Personal Finance

Foreign Currency Exchange

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  • Dec 29th, 2009 12:19 pm
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Oct 6, 2009
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Foreign Currency Exchange

I'm looking to obtain $5000 US from converting Canadian funds over.


I currently bank with TD and the price seems a little high. Does anyone know a better place for currency exhanges?
14 replies
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Sep 28, 2007
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turbotime wrote:
Dec 28th, 2009 6:42 pm
I'm looking to obtain $5000 US from converting Canadian funds over.


I currently bank with TD and the price seems a little high. Does anyone know a better place for currency exhanges?
What's your time frame? Do you have to do it pretty soon?
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Aug 18, 2005
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Come to Guelph and use Global Currency Services. Their rates are better than any of the big banks.

Considering the size of the transaction, you may come out ahead after the cost of gas.
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Jucius Maximus wrote:
Dec 28th, 2009 9:28 pm
Come to Guelph and use Global Currency Services. Their rates are better than any of the big banks.

Considering the size of the transaction, you may come out ahead after the cost of gas.
That rate is actually slightly worse than buying USD on TD Easyweb with a Borderless Plan account, but the rate to sell USD to them is better than TD.
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tng11 wrote:
Dec 28th, 2009 9:59 pm
That rate is actually slightly worse than buying USD on TD Easyweb with a Borderless Plan account, but the rate to sell USD to them is better than TD.
True, but the Borderless plan requires either a monthly fee or a minimum balance.
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OMEGA Travel Services

198 Spadina Ave.
Toronto, ON
M5T 2C2

(416) 593 - 1918

I went here about 1 1/2 years ago, good rate if you exchange large amounts, i am not sure it's still open.
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Apr 29, 2002
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You didn't mention the time frame, so hands down the best is to use IB FOREXPRO.

Deposit cash into IB, kick it out to your TD USD account, and then withdraw at the branch.

It's around $4 for up to $25K USD flat at market rates, a fee of about 0.016%.

However, if the money isn't from the same account, the funds will need to be in at least 90 days, IB requires $25K in account balances, etc. But it is the best for FX exchanges.
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Sep 22, 2009
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Canadia
Yeah Interactive Brokers is unbeatable for FX. A typical CADUSD spread is like 1.04385/1.04390, which is pretty darn close to what you'll actually see on an FX desk at Goldman/Morgan/Merrill etc when they move millions at a time. The fee is 2.50 USD regardless of your size I believe. Meanwhile Canadian banks are charging 7, 8, even 10+ cents wide on a simple currency pair (so 1.0000/1.0950). And amazingly some people don't seem to mind getting their eyes ripped out by these banks.

If your size is 5000, then getting the tightest available spread would probably save you around 5 cents on the dollar (depending on your alternative), so like 250 bucks. This is assuming you don't incur other costs when getting/funding an IB account.
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nauru wrote:
Dec 29th, 2009 1:12 am
Yeah Interactive Brokers is unbeatable for FX. A typical CADUSD spread is like 1.04385/1.04390, which is pretty darn close to what you'll actually see on an FX desk at Goldman/Morgan/Merrill etc when they move millions at a time. The fee is 2.50 USD regardless of your size I believe. Meanwhile Canadian banks are charging 7, 8, even 10+ cents wide on a simple currency pair (so 1.0000/1.0950). And amazingly some people don't seem to mind getting their eyes ripped out by these banks.

If your size is 5000, then getting the tightest available spread would probably save you around 5 cents on the dollar (depending on your alternative), so like 250 bucks. This is assuming you don't incur other costs when getting/funding an IB account.
The biggest problem with IB are the wait times. Even if you use a wire transfer there may be a delay of one or two days before they receive the funds, and wire transferring out may also take one or two days more (not to mention 2 wire transfers result in a lot of fees!).

