[dnames]

Hi there, wanted to get some advice from people currently holding USD.

my situation:

• 120K USD cash sitting in a regular USD checking account (only earning around $15/m currently)
• would rather not convert to CAD given the current rate
• Plan to use half for mid term (~5 years, down payment for house), no matter what the usd->cad exchange rate is at that time
• Plan to use the other half for long term investments with higher risk (stocks, mutual funds, etc)
• Plan to convert to CAD when the rate is good

What sort of investment options/products do I have if I want to keep it in USD ?
The main reason I am doing this is to prevent the weak USD exchange rate hit. (I know this has its risk on its own)

I recently got an email from hubert financial about their new USD savings account offering 0.75%;
its better than the rate I am getting from the big 5, so I plan to put some cash there, for liquidity.

but still, I think there are better places to keep my USD to earn a higher return for mid to long term investments.

any input is appreciated, thanks !

 

[leoc2]

How about US ETF BSV Short term bond fund
https://personal.vanguard.com/us/funds/snapshot?FundId=0924&FundIntExt=INT#hist=tab:0

Beware of the possible bond bubble.
http://www.bogleheads.org/forum/viewtopic.php?t=85764

 

[CanadianCapitalist]

I would be wary of savings accounts because USD accounts are not covered by CDIC insurance. If you want absolute safety, why invest in products that do not offer deposit insurance.

The question is a bit vague but there are a number of investments that allow you to keep currency in USD. US-listed ETFs, USD money market mutual funds etc. come to mind.

 

[humble_pie]

imho there are not really a whole lot of ace suggestions that can be made.

USD money market funds are yielding less than the OP can get from plain USD savings accounts.

US equity or bond etfs expose the OP to risk of capital loss since he has a relatively short 5-year time frame.

the OP clearly has a bullish view of the US dollar.

a slightly trickier strategy to satisfy his inner US dollar bull would be to convert to CAD now while buying & maintaining a long position in USD/CAD options or futures.

the 2nd part of his grand design puzzles me. He plans to "use the other half" of the deposit for long term investments, apparently in canada. Yet he will convert his USD to CAD for this purpose only "when the rate is good," ie some time in the future but not now.

it's unlikely that opportune moments in canadian equity markets will occur exactly when the currency exchange will be "good." The chances are that just when one side of the proposed move will be looking good, the other side will be looking bad.

 

[mrPPincer]

The Manitoba credit unions don't have CDIC insurance, but personally I'm comfortable with the guarantee they do have (on the full balance btw, not just 100K)

Hubert's new US HISA:
* Interest rate: 0.75%
* Interest calculated daily, paid monthly
* 100% guaranteed by the Deposit Guarantee Corporation of Manitoba
* No minimum balance required
* No monthly service fee

I've been using their CDN HISA (2%) and have been quite happy with them but I've noticed on Canadian Money Forum that there are more people still leery of anything that doesn't have the rock solid CDIC backing.