Moving Money from CANADA to USA

[CdnRN 40]

HI Folks,

 

I've been in the USA for a number of years now (green card) and I'm trying to figure out the most cost effective (IE the least bad hit on exchange rates and fewest fees) way to electronically transfer funds from Canada to the USA.  

 

What have other people done?

 

Thanks!

 

 

 

[payxibka 10,045]

3 minutes ago, CdnRN said:

HI Folks,

 

I've been in the USA for a number of years now (green card) and I'm trying to figure out the most cost effective (IE the least bad hit on exchange rates and fewest fees) way to electronically transfer funds from Canada to the USA.  

 

What have other people done?

 

Thanks!

 

 

 

How much money are you talking about?

[Alabamak1 688]

transfers best with Transferwise

[shumway1756 304]

All depends on how much money we're talking about. Really large sums can often do better if you transfer straight from your financial institution (depending on their rates, of course). For smaller to moderate amounts, I highly recommend Transferwise. They have the best rates that I've found as of yet.

[CdnRN 40]

has anyone used any other services than transfer wise? In comparing fees/prices it's not necessarily the cheapest, though some prices are 'in the moment' as the markets were open when I looked at quote comparisons.

 

Also are there any IRS triggers I should be wary of? 

[Danni.B 37]

I use RBC and RBC Bank (which is a financial institution in the US designed for Canadian snowbirds). It's by far THE easiest way to transfer money in my opinion. It's considered transfer within your own accounts without paying any wire transfer fee. And it is instant transfers online. 

 

I worked at RBC for a number of years before moving here. So I have all my accounts with them.

[Jenn&Matt 3]

Hello, 

Just reviving this old thread and seeing who out there may offer some advice.

I am looking into how to move my money to US (I am in the last steps of my Green Card process and hope to move in April 2020). I'll have to move all my TFSA out and hope to move a large sum in preparation for purchasing a condo. Any advice on how best to do this? I had looked into Tangerine, which is partnered with Bank of America in the US, but I don't think they can do transfers. 

 

And would certain amounts trigger any sort of red flags from the IRS?

 

Thank you!

[ADW & JOP 146]

31 minutes ago, Jenn&Matt said:

Hello, 

Just reviving this old thread and seeing who out there may offer some advice.

I am looking into how to move my money to US (I am in the last steps of my Green Card process and hope to move in April 2020). I'll have to move all my TFSA out and hope to move a large sum in preparation for purchasing a condo. Any advice on how best to do this? I had looked into Tangerine, which is partnered with Bank of America in the US, but I don't think they can do transfers. 

 

And would certain amounts trigger any sort of red flags from the IRS?

 

Thank you!

First, is your money in USD or CAD?

 

Over the past few months, I have gradually converted CAD to USD.

 

I have a TD Canada US dollar account and a TD America Checking account. Depending on how much money you keep in the TD Canada USD account (minimum 1500) you get to wire up to $100,000 USD daily from TD Canada to TD America without incurring transaction or wiring fees.

Edited March 2, 2020 by ADW & JOP

[Jenn&Matt 3]

1 hour ago, ADW & JOP said:

First, is your money in USD or CAD?

 

Over the past few months, I have gradually converted CAD to USD.

 

I have a TD Canada US dollar account and a TD America Checking account. Depending on how much money you keep in the TD Canada USD account (minimum 1500) you get to wire up to $100,000 USD daily from TD Canada to TD America without incurring transaction or wiring fees.

My money would be in CAD and covering to USD (have to re-build all my finances in USD, sadly!)

 

Thanks for suggesting TD! There are actually lots of TDs by where I'll be living so that could be good. Did you find you ended up with decent currency conversion rates with TD? And are there any tax concerns when you exchange large amounts of money?  I am not looking forward converting with the poor Canadian Dollar 😩

 

ALSO, did you have any concern with having a larger amount of money in your Canadian Bank Accounts? I think I'll will have to move everything out of my TFSA to avoid taxes from the IRS. 