If the amounts are large, I clear them through IB but small amounts I do through HSBC which has a 0.5 cent spread on CAD/USD at 1.03646/1.04174 for electronic transfers between my Canadian and US accounts.
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Oct 22, 2007
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Ok, I'm a bit confused, I'm a TD client and last time I converted $1000.00 Canadian to US. funds (6 months ago) I went to a branch and they charged me around 2.2% is that not the standard rate?
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Maymybonneliveforever wrote:
Dec 29th, 2009 8:28 am
Ok, I'm a bit confused, I'm a TD client and last time I converted $1000.00 Canadian to US. funds (6 months ago) I went to a branch and they charged me around 2.2% is that not the standard rate?
2.2% is a standard ripoff rate that you can expect from the main 5 members of the banking cartel in Canada. It's nowhere close to market rate though.
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tng11 wrote:
Dec 29th, 2009 7:46 am
The biggest problem with IB are the wait times. Even if you use a wire transfer there may be a delay of one or two days before they receive the funds, and wire transferring out may also take one or two days more (not to mention 2 wire transfers result in a lot of fees!).

If the amounts are large, I clear them through IB but small amounts I do through HSBC which has a 0.5 cent spread on CAD/USD at 1.03646/1.04174 for electronic transfers between my Canadian and US accounts.
Actual quotes from HSBC:

http://www2.hsbc.ca/HICServlet?cmd_view ... Calculator

All these quotes are ripoffs. If you are personally getting something a bit better then that's nice for you, but HSBC is charging everybody else 4 cents wide on USDCAD, 6 cents wide for GBPUSD, and even worse for other pairs. Not acceptable.

With IB I've never had any delay; my wires from Europe are credited to my account the same day, and since I've already got money in there I can withdraw right away if I want to. Maybe the banks in some countries are faster and more competent than others. The Netherlands, for example, has a pretty incompetent banking system. Always slow and always messy in my experience. But if speed is the primary concern then maybe better to go to Travelex and get ripped off. And get checks cashed at MoneyMart and get ripped off there as well (but at least you get some money right away).
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nauru wrote:
Dec 29th, 2009 11:30 am
On HSBC:

http://www2.hsbc.ca/HICServlet?cmd_view ... Calculator

All these quotes are ripoffs. If you are personally getting something a bit better then that's nice for you, but HSBC is charging everybody else 4 cents wide on USDCAD, 6 cents wide for GBPUSD, and even worse for other pairs. Not acceptable.
I have a Premier account which does have a $100K+ requirement but they do hose other consumers pretty badly.
With IB I've never had any delay; my wires from Europe are credited to my account the same day, and since I've already got money in there I can withdraw right away if I want to. Maybe the banks in some countries are faster and more competent than others. The Netherlands, for example, has a pretty incompetent banking system. Always slow and always messy in my experience. But if speed is the primary concern then maybe better to go to Travelex and get ripped off. And get checks cashed at MoneyMart and get ripped off there as well (but at least you get some money right away).
No one said you need to go to Travelex/Money Mart. There are plenty of places in Toronto where you can get a 2 cent spread on USD, EUR, GBP (I'm thinking Guardian, calforex, Omega, Goldium etc. etc. etc.) and that going through the hassle of opening an account, moving money back and forth may not be worth it in the end if it's a one or two time thing. (CAD and USD are easier because you can open accounts with any Canadian bank, but very few banks offer accounts in other currencies)

If you are receiving the money same day you are using wire transfers, right? If I were to wire money from my CAD account to IB that would cost me $30 or so, and then to wire from IB to my EU bank account that would cost 8 Euros (which is an excellent rate). If one were to convert 1,000 Euros then it most certainly would not be worth it, and they would also be required to have a EUR bank account to withdraw the funds (which many people don't have).

For your typical traveller IB is definitely not worth it IMO. However if you have interests in multiple countries, trade currencies frequently, and in large amounts all the time then it most certainly is worth it.
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Oct 31, 2006
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tng11 wrote:
Dec 29th, 2009 7:46 am
The biggest problem with IB are the wait times. Even if you use a wire transfer there may be a delay of one or two days before they receive the funds, and wire transferring out may also take one or two days more (not to mention 2 wire transfers result in a lot of fees!).

If the amounts are large, I clear them through IB but small amounts I do through HSBC which has a 0.5 cent spread on CAD/USD at 1.03646/1.04174 for electronic transfers between my Canadian and US accounts.
If you also use your IB account for trading and have a significant amount of money in there, then the wait times are irrelevant and you can simply use EFT to transfer the funds at no additional cost.
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