit arbitrage on the way out, you can avoid getting cheated -- as long as you can accept $CAN coming out. This is sort of what I have planned. Ultimately my expenses are in $CAN.


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## humble_pie (Jun 7, 2009)

gardner said:


> I think if you make a point of Norbert-Gambit arbitrage on the way out, you can avoid getting cheated -- as long as you can accept $CAN coming out. This is sort of what I have planned. Ultimately my expenses are in $CAN.



yes, i imagine most retirees will wish to receive CAD as the final stage.

but gambits only work for interlisted stocks. US stocks, themselves, are almost never interlisted. Yet many RRSPs are overloaded with US stocks because the taxation - no US withholding on US dividends - has been favourable.

what happens to these USD-heavy RRSPs when they become RRIFs, with all their mercks, apples & proctor & gambles still on board? these can only be sold for US dollar cash. Are you suggesting that the RRIF holder must then do a gambit trade - say, caper through a TD gambit or an RY gambit - in order to change his USD into CAD, which he can finally withdraw home free? what about the now-famous higher agent commissions at the TD right now, for gambit sell transactions? 

we are running into high costs here. For example, sell 100 AAPL with a $9.99 USD commission. Gambit the proceeds for another $9.99 USD (buy side) plus $43 CAD (sell side.) Costs are now close to $70 CAD, just for one withdrawal.

this doesn't strike me as very cool. Me i think it would be better to move the account to a more amenable broker. In my limited experience (one recent USD withdrawal from TFSA) BMO uses a spot rate, may therefore be a more amenable broker. Another poster upthread says questrade uses spot rate, at least for deposits. Another cmffer says he pays $30 per quarter for the spot rate privilege at scotia, although the fee can be turned on & off per quarter as needed.

.


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## gardner (Feb 13, 2014)

humble_pie said:


> what happens to these USD-heavy RRSPs when they become RRIFs


In my imagination, I am picturing rebalancing towards fixed income and cash somewhere along the line, such that my RRIF withdrawals will be from a HISA component, converted from bonds or some such a few years prior, and previously norberted over from US equity a few years before that. I hadn't really pictured being in a situation where monthly dinking with such things would come into play.


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## m3s (Apr 3, 2010)

humble_pie said:


> what is FTW though


for the win, duh! :smug:

My RRSP is maxed entirely USD yet my US allocation is still below 30% target. Norbits gambit is very easy at Questrade so I'd just use DLR on the way out. But by then who knows if norbits gambit is still required or if CAD even exists anymore

We could all be on USD, yuan or bitcoin by then


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