[ADW & JOP 146]

33 minutes ago, Jenn&Matt said:

My money would be in CAD and covering to USD (have to re-build all my finances in USD, sadly!)

 

Thanks for suggesting TD! There are actually lots of TDs by where I'll be living so that could be good. Did you find you ended up with decent currency conversion rates with TD? And are there any tax concerns when you exchange large amounts of money?  I am not looking forward converting with the poor Canadian Dollar 😩

 

ALSO, did you have any concern with having a larger amount of money in your Canadian Bank Accounts? I think I'll will have to move everything out of my TFSA to avoid taxes from the IRS. 

So I didn't use TD to convert as converting with a major bank can be pretty expensive. If you look at FXstreet for example, if you had $10000 CAD, the conversion in USD should be $7494. On TD's website, you get $7319. Of course, you may also get a better deal if you have a cross-border relationship with TD.

 

Depending on how much money you are planning to convert, there are different cost cutting methods you can consider.

 

Personally, I used a method called Norbert's Gambit with Questrade (https://www.moneysense.ca/magazine-archive/norberts-gambit-a-better-way-to-buy-u-s-dollars/). Using the same example now, based on the current numbers, you get closer to $7488 minus $60-70 in commission. Hypothetically, if you exchange say $100,000, the commission will be similar so the more you exchange, the better the conversion rate. The issue with this method is that it takes time to get used to it (I studied it for months before I started), you have to be aware of CRA superficial loss rules (in the case you are planning to make multiple exchanges), there is a delay and you will need to pay capital gain tax (particularly relevant in today's climate with the impact by the coronavirus) and Questrade (low fee brokerage) is not available to non-residents of Canada.

 

For a simpler method, you may consider something like TransferWise. From the above example, you will get $7438. What I would do in this case is to open a TD account, send it to TransferWise to convert, then send it back to a TD USD account, before wiring it to TD America. Personally, I have never used TransferWise before but from what I hear, they provide a decent service.

 

If you are planning to exchange a significant amount, and I would imagine you are if you are considering purchasing a condo, I would call and see what the exchange rate at TD, or any other major bank you plan to do business with, but also consider third-party options as well to see how you can get the best rate.

 

Just to provide you with my own personal experience. I have been with TD Canada for over 20 years. I created a USD account about 2 years ago and a TD America checking account about 1 year ago. Each of my accounts have enough money to meet the minimum balance to avoid any fees.

 

I then take money from my TD Canada account to Questrade to convert to USD and then have it transferred to my TD Canada USD account, then wire it to my TD America checking account. I find that this way, I drastically reduce my commission and wiring fees and saved approximately $3000-5000 in exchange fees.

 

By the way, the foreign exchange has been pretty bad for the CAD these days. When I made a big conversion in early January, I was getting 1 CAD for 0.77 USD. Unfortunately, the coronavirus has really impacted the CAD due to oil prices and impact on the global market. Last week, considering the current climate, I exchanged more at 1 CAD for .756 USD. Today, you are looking at 1 CAD to 0.7494 USD.

 

With the uncertainty of the coronavirus, global markets and the pipeline strikes, I project the CAD will continue to drop in the short-term but it's always hard to predict.

Edited March 2, 2020 by ADW & JOP

[Jenn&Matt 3]

1 hour ago, ADW & JOP said:

So I didn't use TD to convert as converting with a major bank can be pretty expensive. If you look at FXstreet for example, if you had $10000 CAD, the conversion in USD should be $7494. On TD's website, you get $7319. Of course, you may also get a better deal if you have a cross-border relationship with TD.

 

Depending on how much money you are planning to convert, there are different cost cutting methods you can consider.

