Personal Finance

Best way to transfer USD to CAD? Questions about Norbert's Gambit, TD Borderless Account, help please?

  • Last Updated:
  • Jan 21st, 2022 11:57 am
Jr. Member
Jul 6, 2010
175 posts
87 upvotes
Alberta

Best way to transfer USD to CAD? Questions about Norbert's Gambit, TD Borderless Account, help please?

I get paid online with USD and before I used to get paid directly in USD Paypal and would use Transferwise to then convert and transfer to my CAD Chequing Account. I am now forced to receive money into a USD Bank Account that's not Paypal, so I had to open a TD Borderless USD Account. It's not possible to transfer from TD Borderless to Transferwise, so I need to find another way to transfer USD from my TD Borderless to a CAD Checking Account.

I've heard transferring using TD Borderless to TD Chequing incurs pretty high Exchange fees. So would like to avoid this as I will be transferring approximately $10K USD every month. So i need to find the cheapest way to transfer money on a consistent basis.

I've researched Norbert's Gambit, and it seems simple enough to do once you have all your accounts set up. But from what I'm reading this may be a solution if you plan on transferring/exchanging the funds, then using funds to invest in stocks or whatever a trading account would allow for. For me, I don't plan on doing stocks or investing using the trading account, I simply want my USD money to convert and be deposited in CAD. So possibly opening a trading account for the sole and only purpose of converting money using the Norberts Gambit might not be the optimal solution for me? What I am worried about, is if there are fees to transfer funds into and out of my Trading Account. So for example, let's say I open a Questtrade or TD Direct Investing account, when I transfer USD funds into this trading account for the purposes of Norbert's Gambit and then transfer it out in CAD after Norbert's Gambit is complete will I need to pay fees for these transfers? I know each trade (buying or selling DLR.U or DLR.TO will incur a commission fee), but what about when wanting to transfer funds away from my trading account and into chequing and vice versa? All the info online on how to do the Gambit don't seem to mention this, and seems to assume that you'll be using the exchanged funds for trading/investing.

I would also be open to other options beside Norbert's Gambit, if someone has some suggestions, but from my research it seems like this would be the best option assuming transfering into and out of a trading account is cost-free.
17 replies
Newbie
User avatar
Dec 18, 2012
18 posts
8 upvotes
Toronto
I'm in similar situation and using KnightsbridgeFX every month for that purpose for a few years already. Didn't have any problems so far. Using direct deposit most of the times.
Sr. Member
Jan 24, 2013
678 posts
686 upvotes
Rainy River
OP the online brokerages will charge you commissions to do the trades, but there aren't fees to transfer funds into or out of brokerage accounts to your chequing accounts. In your post you state you don't want to do trading other than perhaps these currency conversion trades. Just be aware that some of the online brokerages out there require you to maintain a balance of say 15K or 20K in order to not be charged an anuual maintenance fee. If you are going to do Norbert's Gambit and that alone, I'd be more concerned about annual administration charges. TD Direct Investing charges if you don't maintain a balance of 15K in your online brokerage account.

https://www.td.com/ca/document/PDF/forms/521778.pdf

Questrade may be a better alternative for you as they don't have minimum balance maintenance fees, and they don't charge commissions on ETF buy orders. Again there aren't fees from the brokerage to transfer money into or out of your brokerage account. If you find online brokerages too much of a hassle check out Knightsbridge or some people like Wise.
Sr. Member
Jan 24, 2013
678 posts
686 upvotes
Rainy River
Actually in TD Direct's case it is a quarterly maintenance charge of $25.00 as I read their fee schedule.
Deal Addict
User avatar
Jul 16, 2019
1577 posts
2008 upvotes
I'm in a somewhat similar situation with how I get paid.
PC_Cola wrote: I get paid online with USD and before I used to get paid directly in USD Paypal and would use Transferwise to then convert and transfer to my CAD Chequing Account.
I used to do this, too. But I didn't like paying Wise's fees, so I found a cheaper workflow.

