[brad]

I'm a dual citizen who moved back to Canada seven years ago after living in the States most of my life. I still have a US bank account in Vermont that I use for cash and other expenses while traveling in the US (all my siblings live in the US, and my employer is based there). But I'm paid in Canadian dollars and most of my money and assets are here now.

My current strategy is to use a TD Borderless account to get a good rate for conversions from Canadian to US dollars. But this is problematic because the nearest TD branch is a good 45 minutes from my place and there aren't that many TD ATMs in my city, so I don't have my main account there. I pay $60/year for my Borderless account, and given that I typically transfer only two or three thousand bucks a year I'm not sure it's actually gaining me much. I know you can get a free Borderless account with TD's premium banking package, but as I said, TD is not a very practical choice where I live. Plus, I'd rather not tie up $5,000 just to get a free account.

From the Borderless account, I write cheques in US dollars and deposit them in my TD bank account in the US. If your US branch is based in Maine you can have the transfers done wirelessly without cheques, but my branch is in Vermont so I can't do that. I used to just write cheques in Canadian dollars and have them do the conversion, but they charge a hefty fee and the conversion rate is lousy so I was losing quite a bit with every deposit.

I assume there's got to be a better way to do this. I do have an ING account and notice that they have a US dollar account option, but I still have to be able to transfer that money to my TD bank in the US. Anyone have ideas?

The key points are:

1. I don't keep a lot of money in my US-based account, always less than $5K and usually less than $1K. It's really just for cash and miscellaneous expenses while traveling.

2. I'd like to keep things simple and minimize fees.

 

[HaroldCrump]

1. I don't keep a lot of money in my US-based account, always less than $5K and usually less than $1K. It's really just for cash and miscellaneous expenses while traveling.

2. I'd like to keep things simple and minimize fees.

I used to be in the same situation as you a few years ago.
The USD was a lot stronger back then so this was a real important issue.
These days, not so much.
So we are really talking about approx. $1,000 transfers a couple of times a year?
If so, given your second point about KISS, I would suggest don't sweat it.
USD and CAD are probably going to walk alongside each other for the next little while.
So every time you travel, go to your bank (if not TD then whichever is closest) and get $1,000 USD cash from them.
You'll be getting a slightly unfavorable rate, but then it doesn't matter much.
Dump the TD Borderless account, unless you need to transfer significantly larger amounts or travel much more often.

 

[humble_pie]

the zero-cost strategy would be to maintain a USD investment account with an online that offers free US checquing capability, although the number of free cheques may be limited. USD income from dividends & option sales can be used for US expenses with zero currency exchange costs. Also zero for issuance of a US cheque.

bmo investorline offers this routinely to all clients. I do use this service, although i mostly trade elsewhere. You need the 100k in aggregate bmo household accounts, though, otherwise you'll be stiffed for high commish.

what's little known is that a few other onlines including td waterhouse do also offer this service, but in an extremely limited way. They don't advertise it and they will deny it if asked. Nevertheless the perk exists. If it were myself, i'd try to reach higher level of management. I'd grovel around & mention how much i appreciate breadth & flexibility of their numerous outstanding services etc. How long i've been their loyal & devoted customer etc. Anything else persuasive i could think of. Good luck on this.

 

[brad]

the zero-cost strategy would be to maintain a USD investment account with an online that offers free US checquing capability, although the number of free cheques may be limited.

Here's the problem (well, the main problem): the reason I maintain a US account at a US bank is that I have several times had cheques refused when they were drawn on a Canadian bank, even though they were in US dollars. My Borderless account with TD here in Canada is a chequing account, and I've run into problems three times with people in the States telling me they either couldn't cash my cheque or else their bank was going to charge them a hefty fee ($35 to $50) to cash it.

It's silly, because it's a US dollar account, but some of the smaller banks in the US still won't accept it because it's from a Canadian bank. One of the things I use my US account for is writing deposits for vacation rentals -- my family has a reunion every year in the States and I'm usually the one who organizes it and sends the deposits, and this is often where the troubles happen.

So I really want to maintain a bank account with a US-based bank. My main issue is how to get money from my Canadian accounts into that US bank account without incurring fees or punitively bad exchange rates.

I think Harold's idea makes sense, but I'll wait and see if any other suggestions pop up.

Thanks!

