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$16K+ USD Cheque - maximize CAD exchange?

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[OP]
Member
Feb 11, 2009
348 posts
640 upvotes
Chilliwack

$16K+ USD Cheque - maximize CAD exchange?

I am depositing several cheques totalling between 16-18K USD. I am trying to figure out the best way to maximize my possible return in CAD. Just looking for any possible suggestions. My plan was to deposit at my credit union into CAD, but I'm not sure about what possible alternative avenues exist?
"In a time of universal deceit - telling the truth is a revolutionary act."
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Deal Addict
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Jul 16, 2019
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UrbanPoet wrote: Knightsbridge.
I also find the fx exchange from investment brokerages to be a good rate.
According to the calculators on their home pages, XE's rates are slightly better than Knightsbridge's. At XE, $16 000 USD gets you $20 157.31 CAD, while at Knightsbridge, $16 000 USD gets you $20 156.32 CAD.

Are there any forex places that give better rates than XE or Knightsbridge?

Norbert's gambit should be better than any forex company, though. Get your USD into a cash account or margin account at Questrade or Interactive Brokers. (There may be other brokerages you can use for this, but I'm not sure.) Use it to buy DLR.U.TO, which is just a stable ETF that holds a bunch of USD. Contact the brokerage to have them journal your DLR.U.TO shares to DLR.TO shares. When the journaling process finishes a few days later, sell your DLR.TO, which will give you CAD.

Whichever method you choose, you'll first have to open a USD account where you can deposit the cheques without immediately converting to CAD.
[OP]
Member
Feb 11, 2009
348 posts
640 upvotes
Chilliwack
Thanks for this. Gonna give it a go. Slightly Smiling Face
"In a time of universal deceit - telling the truth is a revolutionary act."
George Orwell
Jr. Member
Jun 29, 2009
187 posts
52 upvotes
Mississauga
I agree, Norbert’s Gambit for the win. It’s well documented, just google it and add your bank/trading platform name in the search - you’ll find the step-by-step walkthrough for any of the big-5 banks
Deal Addict
Nov 13, 2013
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Ottawa
Is this worth it for such a small check? You are looking at losing in spread a few hundred dollars. If you already have a USD account and a USD trading and CAD trading account fine but to open new accounts. Wait for the cheque hold, Account to fund journal over etc. Still have to pay for the bid ask spread and transaction fee for the ETF.
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Jan 27, 2004
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T.O. Lotto Captain
someweirdo wrote: According to the calculators on their home pages, XE's rates are slightly better than Knightsbridge's. At XE, $16 000 USD gets you $20 157.31 CAD, while at Knightsbridge, $16 000 USD gets you $20 156.32 CAD.

Are there any forex places that give better rates than XE or Knightsbridge?

Norbert's gambit should be better than any forex company, though. Get your USD into a cash account or margin account at Questrade or Interactive Brokers. (There may be other brokerages you can use for this, but I'm not sure.) Use it to buy DLR.U.TO, which is just a stable ETF that holds a bunch of USD. Contact the brokerage to have them journal your DLR.U.TO shares to DLR.TO shares. When the journaling process finishes a few days later, sell your DLR.TO, which will give you CAD.

Whichever method you choose, you'll first have to open a USD account where you can deposit the cheques without immediately converting to CAD.
Yep! Shop around.

ANYTHING is better then going to the bank.
Deal Expert
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Jan 27, 2004
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T.O. Lotto Captain
fogetmylogin wrote: Is this worth it for such a small check? You are looking at losing in spread a few hundred dollars. If you already have a USD account and a USD trading and CAD trading account fine but to open new accounts. Wait for the cheque hold, Account to fund journal over etc. Still have to pay for the bid ask spread and transaction fee for the ETF.
Hey rich guy. $100 is a lot of money.
But if you want... you can give me your $100 :-D
Jr. Member
Jun 29, 2009
187 posts
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Mississauga
fogetmylogin wrote: Is this worth it for such a small check? You are looking at losing in spread a few hundred dollars. If you already have a USD account and a USD trading and CAD trading account fine but to open new accounts. Wait for the cheque hold, Account to fund journal over etc. Still have to pay for the bid ask spread and transaction fee for the ETF.
The spread shouldn’t be that much on 16k if you’re set up. The stocks generally track pretty close to each other. While transaction fees vary, they’re negligible. I did it with CIBC Investors Edge on the phone with an advisor my first time. Explained what I was intending to do and he knew the process exactly and just did it for me without a advisor fee.. just the transaction fee of the buy & sell which was $6.95ea. He completed the (buy, journal, sell) process in about 15 seconds. I took a total hit of ~$40 CAD with fees on 25k USD conversion.
Jr. Member
Oct 26, 2014
132 posts
88 upvotes
Colorado
someweirdo wrote: According to the calculators on their home pages, XE's rates are slightly better than Knightsbridge's. At XE, $16 000 USD gets you $20 157.31 CAD, while at Knightsbridge, $16 000 USD gets you $20 156.32 CAD.

Are there any forex places that give better rates than XE or Knightsbridge?

Norbert's gambit should be better than any forex company, though. Get your USD into a cash account or margin account at Questrade or Interactive Brokers. (There may be other brokerages you can use for this, but I'm not sure.) Use it to buy DLR.U.TO, which is just a stable ETF that holds a bunch of USD. Contact the brokerage to have them journal your DLR.U.TO shares to DLR.TO shares. When the journaling process finishes a few days later, sell your DLR.TO, which will give you CAD.

Whichever method you choose, you'll first have to open a USD account where you can deposit the cheques without immediately converting to CAD.
Hi there, not to hijack this post but I have this scenario just in the opposite direction. I will be in a position to convert a sizeable amount of CAD into USD. I have a USD acct at one of the big 5, so I imagine I need to perform the same process of linking a FX company?
If the amount is quite large - I am talking a few hundred thousand - is there a strategy eg, convert $50k at 8 AM each morning when the rate might be best, or just go with the entire amount...then go offline and not watch the rate :)
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Jul 16, 2019
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neluabaclia wrote: Hi there, not to hijack this post but I have this scenario just in the opposite direction. I will be in a position to convert a sizeable amount of CAD into USD. I have a USD acct at one of the big 5, so I imagine I need to perform the same process of linking a FX company?
If the amount is quite large - I am talking a few hundred thousand - is there a strategy eg, convert $50k at 8 AM each morning when the rate might be best, or just go with the entire amount...then go offline and not watch the rate :)
If you're converting an amount that large, I recommend using Norbert's gambit. It involves a few extra steps, but it will save you money.
Jr. Member
Oct 26, 2014
132 posts
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Colorado
someweirdo wrote: If you're converting an amount that large, I recommend using Norbert's gambit. It involves a few extra steps, but it will save you money.
Excellent, thank you!
Sr. Member
Nov 16, 2013
828 posts
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GTA
Which account would you recommend for NG?

If the objective is to get the USD to CAD and then withdrawin to a bank account then RRSP / TFSA will not work due to withdrawal rules .

In Non registered account, it is possible to move but I am not sure if this will this impact the capital gain taxes
Shadow Rider wrote: Norbert's DLR.U and DLR works very well
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Sep 11, 2006
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vivmk20 wrote: Which account would you recommend for NG?

If the objective is to get the USD to CAD and then withdrawin to a bank account then RRSP / TFSA will not work due to withdrawal rules .

In Non registered account, it is possible to move but I am not sure if this will this impact the capital gain taxes
questrade. you might have capital gain....or you might have capital loss.

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