I transfer my USD from Paypal to my Convenience Checking Account with TD Bank N.A. It's an American bank account, so Paypal doesn't charge any hidden fees and it stays in USD. You can learn how to connect your Canadian Paypal account to your American checking account here. And getting an account with TD Bank N.A. is pretty easy.

Then I transfer the money to my US Daily Interest Chequing Account at TD Canada Trust, though their Borderless Account would also work fine. Here are instructions on how to do this.

Then I transfer the money to my brokerage. From there, I either buy American ETFs or do Norbert's gambit to cheaply convert it to CAD.

The only time I get charged during this process is when I do Norbert's gambit. None of the other transfers cost anything.
PC_Cola wrote: I am now forced to receive money into a USD Bank Account that's not Paypal, so I had to open a TD Borderless USD Account.
I didn't know this was possible with the Borderless Account. For clients that want to deposit USD into my bank account, I just have them use my Convenience Checking Account at TD Bank N.A.
PC_Cola wrote: It's not possible to transfer from TD Borderless to Transferwise, so I need to find another way to transfer USD from my TD Borderless to a CAD Checking Account.
Yeah, Transferwise doesn't do this because they like to keep currencies in their home countries. Holding USD in Canada wouldn't work well with their business model, which requires them to avoid moving money across borders as much as possible.

In any case, you'll get a better conversion rate if you transfer the USD to a brokerage and do Norbert's gambit. Or you can use a cheap forex place like Knightsbridge or XE, though this won't be as cheap as Norbert's gambit.
PC_Cola wrote: I've heard transferring using TD Borderless to TD Chequing incurs pretty high Exchange fees.
This is true. Never use a big bank to convert currency if you can avoid it.
PC_Cola wrote: I've researched Norbert's Gambit, and it seems simple enough to do once you have all your accounts set up. But from what I'm reading this may be a solution if you plan on transferring/exchanging the funds, then using funds to invest in stocks or whatever a trading account would allow for. For me, I don't plan on doing stocks or investing using the trading account, I simply want my USD money to convert and be deposited in CAD. So possibly opening a trading account for the sole and only purpose of converting money using the Norberts Gambit might not be the optimal solution for me?
After you use Norbert's gambit to convert your USD to CAD, you're free to transfer it to a CAD chequing account. You're under no obligation to invest it.
PC_Cola wrote: What I am worried about, is if there are fees to transfer funds into and out of my Trading Account.
I don't know of any brokerage that charges fees for transferring money into or out of your account.
PC_Cola wrote: So for example, let's say I open a Questtrade or TD Direct Investing account, when I transfer USD funds into this trading account for the purposes of Norbert's Gambit and then transfer it out in CAD after Norbert's Gambit is complete will I need to pay fees for these transfers?
Nope.

One thing to keep in mind is that many brokerages have minimum balances for you to have an account or avoid maintenance fees. I believe it used to be $1000 at Questrade, but I think they've changed it. Whatever brokerage you're considering, you might want to contact them and ask. And keep in mind there may be a difference between the minimum initial deposit and the minimum ongoing balance.
Deal Fanatic
Jan 21, 2018
9652 posts
10924 upvotes
Vancouver
retireyoung55 wrote: Actually in TD Direct's case it is a quarterly maintenance charge of $25.00 as I read their fee schedule.
Most people forget about that fee because they have more than the required minimum investment funds in their RD Direct account, but good to mention it.
Jr. Member
Aug 21, 2011
160 posts
60 upvotes
I have used xe.com to transfer funds between banks in two different countries, after doing some research. The rate was the best I could find. But I will be interested to hear if there is a better alternative. I was transferring money from CAD to MAD. I can not use stock trading accounts for that.

For USD-CAD transfers, opening a trading account with Interactive brokers may be a good option. They have a good mobile app and easy ways to transfer money between your bank account and trading account.
Jr. Member
Aug 21, 2011
160 posts
60 upvotes
malina11 wrote: I'm in similar situation and using KnightsbridgeFX every month for that purpose for a few years already. Didn't have any problems so far. Using direct deposit most of the times.
Did you ever compare the rates with xe.com? I remember I looked at Knightsbridge a couple years ago but not sure why I went with xe.com.

