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[Questrade] Questrade: Hold US $ In RRSP & Buy Stocks with US Dollars w/ No Conversion Fees

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  • Aug 16th, 2010 4:40 am
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[OP]
Deal Addict
Sep 13, 2007
4377 posts
4253 upvotes
Toronto

[Questrade] Questrade: Hold US $ In RRSP & Buy Stocks with US Dollars w/ No Conversion Fees

Starting today, Questrade will let you hold US dollars in registered retirement accounts. You can desposit U.S. dollars into your account, hold them in cash form and then use them to buy US stocks. If you want to sell a US stock, you indicate online that you want the transaction carried out in in American dollars. The caveat is that you pay an extra $5 commission for U.S. dollar trades in RRSP accounts. On the bright side, the fee is paid once on a day when you trade US stocks, not per transaction. More details can be found in this Globe and Mail article.

If you're interested, you can sign up at Questrade.com. Use coupon code redflagdeals during the sign up process and you will receive $50 in free trades as well.
9 replies
Deal Addict
User avatar
Jan 7, 2003
2687 posts
432 upvotes
Ottawa
is this only for RRSP or general trading too?
Deal Fanatic
User avatar
Mar 5, 2006
5922 posts
155 upvotes
Murica
dux wrote:
Jan 14th, 2008 2:13 pm
is this only for RRSP or general trading too?
the post is about holding US dollars in the RRSP.

General trading will still require you to hold the proper currency for settlement of your trade, as usual.
Sr. Member
Sep 14, 2003
977 posts
1 upvote
Finally.

I've lost hundreds on conversions in the past 2 months.
Sr. Member
User avatar
May 4, 2004
511 posts
22 upvotes
Toronto
Hmmm... I was told by questrade rep last year that it is required by law RRSP account needs to be in CAD$. Each time you need to trade U.S. stock, you would loose $ in conversion. I went with Canadian stocks and lost big time.
So, it is NOT required by law.
Newbie
Dec 1, 2007
67 posts
9 upvotes
It's definitely not required by the CRA to have foreign exchanges. TD Waterhouse does not have a US $ RSP but they do 'washing' of trades with a US $ Money Market....this allows the foreign exchange to be cancelled out. It's a tedious process because after you're done trading for the day, you have to call the hotline to inform a rep to have the rates washed so the responsibility lies on you.

For example, if you sold 100 shares of RIMM @ $100/share USD, there will be a foreign exchanged initially charged...let's say 1.02 (CDN/USD). Thus the transaction would should net a credit (ignoring commissions & sec fee) of 100x100x1.02 = 10200 CDN credit. If you trade US stocks often you will not want to have this proceeds converted back to CDN, so what the rep will do is buy $10000 of the US money market at the same rate of 1.02 to cancel out the effect (wash) of the foreign exchange. Thus your money would be held in the money market and be preserved in US$.

But this Questrade account will work a lot more efficiently as the process of washing at Waterhouse is confusing to most people. It's too bad Questrade is charging that $5 fee per day.
Deal Fanatic
Dec 11, 2003
7832 posts
320 upvotes
So if you say, switch from US Stock A to US Stock B in a registered account, you will get hit 0.5% twice. As long as your order is more than $500, the $5 per day deal will be better. Am I correct?
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Sr. Member
Oct 26, 2003
667 posts
60 upvotes
AndrewRFD wrote:
Jan 14th, 2008 2:11 pm
Starting today, Questrade will let you hold US dollars in registered retirement accounts. You can desposit U.S. dollars into your account, hold them in cash form and then use them to buy US stocks. If you want to sell a US stock, you indicate online that you want the transaction carried out in in American dollars. The caveat is that you pay an extra $5 commission for U.S. dollar trades in RRSP accounts. On the bright side, the fee is paid once on a day when you trade US stocks, not per transaction. More details can be found in this Globe and Mail article.

If you're interested, you can sign up at Questrade.com. Use coupon code redflagdeals during the sign up process and you will receive $50 in free trades as well.

You could always do this with TD Waterhouse. I didn't know about this until recently and lost tons of money before on conversion back and forth. Then when I knew and kept it in US $, I then lost tons of money because the CAD $ went from $0.82 to par. Either way, I still lost out :(
Newbie
Jan 11, 2008
17 posts
Niagara Falls
Questrade advertises the ability to hold U.S. dollars in a registered account quite aggresively. However, be aware that you will continue to be subject to forced currency conversions of U.S. dollar dividend payments to the account. Neither the current advertising campagn nor their website (as of today) makes reference to this. This lack of disclosure borders on unethical behaviour and long term dividend investors who have made the switch, assuming they were finished with forced currency conversions, will feel duped.
Deal Addict
May 31, 2007
4996 posts
2111 upvotes
Bringing this thread up from the dead. What's the cheapest way to convert USD and how do you deposit USD in QuestradE?

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