 

Personally, I used a method called Norbert's Gambit with Questrade (https://www.moneysense.ca/magazine-archive/norberts-gambit-a-better-way-to-buy-u-s-dollars/). Using the same example now, based on the current numbers, you get closer to $7488 minus $60-70 in commission. Hypothetically, if you exchange say $100,000, the commission will be similar so the more you exchange, the better the conversion rate. The issue with this method is that it takes time to get used to it (I studied it for months before I started), you have to be aware of CRA superficial loss rules (in the case you are planning to make multiple exchanges), there is a delay and you will need to pay capital gain tax (particularly relevant in today's climate with the impact by the coronavirus) and Questrade (low fee brokerage) is not available to non-residents of Canada.

 

For a simpler method, you may consider something like TransferWise. From the above example, you will get $7438. What I would do in this case is to open a TD account, send it to TransferWise to convert, then send it back to a TD USD account, before wiring it to TD America. Personally, I have never used TransferWise before but from what I hear, they provide a decent service.

 

If you are planning to exchange a significant amount, and I would imagine you are if you are considering purchasing a condo, I would call and see what the exchange rate at TD, or any other major bank you plan to do business with, but also consider third-party options as well to see how you can get the best rate.

 

Just to provide you with my own personal experience. I have been with TD Canada for over 20 years. I created a USD account about 2 years ago and a TD America checking account about 1 year ago. Each of my accounts have enough money to meet the minimum balance to avoid any fees.

 

I then take money from my TD Canada account to Questrade to convert to USD and then have it transferred to my TD Canada USD account, then wire it to my TD America checking account. I find that this way, I drastically reduce my commission and wiring fees and saved approximately $3000-5000 in exchange fees.

 

By the way, the foreign exchange has been pretty bad for the CAD these days. When I made a big conversion in early January, I was getting 1 CAD for 0.77 USD. Unfortunately, the coronavirus has really impacted the CAD due to oil prices and impact on the global market. Last week, considering the current climate, I exchanged more at 1 CAD for .756 USD. Today, you are looking at 1 CAD to 0.7494 USD.

 

With the uncertainty of the coronavirus, global markets and the pipeline strikes, I project the CAD will continue to drop in the short-term but it's always hard to predict.

Thank you so much @ADW & JOP! You are such a wealth of knowledge.

 

Thanks for providing details of what you do - I can't believe you could $3-5K in just exchange fees alone by doing what you do. I currently don't use TD (I've been with BMO my whole life! Which, sadly, isn't very present in North-Eastern US) but I am thinking TD may be worth converting to for the ease of banking when I move.

 

Agreed with the CAD. I just keep my money parked in my Canadian bank accounts until things look a bit brighter. We'd be loosing out on soooo much with these extremely low exchange rates 😣

[ADW & JOP 146]

12 minutes ago, Jenn&Matt said:

Thank you so much @ADW & JOP! You are such a wealth of knowledge.

 

Thanks for providing details of what you do - I can't believe you could $3-5K in just exchange fees alone by doing what you do. I currently don't use TD (I've been with BMO my whole life! Which, sadly, isn't very present in North-Eastern US) but I am thinking TD may be worth converting to for the ease of banking when I move.

 

Agreed with the CAD. I just keep my money parked in my Canadian bank accounts until things look a bit brighter. We'd be loosing out on soooo much with these extremely low exchange rates 😣

The problem with foreign currency exchange is that it is not an exact science. It relies so much on investor sentiments. The Canadian currency is tied to its economic growth, which in turns relies so much on exporting oil (and oil prices) and the outlook of the global market. 

 

To be honest, in the short-term I expect the CAD to generally decline, especially if the fears of coronavirus in the US escalate. I imagine there will be many more cases coronavirus diagnosed once testing becomes more readily available in the next couple of weeks. In turn, I suspect this will continue to hurt global markets and oil prices, and in turn, the CAD.