What I don't like with xe.com is that it takes about 6 business days for the transfer to be completed.
Jr. Member
Jul 6, 2010
175 posts
87 upvotes
Alberta
retireyoung55 wrote: OP the online brokerages will charge you commissions to do the trades, but there aren't fees to transfer funds into or out of brokerage accounts to your chequing accounts. In your post you state you don't want to do trading other than perhaps these currency conversion trades. Just be aware that some of the online brokerages out there require you to maintain a balance of say 15K or 20K in order to not be charged an anuual maintenance fee. If you are going to do Norbert's Gambit and that alone, I'd be more concerned about annual administration charges. TD Direct Investing charges if you don't maintain a balance of 15K in your online brokerage account.

https://www.td.com/ca/document/PDF/forms/521778.pdf

Questrade may be a better alternative for you as they don't have minimum balance maintenance fees, and they don't charge commissions on ETF buy orders. Again there aren't fees from the brokerage to transfer money into or out of your brokerage account. If you find online brokerages too much of a hassle check out Knightsbridge or some people like Wise.
Thank you! Exactly the questions I wanted addressed and more. Considering lack of balance maintenance fees with Questrade, that may be the way to go and should make Norbert's Gambit a viable option for me.
Jr. Member
Jul 6, 2010
175 posts
87 upvotes
Alberta
someweirdo wrote: I'm in a somewhat similar situation with how I get paid.



I used to do this, too. But I didn't like paying Wise's fees, so I found a cheaper workflow.

I transfer my USD from Paypal to my Convenience Checking Account with TD Bank N.A. It's an American bank account, so Paypal doesn't charge any hidden fees and it stays in USD. You can learn how to connect your Canadian Paypal account to your American checking account here. And getting an account with TD Bank N.A. is pretty easy.

Then I transfer the money to my US Daily Interest Chequing Account at TD Canada Trust, though their Borderless Account would also work fine. Here are instructions on how to do this.

Then I transfer the money to my brokerage. From there, I either buy American ETFs or do Norbert's gambit to cheaply convert it to CAD.

The only time I get charged during this process is when I do Norbert's gambit. None of the other transfers cost anything.



I didn't know this was possible with the Borderless Account. For clients that want to deposit USD into my bank account, I just have them use my Convenience Checking Account at TD Bank N.A.



Yeah, Transferwise doesn't do this because they like to keep currencies in their home countries. Holding USD in Canada wouldn't work well with their business model, which requires them to avoid moving money across borders as much as possible.

In any case, you'll get a better conversion rate if you transfer the USD to a brokerage and do Norbert's gambit. Or you can use a cheap forex place like Knightsbridge or XE, though this won't be as cheap as Norbert's gambit.



This is true. Never use a big bank to convert currency if you can avoid it.



After you use Norbert's gambit to convert your USD to CAD, you're free to transfer it to a CAD chequing account. You're under no obligation to invest it.



I don't know of any brokerage that charges fees for transferring money into or out of your account.



Nope.

One thing to keep in mind is that many brokerages have minimum balances for you to have an account or avoid maintenance fees. I believe it used to be $1000 at Questrade, but I think they've changed it. Whatever brokerage you're considering, you might want to contact them and ask. And keep in mind there may be a difference between the minimum initial deposit and the minimum ongoing balance.
Awesome!

Thanks so much for your thorough reply. You've put my mind at ease.
Jr. Member
Jul 6, 2010
175 posts
87 upvotes
Alberta
malina11 wrote: I'm in similar situation and using KnightsbridgeFX every month for that purpose for a few years already. Didn't have any problems so far. Using direct deposit most of the times.
Thanks. Its an option for sure, but since It'll be ongoing income from USD, I think I should look into Gambit as a Plan A.
Sr. Member
Nov 16, 2013
917 posts
330 upvotes
GTA
I get paid in US. I follow this simple process.

