U.S. Dollars savings | General comparisons | Discussion forum

Hi,

You can open a US dollar saving account with ING or ICICI banks (these banks I have accounts with). It can be done online and transfer money directly to it if you already have a regular saving acount with them. However, the interest rate is not very high since they both currently pay only 0.75%.

Keeping US Dollars are an absolute must for world travelling.

Just finished traveling for a year. I am amazed how much better the exchange rate given is for US dollars than Canadian dollars. Also the spread between the buy rate and sell rate is always narrower. For example, one Euro may cost 1.50 Canadian and give you 1.40 Canadian but cost only 1.46 US and give you 1.44US. Note in both cases the mid between buy and sell is 1.45 for both Canadian and US dollars.

Often they can easily confuse Canadian tourist by given you the buy and sell rate for Euros using US dollars (1.44, 1.46 in the above example) and then for other currencies they list the inverse, for example the buy and sell rate of Canadian dollars using Euros instead of Euros using Canadian. (0.66., 0.71 in the above example the inverse of 1.40 and 1.50) (Note the spread between .66 and .71 ((5 cents))seems less than between 1.40 and 1.50,((10 cents)) but the percentage difference is of course the same.)

Other exchangers might have the same percentage spread but as mentioned in my First point, they have a much worse cost rate for Canadians buying the foreign currency. This was always deceiving when Canada and US dollars were not at par as it looked like they were given fair rates to both currency because spreads were about the same and it was difficult to determine what was the real cost of the foreign currency as the exchange rates are often written for the reverse. But it now is clearly seen while the Canadian and US dollars are at par. For example, exchange dealers might not really want Canadian so they will have a much worse buy rate of Canadian dollars, like 1.50 to buy Euro and 1.46 to sell Euro while the US is closer to the real market rate of 1.46 to buy and 1.44 to sell. (If the real rate was at 1.45 they would loose money if a Canadian was at a tourist attraction trying to buy Canadian dollars, a strange event.) The exchanger knows no CANADIANtourist arrives in Europe to SELL Euros, and if one does, they simply refuse to make the transaction claiming they don't carry any Canadian dollars. Even for the US rate, expect the buy Euros is the market mid rate or WORSE that they know no tourist will be using and thus the sell rate at 1.46 may be way above the mid rate or your credit card rate)

Bottom line, I have found that all over the world you will always get better rates for US dollars than Canadian so travel with US dollars OR prebuy the currency of the country you are visiting and when possible use your Credit cards that will have rates just a couple of percentages off the spot (real) rate between buy and sell. (Buy the way, don't worry about credit card mid rates being much off the spot or actual real trading rate, unlike the exchangers which mid rate is often no where near the real rate used in the markets between banks and large institutional traders.)