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Email this4:52 am
August 26, 2024
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We have a USA home to that we sold and it closes in mid September. The proceeds (~285k USD) will be wired to our TD USD account. We can/will transfer out to our other USD accounts for better interest (EQ, tangerine, or potentially Simplii). We do want to take advantage of the current low CDN and convert most of the proceeds to Canadian dollars (except the amount we'll have to pay IRS for capital gains).
What would be the recommended path for converting such a large amount USD to CDN in order to achieve a favourable exchange rate?
7:14 am
December 22, 2022
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I've used Knightsbridge foreign exchange. You'll likely pay around 0.5% or less foreign exchange fee which is much less than the big banks. The site is here, https://www.knightsbridgefx.com/
I've also used Norbert’s Gambit using my brokerage account. You pay only the brokerage trade commission of about $10 and no foreign exchange fee. This is the best but you'll need to learn how to do it. There's an easy to follow tutorial by a Canadian Doctor that shows you step by step here,
https://www.looniedoctor.ca/2019/06/14/norberts-gambit-qtrade/
7:51 am
November 3, 2022
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I keep an EQ USD account, which is linked to my TD USD account. I've found that EQ's Fx rates are better than the big banks, and have moved $ through EQ to take advantage of their better rates. One the amount is converted, you can keep it at EQ or transfer elsewhere.
7:59 am
October 27, 2013
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There is a thread here somewhere on Norbert's Gambit, but to summarize it here, Norbert's Gambit, made popular by Norbert Schlenker https://www.libra-investments.com/pr02.htm and who posts on FWF https://www.financialwisdomforum.org/forum/memberlist.php?mode=viewprofile&u=7 can be done at any brokerage that has USD and CAD sides to brokerage accounts.
It is not hard to do but you would need to do it in the opposite direction that looniedoctor is talking about in that link (the illustrated method shows conversion of CAD to USD).
To convert USD to CAD, it is essentially the inverse. Using DLR/DLR.U, one would buy DLR.U units using USD on the USD side of the account, journal DLR.U over to the CAD side of the account and then sell DLR units to get CAD. DLR/DLR.U units have the same CUSIP number so DLR.U on the USD side automatically becomes DLR on the CAD side of the account.
The same can be done with a Canadian inter-listed stock like CM. Buy it on the New York stock exchange in USD on the USD side of the account, journal it over to the CAD side of the account and then sell CM on Toronto stock exchange to get CAD.
The cost to do this is the price of 2 commissions plus the bid/ask spread between the buy and sell of the security... generally 1-2 cents.
Some discount brokerages allow the account holder to transfer (journal) holdings from one side of the account to the other online directly, or via an online form, while others require a phone call to an agent to make the transfer (journal).
1:17 pm
August 26, 2024
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Ok, I can do the EQ thing pretty easily because have an EQ USD already and it's already linked to our TD USD account. Im going to readup on the Norbert's method and probably go that way. Thanks all very appreciated!
1:32 pm
October 27, 2013
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If you post which brokerage, you might get a response on specifics for NG at that brokerage.
9:20 am
December 22, 2022
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MexMoki said
Ok, I can do the EQ thing pretty easily because have an EQ USD already and it's already linked to our TD USD account. Im going to readup on the Norbert's method and probably go that way. Thanks all very appreciated!
Given the large amount you'll be exchanging, to keep it simple you may want to consider going with an exchange house such as Knightsbridge since you'll only be paying around 0.2 % in foreign exchange fees which is the same you'll be paying for the bid-ask spread using Norbert's Gambit. Norbert's would be the way to go for smaller sums to be exchanged.
10:58 am
April 27, 2017
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The Rock said
Given the large amount you'll be exchanging, to keep it simple you may want to consider going with an exchange house such as Knightsbridge since you'll only be paying around 0.2 % in foreign exchange fees which is the same you'll be paying for the bid-ask spread using Norbert's Gambit. Norbert's would be the way to go for smaller sums to be exchanged.
Depending on brokerage, NG likely to cost around 0.1%.
2:49 pm
April 13, 2017
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I am at the opposite situation (need to convert a large amount from cad to us). Is there any safe way to skip any bank service and do it between two of us?
1:25 am
August 26, 2024
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The Rock said
Given the large amount you'll be exchanging, to keep it simple you may want to consider going with an exchange house such as Knightsbridge since you'll only be paying around 0.2 %.....
That's reasonable compared to EQ where I calculate we would end up losing $3343 cdn exchanging as of today.
So on 285k USD we would paying Knightsbridge a fee of ~$767 cdn, Correct?
7:51 am
December 22, 2022
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MexMoki said
That's reasonable compared to EQ where I calculate we would end up losing $3343 cdn exchanging as of today.
So on 285k USD we would paying Knightsbridge a fee of ~$767 cdn, Correct?
Yes. You can call Knightsbridge and ask for the exact exchange fee rate. It should be at most 0.2% maybe even less for $285k. If you place your order in the morning, the money will be in your account the same day.
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