Personal Finance

Moving to the US for work, suggestions on CAD funds?

  • Last Updated:
  • Jan 7th, 2019 5:57 pm
Deal Addict
Dec 16, 2005
4554 posts
2273 upvotes
are there any US banks that have CAD accounts? Like BMO Harris or TD?
Maybe that way you can exchange it at your leisure when you feel rates are better.
Member
Jul 1, 2006
433 posts
228 upvotes
You should absolutely withdraw everything from your TFSA and close it before you leave Canada.

The IRS treats TFSA's as a foreign trust so you not only will you have to pay for any income/gains earned in the TFSA, as an added bonus you will also have extra paperwork to file. There is absolutely no good reason to keep it open while you are a US resident, and lots of very good reasons not to.

RRSP/LIRA's are a different story, since they are recognized in the treaty. The only catch is that some states (I'm looking at you California!) do not recognize RRSPs and they want taxes on incoming/capital gains there.
Member
Jul 1, 2006
433 posts
228 upvotes
mech9t5 wrote:
Jan 2nd, 2019 3:39 pm
are there any US banks that have CAD accounts? Like BMO Harris or TD?
Maybe that way you can exchange it at your leisure when you feel rates are better.
Not that I'm aware of, but there is nothing preventing OP from keeping funds in HISA's in Canada. Just make sure you open them before you depart - most banks will let you keep savings accounts open while non-resident, but will not let you open new ones.

An alternative to Interactive Brokers for holding $CAD is Fidelity:
https://www.fidelity.com/stock-trading/ ... ck-trading

Though I'm not sure how you fund a $CAD account there. Could be you'd be able to wire transfer from a Canadian based bank account.
Member
Jul 1, 2006
433 posts
228 upvotes
S5 wrote:
Jan 2nd, 2019 7:51 am
Your CAD funds are worth what they are worth. They aren’t worth what you(or apparently others in this thread) wish them to be worth. Guessing about currency movements is a mug’s game, convert your funds at the smallest possible cost(not at 1.38) and move on.
I generally agree with this if the intent of the OP is to settle in the US and not return to Canada. Otherwise, if the OP is looking to come back in 3-5 years and wants to purchase a house on return, then avoiding currency exchange and the stock market is probably the right answer. That is of course a personal thing. We hedged our bets since we didn't know if we were coming or going... so we started moving chunks of money from $CAD to $USD over time to smooth out exchange rate gyrations and once we decided we were returning, we started the process in reverse to ensure we had the funds available to buy a house.

So given that the CAD:USD exchange rate has recently gone into the crapper, you might consider transferring chunks over at a time. Open an account with something like https://www.vbce.ca (there are others) which will let you bill pay (or EFT) from your Canadian bank account and deposit directly to a US based bank account. Their exchange rates are quite good and the cross border transfer included as part of the deal makes things much easier.
Deal Addict
Oct 4, 2009
2503 posts
1295 upvotes
Montreal
sckor wrote:
Jan 3rd, 2019 9:20 pm
Otherwise, if the OP is looking to come back in 3-5 years and wants to purchase a house on return, then avoiding currency exchange and the stock market is probably the right answer.
That’s fine if those are his circumstances but for investment purposes(he mentioned closing brokerage accounts) let me repeat that the currency denomination of the investments as well as the current CAD:USD rate are irrelevant. Some further reading for those who don’t understand this.

https://canadiancouchpotato.com/2014/01 ... uity-etfs/
https://canadiancouchpotato.com/2014/01 ... uity-etfs/

As a poster on another forum likes to put it, do you way more in pounds or kilos? Moreover, unlike kg:lbs which is fixed at 2.2, it matters not if USD:CAD is 1:1, 1.345(currently) or 1.6, the investments have the same value whether VUN or VTI is held. OP should convert at smallest possible cost and move on with his life.
Member
Jul 1, 2006
433 posts
228 upvotes
S5 wrote:
Jan 4th, 2019 6:34 am
That’s fine if those are his circumstances but for investment purposes(he mentioned closing brokerage accounts) let me repeat that the currency denomination of the investments as well as the current CAD:USD rate are irrelevant.
Yep - if the OP's plan is to invest in the US stock market, then he might consider something like buying HXS or DLR in a margin account, and have it journaled over to the USD side to do the currency exchange (ie: Norberts gambit). At that point, selling DLR.U or HXS.U and buying VTI would make for an easy transition into a US based brokerage. The gambit would have to be done before becoming non-resident.
Jr. Member
Oct 24, 2005
106 posts
5 upvotes
Toronto
I would listen to Sckor if I were you most companies always give you a tax consultant who understands both US and Canadian tax, I was then able to get a second opinion, they guided me through the process of what accounts I can keep and what I needed to close.

I would suggest you do the same as to not tangle yourself with an unexpected tax liability.

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