# TD Waterhouse - Transfer CAD to USD?



## Kaitlyn (May 13, 2011)

I have a "Discount Brokerage" account with TD waterhouse.

This has what seems like 3 "sub accounts"
- CDN Cash
- US Cash
- SDRSP
(I also have a separate account listed which just holds TFSA)

I have some cash balance in both CDN cash and US cash. I want to put more into US cash, from CDN cash 

What is the most cost-effective way to do this?


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## avrex (Nov 14, 2010)

I'm assuming those two accounts are TDW non-registered accounts

How much money are you interested in transferring? 
If it's a smaller amount (for example, $5000), you can accept the forex charge i.e. 5000*.015 = $75

If it's a larger amount, you may want to investigate an alternative such as the following.

*TDW non-registered account*
a) CC has updated this information (July 27,2011)
Instant Norbert Gambit for All TD Waterhouse Investment Accounts
TD Waterhouse representatives say they are ready now to execute the sell sides of instant stock gambitting pairs for all clients with every size of non-registered account (thanks CC)
b) CC's previous post on the use of the "DLR and DLR.U" gambit (May 25, 2011)
Note. There will be no individual security risk over the time (ie. 3 days that) it takes to journal the shares over because you will use DLR/DLR.U instead.
A Foolproof Method to Convert Canadian Dollars into US Dollars


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## TDCanada (Mar 17, 2011)

Kaitlyn said:


> I have a "Discount Brokerage" account with TD waterhouse.
> 
> This has what seems like 3 "sub accounts"
> - CDN Cash
> ...


Hi Kaitlyn. It's Chris from TD. Here's our reply from before. 

We saw your post and wanted to provide some help. Foreign exchange rates vary from minute to minute, so it's not very easy to time transfers. However, if you complete the transfer through Web Broker, you'll be quoted the best rate TD Waterhouse can offer you at the time of the transaction. You then have one minute to decide if it's favourable to you or not. If not, you can cancel the request and try again at a later time. For more info though, we'd recommend that you call TD Waterhouse at 1-800-465-5463, available 24/7. Hope that helps! ^CT


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## slacker (Mar 8, 2010)

@Kaitlyn: You ask for the most cost effective way of doing this.

This depends on how much money you are transferring, and how much your trading cost is. I'll outline the solution base on all possible parameters:

If the amount is a small amount, then doing what "TDCanada" says may well be most cost effective. What "TDCanada" failed to mention is the amount of fees they will charge you. In general, we have found TD Canada to be charging about 1.5% above what the spot market rate. So if you want to transfer $1000, TD Canada will charge you about $15 in hidden fees by giving you a worse than market rate.

This doesn't sound too bad, but the fee scales up linearly when the amount transferred is increased. So the fee becomes $150 if you are transferring $10,000, and a whopping $1,500 when converting $100,000.

Why TD would choose to use this opaque pricing structure, I will leave this as an exercise for the reader.

If your trading cost is $10/trade, and transferring less than $2000, then it is more cost effective to go with TD. They will charge you $30 for the transfer. If more than $2000 then the most cost effective way is to do Norbert's Gambit (one of the variant listed above). 

For example, to transfer $50,000, the cost of norbert's gambit is approx: 2 x $10 in trading fee + 2 x bid/ask spread of 0.2% of principal = $20 + 0.4% * $50000 = $220. TD would had charged you $750 in fees. You would had saved $530 in fees.

If your trading cost is $30/trade, then the break even point becomes $5455. See:

http://www.algebrahelp.com/calculat...?equation=60+++.004+*+x+=+.015+*+x&solvf=AUTO

Norbert's Gambit does require a little know how, luckily there's lots of documentation, and we are here to help. 

The question then becomes, is saving hundreds of dollars in fees worth the time and effort involved in learning to do the gambit.


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## humble_pie (Jun 7, 2009)

that tdcanada social media marketing representative is such an outrageous spammer.


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## slacker (Mar 8, 2010)

Where is TRM, when you need him. "TDCanada" totally quote posted there !!


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## CanadianCapitalist (Mar 31, 2009)

TDCanada said:


> Hi Kaitlyn. It's Chris from TD. Here's our reply from before.


Hello TDCanada. OP's question was regarding a cost effective way of transferring from CAD to USD. You should know that TD Waterhouse's exchange rates are most definitely not always the most cost effective way of exchanging currency. Since your initial post did not address OP's question, I went ahead and deleted it. Now, since you posted the exactly the same thing yet again, I'm going to give you a warning. If you persist in spamming the forum with meaningless marketing posts, you will be banned.


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## larry81 (Nov 22, 2010)

I just finished performing my first currency conversion using DLR/DLR.U in my TDWH non-reg acccount. Here how it went:

1. Buy 5,070 DLR at ask price of 9,86$ (9.99$ commission)
2. Wait 3 days for trade to settle
3. Call TDWH to transfer DLR to USD account
4. Sold 5,070 DLR.U at bid price of 9,93$ (9.99$ commission)

49990.20 CAD$ = 50345.10 USD$

Everything went as expected, i will do it again. Much better than using interlisted stock imho.


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## Kaitlyn (May 13, 2011)

larry81 said:


> I just finished performing my first currency conversion using DLR/DLR.U in my TDWH non-reg acccount. Here how it went:
> 
> 1. Buy 5,070 DLR at ask price of 9,86$ (9.99$ commission)
> 2. Wait 3 days for trade to settle
> ...


Hmm... I thought you DIDN'T need to wait the days for the settle and could do it all same day?


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## larry81 (Nov 22, 2010)

Kaitlyn said:


> Hmm... I thought you DIDN'T need to wait the days for the settle and could do it all same day?


Thats what i read too but i just followed the guide provided by horizon:
http://www.horizonsetfs.com/Pdf/Education/Converting Currencies Using ETFs.pdf


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## humble_pie (Jun 7, 2009)

kaitlyn at tdw instant gambits can only be performed in registered accounts.

in non-reg'd (& the poster did specify non-reg'd) the client has 2 choices:

1) take the slow DLR/DLR/U train, wait for the journal, pay cheap online commissions for both the buy & the sell sides.

2) take the rapido & phone a licensed representative for the sell side. The rep will be able to sell instantly. This trade will cost a full phone commission. For tips on how to do this gambit pair with max efficiency, Canadian Capitalist blog offers this article:

http://www.canadiancapitalist.com/instant-norbert-gambit-for-all-td-waterhouse-investment-accounts/

note that the DLR/DLR.U combo only works for the direction canadian dollar to US dollar, because only DLR.U is pegged. On the return trip, ie travelling from USD DLR.U to CAD DLR, the trader will be exposed to currency fluctuation for the 5 days of the voyage. I am mentioning this because the DLRs are really only gambits-with-training-wheels, whereas the real thing is fast gambits w interlisted stock.


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## humble_pie (Jun 7, 2009)

i know it's a lot of if if if if if detail.

but somebody doing an instant gambit at tdw either in reg'd or by phoning a licensed rep would *never* use the DLRs.

no need to pay those basis points as fees to horizons beta.

gambitter would instead use an interlisted carrier stock. Something fairly calm. Not too volatile, because he's going to have a risk window open for a couple minutes. TD bank itself is a good carrier stock imho.


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