Q: Re: Bank exchange fees when investing in U.S. securities, funds, ETF’s.
It is good to see 5I is involved in Financial Literacy Month. I think a valid contribution to your Members could be as follows:
I believe there is a (hopefully small) percentage of Canadian investors of U.S. traded securities that are purchasing and selling within their Cdn. dollar investment account. (As you know, even at par, buying a US security in a Cdn account will cost approx. 2% in bank exchange fees, and selling that security will cost another 2%).
I also believe that these self-directed investors are unaware that most banks will set up a USD investment account, registered or unregistered, for them at no charge allowing any trading and dividends to transact within that account avoiding the bank exchange fee on each transaction. Of course there will be that fee on the initial transfer of funds into that account, (but not if U.S. securities are transferred from the Cdn to the U.S. account).
I recall that Questrade was once advertising on BNN that they had an account to avoid these fees, but it really wasn’t an effective message.
Are you aware of any good method to purchase U.S. dollars at better rates than banks will offer?
Thank you!
It is good to see 5I is involved in Financial Literacy Month. I think a valid contribution to your Members could be as follows:
I believe there is a (hopefully small) percentage of Canadian investors of U.S. traded securities that are purchasing and selling within their Cdn. dollar investment account. (As you know, even at par, buying a US security in a Cdn account will cost approx. 2% in bank exchange fees, and selling that security will cost another 2%).
I also believe that these self-directed investors are unaware that most banks will set up a USD investment account, registered or unregistered, for them at no charge allowing any trading and dividends to transact within that account avoiding the bank exchange fee on each transaction. Of course there will be that fee on the initial transfer of funds into that account, (but not if U.S. securities are transferred from the Cdn to the U.S. account).
I recall that Questrade was once advertising on BNN that they had an account to avoid these fees, but it really wasn’t an effective message.
Are you aware of any good method to purchase U.S. dollars at better rates than banks will offer?
Thank you!
