IB for currency exchange?

[jefguth]

I've opened an IB margin account for my personal portfolio, but have also considered using it as an alternative to XEtrade for exchanging and transferring funds from BMO to my US bank to pay for my tuition here.

Their website says that for Canadian EFT deposits, a 60day hold applies for funds withdrawn to a non-originating bank. Does anyone know if that applies to withdraws either by cheque, wire, or American ACH?

Using IB or this purpose could save me a fair amount, even though my commission with XEtrade is 1%, but if their is a 60 day hold there's a major PITA factor...

[AllWheelDrift]

I'm pretty sure the hold applies no matter how you withdraw. I think the way to avoid the long hold would be to transfer the funds to IB via wire rather than EFT.

[jefguth]

Thanks, that's what I've been told by IB support. Well, at least they'll pay interest during those 60 days if I don't feel like paying for a wire. >:(

[bcbgboy13]

Well, one way to avoid this 60 days holding period is if you do some trading and have some extra cash sitting in your account at any time. You can deposit with EFT some fresh CA$ from your BMO account, convert an equivalent amount (or less) of the existing CA$ there (or simply use the existing US$ in your IB account) and withdraw them as you like to pay your tuition.
Now you cannot withdraw these newly deposited CA$ for 60 days but you can trade with them.
And do not count that much on their interest for these 60 days hold as they - quote - "Whereas many brokers pay little or no interest on idle balances in their securities and/or commodities accounts, Interactive Brokers pays market competitive rates on all balances".
This market competitive rate is 0% across the board for the first 10k US$ and the equivalent amount in any currency that you may hold - or for example if you hold US$10k and CA$10k you wont get any interest at all (but still required to pay their fees every month). You will need to implement a strategy to get these money to work for you.

BTW this 60 days hold was only 30 days less than a year ago and I believe even less before.