 

[yupislyr]

I have a PCF account in Canada and a Harris Bank (owned by BMO) account for in the States.

I use xetrade to withdraw the CAD out of PCF, change it to USD, then they send it to Harris Bank via EFT. The actual currency exchange is through Custom House so the rates are good. And I choose EFT as the transfer method since they are free, but take a little longer than the alternative but I don't care about speed in the transfers so much. I'm usually transferring well ahead of when I actually need the money.

You could no doubt do the same thing with whatever US bank you currently use.

xetrade and Custom House are both Canadian. Signup and setup with xetrade was quite easy. If I remember correctly, I was ready to go within one afternoon I think.

 

[brad]

I use xetrade to withdraw the CAD out of PCF, change it to USD, then they send it to Harris Bank via EFT.

This sounds promising to me. Does xetrade charge a flat rate per transaction or is it based on the amount? Basically I'm trying to see if I'd end up paying more this way than the $60/year I pay for my TD Borderless account. I currently only transfer money three or four times a year, though I might do it more often if it was more convenient.

 

[humble_pie]

yes, it's understandable that US recipients are going to look suspiciously at a USD cheque drawn on a canadian bank.

you did say, though, that in proposed operation you plan to send a USD checque to your US-based bank account (believe you mentioned this was in VT.) So what i mean is to write this initial checque directly on your canada-based online USD investment account. And i mentioned that bmo investorline routinely issues checquebooks in both CAD and USD to all their clients, so you could use these US checques if you had some. Zero cost except postage stamp. Then from your US bank account in VT you'd distribute user-friendly checques to US payees.

and i mentioned that some other onlines really do have this perk although they won't admit it. TD the home plumber does have this perk. You'd have to grovel quite a bit but imho worth a persistent try. Because. It's free.

PS i do not understand why anybody is paying currency exchange fees if they maintain a USD investment account. The US dollars are already in this account, no exchange necessary, all a person has to do is find the most efficient way to get these $$$ to payees in the US of A.

 

[brad]

So what i mean is to write this initial checque directly on your canada-based online USD investment account.

Okay, I understand now.

So far, I think the xetrade option looks like the cheapest and simplest bet -- I see now that they don't charge any fees but make their money on the spread, and their conversion rates are good.

As far as TD goes, I do have a sizeable RRSP invested with TD (eSeries), but am not sure that would pull any weight in terms of getting them to waive the fee on my Borderless account. But when I call to tell them I'm cancelling the Borderless, you never know, they might give me a deal...it's worth a try.

 

[brad]

FYI, I decided to go with XEtrade; setting up my account and online EFTs was pretty straightforward and my first transaction was completed without a hitch.

One thing I'm curious about, though: XEtrade claims to provide good rates, and based on what I've heard from others I'm prepared to believe them, but what's the best way to verify? Is there a published daily benchmark that I should use as a comparison to the rate offered to me by XEtrade?

Quicken updates my exchange rates daily, and based on its suggested exchange for my transfer I could have gotten a better rate (roughly 0.97 compared to the 0.955 offered by XEtrade).

 

[humble_pie]

brad i'm not sure if this is the answer you're looking for, but the website xe.com presents global wholesale forex rates at about 60-second intervals.

an individual will never obtain these rates. They not only reflect exchanges between the world's biggest money-centre banks, but they are also the mid-point between the bid and the ask.

however i find xe.com is an excellent guideline. An individual's retail rate will usually vary from the wholesale rates by a fixed percentage, so once you determine that percentage you can guesstimate what your approximate retail exchange rate will be by checking xe.com ...

 

[brad]

An individual's retail rate will usually vary from the wholesale rates by a fixed percentage, so once you determine that percentage you can guesstimate what your approximate retail exchange rate will be by checking xe.com ...

Thanks. I guess the most practical approach for me would be to compare the rate I'm quoted by XE with the rate I'd get with my TD Borderless account. Basically I'm just trying to figure out which would cost me more over a year: the Borderless account ($60/year) or XEtrade (no fees for transactions, but possibly a less favorable rate than I get with TD's Borderless account).

I'll do some comparisons over the weeks ahead and see which one comes out ahead. If, for example, I'm losing $20 for each $1,000 transaction by going with XEtrade instead of TD, the TD Borderless account would be less expensive for me if I'm going to exchange more than $3,000/year.

