# Where best to convert 25,000USD to CAD



## Kalergie (Jan 7, 2011)

Hi guys,

As suggested by a fellow and popular member of our community (TRM), I am planning to convert around 25,000USD to CAD. Now, I wonder what are the best options to do this? My understanding is that banks are the worst option. So what's your best bet on squeezing the most CAD juice out of my USD fruits?

Thanks for the advice!


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## slacker (Mar 8, 2010)

I just converted $20000 CAD to USD on Questrade non-registered account using Norbert's Gambit, and cost about $20. ($10 in bid/ask spread, and another $10 for trade fees)

But you'll need a brokerage account with short selling enabled, and you need to be comfortable trading stocks. Maybe take some learning/reading to get this setup. But definitely way cheaper than any other method known.

I've heard good things about http://www.xe.com though.


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## Kalergie (Jan 7, 2011)

Thanks for this tip. I just read about the gambit and I am a bit concerned about the uncertainty during the operation. I am not used to buying and selling stocks so my concern hails from lack of knowledge.  How much better is the conversion in terms of real dollars when using the gambit. In other words, is it worth the hassle? 

Would it be possible to open a Forex trading account with USD, buy CAD, then move the CAD to my CAD bank account? It appears much easier and there would be no charges during the trade. 

Any thoughts?
Thanks.


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## Argonaut (Dec 7, 2010)

slacker said:


> I just converted $20000 CAD to USD on Questrade non-registered account using Norbert's Gambit, and cost about $20. ($10 in bid/ask spread, and another $10 for trade fees.


Slacker, can you do this instantly or do you have to wait for the trade to settle? Which stock did you use? I've only heard of the TD Waterhouse way, which seems cumbersome. I'm guessing you say, buy BCE and then immediately short BCE.TO. How then, does it even out? I shudder to think of calling Questrade. Or can you just sell BCE.TO?


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## larry81 (Nov 22, 2010)

Why gambit when there is DLR/DLR.U ?


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## investnoob (Jun 29, 2009)

Best way to convert $25,000 US to CAD is to take a time machine to when 1 USD = 1.3+ CAD!

Sorry, I couldn't resist. I don't really have anything constructive to add. 

I would think the answer depends on where you want to put the funds. If you are planning to invest it maybe the bank/brokerage who holds your investments will give you a good rate. If not, you will have to figure out if its worth it to use another service, only to have to transfer it to your brokerage/bank. I can't imagine that the difference would be so great that it would make it worthwhile. 

Would it? Well, maybe it would. 1 penny for ever dollar does add up...


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## HaroldCrump (Jun 10, 2009)

Kalergie said:


> Would it be possible to open a Forex trading account with USD, buy CAD, then move the CAD to my CAD bank account? It appears much easier and there would be no charges during the trade.
> 
> Any thoughts?


The problem with this is that most forex brokers maintain a base currency for your account.
If you select the base currency as USD, then buy/sell the USDCAD pair so far so good.
But when you are ready to withdraw from the account, the brokerage will simply convert everything back to USD and remit you the funds.
OTOH, if you select the base as CAD then they will convert your USD the moment you deposit the funds.
Either way, your action will get nullified.

If you know of a forex broker that will allow you to maintain your account in one currency, but deposit/withdraw in another, then you can do this.


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## m3s (Apr 3, 2010)

HaroldCrump said:


> The problem with this is that most forex brokers maintain a base currency for your account.
> If you select the base currency as USD, then buy/sell the USDCAD pair so far so good.
> 
> If you know of a forex broker that will allow you to maintain your account in one currency, but deposit/withdraw in another, then you can do this.


I don't see why IB wouldn't work. You can select currency of trade. 1 base currency is a deal breaker for me. I live in 3 currencies although I only have a CAD account connected to IB (haven't tried to connect others)


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## atrp2biz (Sep 22, 2010)

Isn't there a holding requirement with IB. For instance, you couldn't deposit CAD, conduct an FX trade and then withdrawal the USD. Unless I'm misremembering, don't they require funds to stay in the account for 10 days or so?


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## m3s (Apr 3, 2010)

atrp2biz said:


> Isn't there a holding requirement with IB. For instance, you couldn't deposit CAD, conduct an FX trade and then withdrawal the USD. Unless I'm misremembering, don't they require funds to stay in the account for 10 days or so?


That could very well be, but 10 days is nothing considering the potential savings if you exchange funds often. For a 1 time thing I would just use knightsbridge or xe.com rather than go through the hassle of getting a brokerage acct just for this. Most brokerage accts have an inactivity fee of some sorts

On $25k, xe.com would probably save you a few hundred compared to the banks and IB could save another few hundred.

Edit: Who said TRM was popular?


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## atrp2biz (Sep 22, 2010)

There's also OANDA. Two pips on a CAD/USD transaction.


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## HaroldCrump (Jun 10, 2009)

mode3sour said:


> I don't see why IB wouldn't work. You can select currency of trade. 1 base currency is a deal breaker for me.


So at IB, you are able to have your balance remitted to you in any currency of your choice?
You can of course trade multiple currency pairs - all FX brokers allow that.
But I wasn't aware that IB would let you withdraw your balance in any currency.
So if I deposit USD into the account, then sell the USDCHF pair, I can withdraw the proceeds as CHF?
If so what is their spread? 2 to 5 pips is usual. Are they tighter than that?


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## m3s (Apr 3, 2010)

Swiss Francs.. not that I know of - USDs.. I assume yes because it is an option for EFT withdrawal from IB. I have not tried to connect my TD or ING USD acct to it as I keep the USDs there for future investments. Trades are settled "in currency of trade" and the currency exchange is *1 pip min $2.50 USD*

Edit: You can wire withdraw CHF from IB for $11USD, Euro $8USD. I may test this for Euros soon


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## Kalergie (Jan 7, 2011)

Hi mode3sour:

I am not that familiar with trading. How much hassle is it to use a Forex account (such as with IB) to simply convert USD to CAD? Is it as easy as:

1) Open FOREX trading account with a base currency USD
2) Transfer USD from my USD bank account to FOREX account
2) Buy CAD 
3) Transfer CAD to my CAD bank account

I could live with that.
Thanks

PS: TRM is popular for me as he has given me good advice.


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## m3s (Apr 3, 2010)

Kalergie said:


> Hi mode3sour:
> 
> I am not that familiar with trading. How much hassle is it to use a Forex account (such as with IB) to simply convert USD to CAD?


Kalergie, as I said earlier for a one-time thing you're probably better to save the hassle and use xe.com or knightsbridge. On $25k you'll save half the fees there and we're only talking about another few hundred in savings with IB. IB would charge $10 USD/month whereas xe and knightsbridge do not


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## Kalergie (Jan 7, 2011)

OK. Thanks for the tips. I will most likely go for xe. 

Cheers


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