Money get paid in my US TD Checking account
I transfer it to TD Borderless USD account in Canada ( no charge)
Connected Borderless account to my brokerage (Questrade) - again no charge
Do the Norbert’s Gambit and covert money to CAD ( charges for selling ETF)
Transfer to CAD to my TD account.

works well.
Jr. Member
Jul 6, 2010
175 posts
87 upvotes
Alberta
vivmk20 wrote: I get paid in US. I follow this simple process.

Money get paid in my US TD Checking account
I transfer it to TD Borderless USD account in Canada ( no charge)
Connected Borderless account to my brokerage (Questrade) - again no charge
Do the Norbert’s Gambit and covert money to CAD ( charges for selling ETF)
Transfer to CAD to my TD account.

works well.
Awesome, thanks for your reply. I think I will go this exact route. Was there any particular reason you chose Questrade over say TD Direct Investing? I was initially thinking that if I kept all accounts TD it may make it easier, but Questrade seems to be the better platform and seems to have more reviews/history regarding using it for successful Norbert Gambits.

Also, I am getting paid directly to my TD Borderless Account in USD. Is there any benefit to having a TD USD Checking account as you use in the 1st step before transferring to borderless?
Jr. Member
Feb 28, 2013
117 posts
37 upvotes
Toronto
vivmk20 wrote: I get paid in US. I follow this simple process.

Money get paid in my US TD Checking account
I transfer it to TD Borderless USD account in Canada ( no charge)
Connected Borderless account to my brokerage (Questrade) - again no charge
Do the Norbert’s Gambit and covert money to CAD ( charges for selling ETF)
Transfer to CAD to my TD account.

works well.
Which account do you use in Questrade for Norbert's Gambit. You need to keep track on any captital gains/ loss and or withholding taxes depending if using registered or non registered account.
Jr. Member
Jul 6, 2010
175 posts
87 upvotes
Alberta
Follow up question for the thread. About to open a Questrade account for NG. Just wondering if I should be Questrade's TFSA, RRSP, or Margin account? Are there pros/cons to each with regards to performing NG on a regular monthly basis? I was initially thinking I would set up a TFSA account, but if I am doing NG monthly for the amounts of 10K each time, would there be complications with reaching/exceeding my contribution limits in a TFSA account? Would I need to do additional US/Canadian Tax Reporting using a TFSA as opposed to just a Margin account?
Deal Addict
User avatar
Jul 16, 2019
1577 posts
2008 upvotes
ashbbey wrote: Which account do you use in Questrade for Norbert's Gambit.
PC_Cola wrote: Follow up question for the thread. About to open a Questrade account for NG. Just wondering if I should be Questrade's TFSA, RRSP, or Margin account?
Don't use a registered account for Norbert's gambit if you plan to withdraw the money rather than invest it. Use a margin account or, for brokerages that offer it, a cash account. You don't want to waste TFSA contribution room on this and trying to use an RRSP would be shooting yourself in the foot because of its withdrawal restrictions.
ashbbey wrote: You need to keep track on any captital gains/ loss and or withholding taxes depending if using registered or non registered account.
Yes to capital gains and losses. But they'll be minimal and they often balance out.

I don't know of any withholding taxes that would be applicable.
Jr. Member
Feb 28, 2013
117 posts
37 upvotes
Toronto
I don't know of any withholding taxes that would be applicable.
[/quote]

Great breakdown, thank you. Im not sure if withholding taxes would be applicable in one was to withdraw from an RRSP account with Norbert's Gambit . Absolutely use an margin account to minimize tax implication if this was the case.
Member
Mar 31, 2013
346 posts
1112 upvotes
Courtenay, BC
Also consider Interactive Brokers, since Forex trading is one of their options you will get the rock bottom exchange rate and a minimal transaction fee. It can be a pain to set up and is a bit of a learning curve, but once it is you have a super easy and cheap way for currency conversions, and one of the cheapest trading platforms, ESPECIALLY if you dabble in option trading.
Set up a margin account, set up your bank account(s) transfer details and boom, you are done. Just transfer money in, and transfer money out. No dicking around buying and selling stock interlisted on different exchanges.

Top

Thread Information

There is currently 1 user viewing this thread. (0 members and 1 guest)