 

[Dr_V]

the Borderless account ($60/year)

As an aside, you can get a Borderless account for "free" with the TD Select Service account. (The "free" is in quotation marks because you must maintain a minimum $5k in the account, so you are, in effect, foregoing whatever interest or investment income you might have otherwise made on it.) Personally, I find that the $5k min balance -- which, in practice, ends up being more like a $6k min balance (since you don't want to go below the $5k) -- is fine, because I get a bunch of other features along with it. (Including a safety deposit box, free TD Gold Elite Visa with auto-club service, etc.)

I would have contributed to this thread earlier but it has been a year or two since I've converted anything to US funds, so I forget exactly what kind of conversion rates I was getting. They were reasonably competitive -- not the best, not the worst -- if I recall.

 

[brad]

Thanks Dr. V, but if you look at my original post you'll see that I enumerated all the reasons why I didn't want to go with Select Service. Otherwise it would be a great idea...if I lived in Ontario I'd almost certainly go that route!

 

[OhGreatGuru]

With on-line banking, it's not clear to me why the distance from your TD branch woudl be an inconvenience. Or do you do no other banking with TD, so you can't just make an on-line transfer from a CDN account to your US dollar account?

Regarding acceptability of your TD cheques in the US you have my sympathy. Banking there is still very parochial in many ways. We may complain about the concentration of power in our "Big 5" (previously Big 7) banks, but they have given Canadians a truly national banking system (and cheque-clearing system) a century ahead of the USA.

 

[brad]

With on-line banking, it's not clear to me why the distance from your TD branch woudl be an inconvenience. Or do you do no other banking with TD, so you can't just make an on-line transfer from a CDN account to your US dollar account.

Right, that's the situation. Because there are relatively few TD ATMs in my city (especially in the part where I live), it doesn't make sense for me to have a chequing or savings account at TD, so I only have the Borderless account. Otherwise I could just do online transfers. As it is now, I have to take an hour and a half out of my day to travel to and from my nearest TD branch to make deposits.

 

[DAvid]

Could you get a US Money Order from your favourite bank, and mail that to the vacation rentals folks? You could do the same to replenish your US bank account. The MO is drawn from a US bank, and is usually available at little additional expense.

I have found this to be effective for such purchases. For incidentals, I just buy cash from my branch before travelling.

 

[brad]

Could you get a US Money Order from your favourite bank, and mail that to the vacation rentals folks?

That's a good suggestion - I've never gotten into the habit of money orders so I never think of it as an option. But since I already have a free (no monthly fee, unlimited cheques and ATMs) US-based chequing account it just seems easier to use it.

I travel to the US relatively frequently, typically 10-15 times per year, both for work and to visit friends/family.

Anyway, at this point now that I've set up XEtrade and it works, I'm going to go that route -- I like the convenience of being able to do my transfers online instead of having to go to a bank. From October through December I was working 90 hours a week, and even getting out to the post office was impossible!

 

[OhGreatGuru]

RBC has a cross-border US account service that sounds a lot like TD's. But I don't think it would solve your problem with local acceptability of cheques. Their US banking arm seems to have branches only in about 5 or 6 south-eastern states from what I can make out on their web site.

 

[pantograph]

Bank of Montreals highest price service plan lets you move USD to any account at any bank in the US. It has to be set up ahead of time and transfers have to be done on the phone, not in a branch, not on the website.

I think the plan fee is $25/month waved if you can keep a 5000 dollar balance. Sort of like TD''s Select Service.

 

[blu3xtc]

I have a PCF account in Canada and a Harris Bank (owned by BMO) account for in the States.

I use xetrade to withdraw the CAD out of PCF, change it to USD, then they send it to Harris Bank via EFT. The actual currency exchange is through Custom House so the rates are good. And I choose EFT as the transfer method since they are free, but take a little longer than the alternative but I don't care about speed in the transfers so much. I'm usually transferring well ahead of when I actually need the money.

You could no doubt do the same thing with whatever US bank you currently use.

xetrade and Custom House are both Canadian. Signup and setup with xetrade was quite easy. If I remember correctly, I was ready to go within one afternoon I think.

I was wondering if any one knew what the address for Harris Bank is if you opened your account online. I'm setting up my XEtrade account so I can easily transfer from my CIBC USD account to my Harris Bank USD account. I don't want to get dinged with NSF fees for providing the wrong info.

Thanks!