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Questrade: everyone check now, before moving cash

  • Last Updated:
  • Jan 14th, 2019 1:45 pm
[OP]
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Jun 26, 2005
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Questrade: everyone check now, before moving cash

This may already have been posted, but it warrants repeating in my opinion. I found out the hard way (sadly).

Moving USD cash from Margin to TFSA

Inside Questrade margin account, I had USD cash. I decided to move that to Questrade TFSA, to avoid paying taxes on gains. I did the REQUEST, clicked USD, and submit.

In 2 days, low and behold, I check my TFSA balance, $$$ was in CAD, and ZERO dollars in my USD. WTH!!

I phoned Questrade and yes, it converted my USD (to CAD) automatically. After she investigated, she said it was because my setting of "Currency settlement" was set to CAD. Apparently by me back in 2010.

What I knew was, I learned from before (the hard way like many here), that there's a trade settlement currency setting. I never knew MOVING CASH is considered a "settlement". Even in the trading terminology, settlement is when you complete a buy or sell of a stock right? So another lesson learned.

I told Questrade to put a note or warning in their request page: "Funds will be converted to the currency as per Currency settlement selected" , so users will know.

In summary, everyone should go now, into their Questrade account (not the app) . Before you move cash or trade.

My accounts > select your account> account management > account management> currency settlement

If you don't want any conversions, select "Currency of Transaction"


Now, I also found out something new, in our Margin accounts, there is not such option of Currency Settlement. Which I thought we always had before. Questrade rep told me, it is set to "currency of transaction".

So, to me this means, if you have $10,000 CAD and $0 USD, and you go by AAPL on the Nasdaq.

Questrade will lend you USD on margin, your USD will now be in negative (interest will start). Let's say you make a profit.

When you Sell AAPL, the cash will now be in your USD as USD. It will not convert to CAD.

Hope this helps others to avoid some headaches. Lucikly, I think CAD is stronger today, and charts tell me it can be stronger still. I'll have to convert back to USD soon.
10 replies
Member
Aug 5, 2018
206 posts
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Hello.

I tried but I couldn't find the settings you speak of.

Can you confirm whether it still exists?

If I go to "transfer funds" under "requests", I can see I can transfer from margin to TFSA, with CAD or USD as currency option.

Are you saying if I select USD from margin to TFSA, I'll still get my USD in margin converted to CAD in TFSA?

This makes no sense...
Deal Addict
Nov 2, 2005
3304 posts
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Ottawa
Yes, their website extols the benefits of automatic currency conversion but fails to point out the pitfalls if you don't have it set up correctly. It's also not clear that the term "settlement" also applies to simple cash transfers.

Their default is wrong, it should be to settle in the currency of the transaction. You should have to opt out of this if you want to auto convert.

Note that this currency conversion also applies to deposits you make from external accounts in the non default currency. I got dinged first time transferred USD into my RRSP from my CIBC account and it got auto converted to CAD the next day, the absolute last thing I expected to happen. I was planning to buy some US equities and was so pissed off at the prospect of having to convert back to USD again.

It was a sizeable amount but I also had a substantial CAD balance in the account. I gave them a choice and they chose to keep my business and undid the conversion.

YMMV probably depending on how big your account is and how much the transaction was.

xx1what wrote:
Jan 8th, 2019 3:10 am
Are you saying if I select USD from margin to TFSA, I'll still get my USD in margin converted to CAD in TFSA?
Yes, if your TFSA is configured to settle in CAD. This is the default setting, you need to manually change it, as rfdrfd points out, to settle in the transaction currency.
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Oct 26, 2003
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op, how do you fund your account and take fund out of your account in USD? do you have an USD bank account? How do I get one?
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Aug 5, 2018
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divx wrote:
Jan 11th, 2019 1:34 pm
op, how do you fund your account and take fund out of your account in USD? do you have an USD bank account? How do I get one?
Well, a lot of USD accounts are pay per use in Canada.

The only free one that I know of is RBC US Savings account.
You get 1 free withdraw every month (including pre-authorized withdraw from Questrade or other brokers)
No monthly fees.

Bad part is $5 per withdraw above the 1 free though.



CIBC has a good one for $0.75 per withdraw.
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Oct 26, 2003
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xx1what wrote:
Jan 11th, 2019 4:52 pm
Well, a lot of USD accounts are pay per use in Canada.

The only free one that I know of is RBC US Savings account.
You get 1 free withdraw every month (including pre-authorized withdraw from Questrade or other brokers)
No monthly fees.

Bad part is $5 per withdraw above the 1 free though.



CIBC has a good one for $0.75 per withdraw.
must withdraw at teller I assume? the bank machine won't be loaded with USD.
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Aug 5, 2018
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divx wrote:
Jan 11th, 2019 4:53 pm
must withdraw at teller I assume? the bank machine won't be loaded with USD.
What do you mean?

If you want to withdraw USD to deposit from broker, you initiate the transaction from the broker.

If you want USD cash, then there are much more ways to attain USD from CAD, one of the best ways is through a broker, such as journal DLR.TO.
RBC has USD in some ATM as well.

The ATM withdraw limit may be really low though.

If you go in branch, you can withdraw a lot, especially if you order beforehand.
Deal Addict
Nov 2, 2005
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Ottawa
divx wrote:
Jan 11th, 2019 4:53 pm
must withdraw at teller I assume? the bank machine won't be loaded with USD.
Many, if not most, CIBC machines at branch locations accept and dispense US$ now. I use CIBC and, in the case where I expect to be holding cash for a bit, I'll transfer to my Tangerine US$ savings account to get a bit of interest.
[OP]
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Jun 26, 2005
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xx1what wrote:
Jan 11th, 2019 4:52 pm
Well, a lot of USD accounts are pay per use in Canada.

The only free one that I know of is RBC US Savings account.
You get 1 free withdraw every month (including pre-authorized withdraw from Questrade or other brokers)
No monthly fees.

Bad part is $5 per withdraw above the 1 free though.



CIBC has a good one for $0.75 per withdraw.
Thanks for answering. Yes, I have a USD account in CIBC.

But i rarely move USD out of my Questrade. I just keep it in there to keep on trading and growing. Then one day when I retire? I'll cash out a big amount hehe
[OP]
Deal Fanatic
User avatar
Jun 26, 2005
8987 posts
1124 upvotes
Toronto
xx1what wrote:
Jan 8th, 2019 3:10 am
Hello.

I tried but I couldn't find the settings you speak of.

Can you confirm whether it still exists?

If I go to "transfer funds" under "requests", I can see I can transfer from margin to TFSA, with CAD or USD as currency option.

Are you saying if I select USD from margin to TFSA, I'll still get my USD in margin converted to CAD in TFSA?

This makes no sense...
Sorry for my delay, were you able to find this option?
Member
Aug 5, 2018
206 posts
201 upvotes
rfdrfd wrote:
Jan 14th, 2019 11:05 am
Sorry for my delay, were you able to find this option?
No.

wasn't able to find the option.

Chatted with rep, she assured me that it won't get converted to CAD.

Uh... not sure what's gonna happen.

I did the transfer: USD in margin to USD in TFSA.
I hope I don't screwed with the conversion.

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