Since we moved to Canada twelve years ago, we have maintained a financial presence in both the U.S. and Canada. Some things don’t follow you (we had zero credit history when we moved here, and had to start again by using a credit card that we had already pre-paid), while other things do (U.S. taxes follow you everywhere!). And keeping things separate isn’t all that difficult, but moving money back and forth can be tricky.
Enter our home project, at which point we put all of our chips on the table (Goodbye, Roth IRAs! Goodbye, US Savings!) to make our long-term home. And to do so, we needed to convert some money from USD to CAD.
Our first step was to open a USD account with our local bank (the Bank of Montréal). That took way longer than it should have (banks are much more regulated in Canada than in the US, which in theory is good, but means that things can take time!), but now that it is in place, things worked well. We knew that asking our bank would be the highest cost option, but it works if you are in a pinch.
Then we tried the services of Knightsbridge FX. Definitely less expensive than our bank (about 1% rather than 2%), but when you are transferring large sums, I don’t want to give up even the one percent if I don’t have to.
Finally, I tried Norbert’s Gambit. I followed exactly the steps listed in that Money Sense article that I just linked to. The basic concept is that you buy an ETF in the currency you have, ask your brokerage account to “journal it over” into the currency you want, and then sell the ETF to get cash in the currency you want. The entire process takes about a week. It was super simple, and other than the $10 and change that I paid my discount brokerage, Questrade*, there were no further charges. Plus, it has a fantastically geeky name, which I love.
How do you move money around without paying big fees?
* Questrade: If you sign up for a new account, feel free to use my QPass key: 316522124408373. You get a bonus based on the initial amount that you place in your account ($25 – $250), and I get a flat $25 bonus. I only recommend products and services that I use and appreciate, and for low-cost trading, I think Questrade is the best.