 

In general, because foreign currency rates are so difficult to anticipate (and I have been following it closely for the past year), people generally advise to exchange money over a period of time as opposed to all at once. For example, I made my first major exchange in November. At the time, I anticipated that oil prices would continue to rise and held on to the rest of my money until around December when the dollar went up to 77 cents. I made another exchange but held onto some more money because I was anticipating it to go up more. There was no way I would have anticipated the issue with coronavirus and its impact globally. Alas, the CAD has not moved the way I expected, but at the very minimum, my foreign currency exchange is averaged between three major transfers (at 76.2). Had I held onto my money until today, I would be exchanging at 74.8.

 

The issue with me is that we are house hunting in San Diego and I need to come up with the cash for the downpayment, so my foreign currency exchange strategy relies so much on how I anticipate the short-term USD/CAD exchange. 

Edited March 2, 2020 by ADW & JOP

[Jenn&Matt 3]

4 minutes ago, ADW & JOP said:

The problem with foreign currency exchange is that it is not an exact science. It relies so much on investor sentiments. The Canadian currency is tied to its economic growth, which in turns relies so much on exporting oil (and oil prices) and the outlook of the global market. 

 

To be honest, in the short-term I expect the CAD to generally decline, especially if the fears of coronavirus in the US escalate. I imagine there will be many more cases coronavirus diagnosed once testing becomes more readily available in the next couple of weeks. In turn, I suspect this will continue to hurt global markets and oil prices, and in turn, the CAD.

 

In general, because foreign currency rates are so difficult to anticipate (and I have been following it closely for the past year), people generally advise to exchange money over a period of time as opposed to all at once. For example, I made my first major exchange in November. At the time, I anticipated that oil prices would continue to rise and held on to the rest of my money until around December when the dollar went up to 77 cents. I made another exchange but held onto some more money because I was anticipating it to go up more. There was no way I would have anticipated the issue with coronavirus and its impact globally. Alas, the CAD has not moved the way I expected, but at the very minimum, my foreign currency exchange is averaged between three major transfers (at 76.2). Had I held onto my money until today, I would be exchanging at 74.8.

 

The issue with me is that we are house hunting in San Diego and I need to come up with the cash for the downpayment, so my foreign currency exchange strategy relies so much on how I anticipate the short-term USD/CAD exchange. 

Very true about the CAD. Thanks for your insight @ADW & JOP - really helps me grasp the ever-changing tide of our situation!

 

We'll be house hunting in Boston (similar, expensive market as SD I am assuming), so I was hoping to have some funds in the US to seriously consider any prospective homes. Good luck with the rest of your currency exchanges!

[Jenn&Matt 3]

Hi again! 

Just wondering your thoughts on whether there is any concern of having a large sum of money sitting in a Canadian banking institution after I move to the U.S.? I would like, like you @ADW & JOP, to exchange small amounts of currency at a time, which means I will have moved everything out of my TFSA and it will be sitting in my Savings account.

Do you think that would raise any flags? Or would there by any flags raised I bring money into my U.S. account (ie. concerns for these amounts being taxed??)

 

Sorry I have so many questions about this!

 

And @ADW & JOP, noticed your interview is coming up. GOOD LUCK!! 😃

[Lil bear 4,219]

17 minutes ago, Jenn&Matt said:

Hi again! 

Just wondering your thoughts on whether there is any concern of having a large sum of money sitting in a Canadian banking institution after I move to the U.S.? I would like, like you @ADW & JOP, to exchange small amounts of currency at a time, which means I will have moved everything out of my TFSA and it will be sitting in my Savings account.

Do you think that would raise any flags? Or would there by any flags raised I bring money into my U.S. account (ie. concerns for these amounts being taxed??)

 

Sorry I have so many questions about this!

 

And @ADW & JOP, noticed your interview is coming up. GOOD LUCK!! 😃

No red flags. Just make sure it is correctly reported as required on your tax return and by FBAR every year that it remains over $10000USD at any time during the previous year   Foreign  asset holding is common place now and there are security agreements in place to ensure the source of holdings is traceable.