best way to convert USD to CAD
Moderator: Mark T Serbinski CA CPA
best way to convert USD to CAD
Single US resident in NY here (Canadian on TN), non resident of Canada.
Due to uncertainty of future, I realize a significant amount of my wealth (savings and investments) are denominated in USD. While it's pretty strong right now I'd like to start converting some to CAD while they're high before it's too late, plus saving rates are higher in Canada. I can move the USD from US to Canada, but the conversion within the Canadian bank itself is horrible.
Without opening a non sheltered brokerage account in Canada (so no norbert gambit), what is the best way of converting USD to CAD (10k to 100k this year) that's does not have any tax consequences?
Transferwise looks ok, but still charges $500 to $600 for 100k, is there any way to lower it?
Due to uncertainty of future, I realize a significant amount of my wealth (savings and investments) are denominated in USD. While it's pretty strong right now I'd like to start converting some to CAD while they're high before it's too late, plus saving rates are higher in Canada. I can move the USD from US to Canada, but the conversion within the Canadian bank itself is horrible.
Without opening a non sheltered brokerage account in Canada (so no norbert gambit), what is the best way of converting USD to CAD (10k to 100k this year) that's does not have any tax consequences?
Transferwise looks ok, but still charges $500 to $600 for 100k, is there any way to lower it?
Re: best way to convert USD to CAD
I found out that the direct conversion rate at TD Waterhouse is ok, a little worse than transferwise but a lot better than TDCT.
Is there any CRA/IRS tax consequence if I were to transfer USD from my Canadian bank to a family member (non US person) who can perform USD->CAD conversion at TD Waterhouse investment brokerage account, then transfer CAD back to me?
The exchange of currency only happens once so I don't think there's any impact in terms of gains. The only thing I can think of is gift tax on IRS side but I''m getting the full amount back so not sure how that works.
Is there any CRA/IRS tax consequence if I were to transfer USD from my Canadian bank to a family member (non US person) who can perform USD->CAD conversion at TD Waterhouse investment brokerage account, then transfer CAD back to me?
The exchange of currency only happens once so I don't think there's any impact in terms of gains. The only thing I can think of is gift tax on IRS side but I''m getting the full amount back so not sure how that works.
Re: best way to convert USD to CAD
I've used Knightsbridge in the past. The rate is not bad but requires a canadian bank account in usd. The best option is Norbert's Gambit.
Go to the Canadian Portfolio Manager website (for great Canadian Couch Potato investment details too) and they spell it all out. A bit of work but certainly the best rate you can get. Good Luck
Go to the Canadian Portfolio Manager website (for great Canadian Couch Potato investment details too) and they spell it all out. A bit of work but certainly the best rate you can get. Good Luck
Re: best way to convert USD to CAD
Thanks I'm aware of Norbert's Gambit but that requires investment brokerage account inside Canada. As non resident I can't open one and it'll also add to IRS tax reporting hassle with the transaction.
I already have both USD and CAD account with TDCT and can do the conversion online, but their rate is terrible.
I already have both USD and CAD account with TDCT and can do the conversion online, but their rate is terrible.
Re: best way to convert USD to CAD
Using Interactive Direct may be a cheap option. I haven't opened an account yet, so don't have first-hand experience.
See:
http://blog.plsoucy.com/2012/11/best-wa ... e-on-fees/
http://blog.plsoucy.com/2013/03/convert ... ers-howto/
Cheers,
Bumble
See:
http://blog.plsoucy.com/2012/11/best-wa ... e-on-fees/
http://blog.plsoucy.com/2013/03/convert ... ers-howto/
Cheers,
Bumble
Re: best way to convert USD to CAD
Thanks all but I want to avoid opening an investment brokerage account. US resident here so it is a hassle on IRS reporting next year.
Question, suppose I find someone in Canada who wants to do exchange with me (I buy CAD with my USD, at a rate we both agree), and this all gets done through bank transfer into each other's account, what is the IRS reporting requirement, if any? I think that's the closet to market rate option.
Question, suppose I find someone in Canada who wants to do exchange with me (I buy CAD with my USD, at a rate we both agree), and this all gets done through bank transfer into each other's account, what is the IRS reporting requirement, if any? I think that's the closet to market rate option.
Re: best way to convert USD to CAD
Actually the interactive broker may be possible but with an account based in US instead, the only thing is I won't have an easy way to get the CAD from US to Canada after buying them.
Re: best way to convert USD to CAD
I used Interactive Brokers. As a US resident, you'll need to open a US Interactive Brokers account (interactivebrokers.com). There is a monthly account maintenance fee, but it's waived if you hold $100k in the account (and I think there's also a trial period where the waive the fee).
I think it's (slightly) cheaper than Norbit's Gambit, but the biggest advantage is that the conversion settles instantly. To execute the conversion, you "sell" a security called USD.CAD on the Interactive Brokers platform. Both CAD and USD can be held in the same account.
To move the money to Canada after you convert, you can just execute an international wire. That's what I did to move money for my home purchase in Canada. There is no cost to transfer money out from Interactive Brokers, but the receiving bank in Canada will probably charge you to receive the wire.
I think it's (slightly) cheaper than Norbit's Gambit, but the biggest advantage is that the conversion settles instantly. To execute the conversion, you "sell" a security called USD.CAD on the Interactive Brokers platform. Both CAD and USD can be held in the same account.
To move the money to Canada after you convert, you can just execute an international wire. That's what I did to move money for my home purchase in Canada. There is no cost to transfer money out from Interactive Brokers, but the receiving bank in Canada will probably charge you to receive the wire.
Re: best way to convert USD to CAD
Interesting, thanks for the idea. I didn't know I could wire CAD from a US based brokerage to Canada.
I'll look into it. I already have TD Ameritrade so I'll check with them first if I can do it similarly.
I'll look into it. I already have TD Ameritrade so I'll check with them first if I can do it similarly.
Re: best way to convert USD to CAD
look into Remitr for low cost wire options
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Re: best way to convert USD to CAD
Schwab does it USD to CAD conversion for market rate as per XE.com at about 1% commission. Very competitive rates.