Moving cash to Canada from the US?

[Thrifty Snail]

So I want to move a fairly good sized amount of cash from an American bank account to a Canadian one, possibility for a home purchase. Any major pitfalls to avoid?

[FLBiker]

The most efficient way to do this is using a method called "Norbert's Gambit" -- basically, you but a cross listed stock (meaning it's listed on both the NYSE and the TSX) and have your broker journal your shares over from the US version to the Canadian version, then you sell the Canadian version (in Canadian dollars).  The exact process differs by broker.

Personally, though, I've never bothered doing this.  When we bought our house in Canada (last July) I used Transferwise (now known as Wise).  It was a lot cheaper than banks, and very quick and easy.

[daverobev]

Interactive Brokers is the absolute cheapest, most likely. A proper currency exchange house will give a good quote for large amounts.

As FLBiker says, avoid the big banks.

Anything under 0.5% is reasonable. IB will give virtually spot. So on half a million, Wise will cost you ~$1800, IB will cost you $3.

[FLBiker]

One note on Interactive Brokers -- in talking with them on the phone, they were not open to having a US citizen who is a resident of Canada as a client.  They wouldn't even let me hold our IRAs there with Canadian addresses (which many US brokers would).

[LetsRetireYoung]

I picked Questrade specifically because they cater to folks in both the US and Canada. When I asked about cash transfers (USD->CAD and back), they said I'd just need to submit a request, and they'd exchange the funds at spot. :)

One other path, though, is to just buy/sell crypto... Personally, I'm not a fan of any cryptocurrencies, but that's the one aspect where they're objectively better and faster than all the traditional financial methods. (There is no guarantee, however, that the crypto's price won't fall just before you sell it. Might be risky.)

[FLBiker]

I picked Questrade specifically because they cater to folks in both the US and Canada. When I asked about cash transfers (USD->CAD and back), they said I'd just need to submit a request, and they'd exchange the funds at spot. :)

Woah, really?  I have a Questrade account (it's where I moved our USD taxable) and I had no idea they would do this.  We haven't sold anything yet, but when the time comes to withdraw I will definitely do this.

Edit: According to their website they target a spread of 2.5 pips for USD to CAD exchanges.  So if I'm doing my math right, on $500,000, that would cost me $62.50 ($500,000 x .000125).  That's much better than Wise.  Thanks!

[LetsRetireYoung]

Woah, really?  I have a Questrade account (it's where I moved our USD taxable) and I had no idea they would do this.  We haven't sold anything yet, but when the time comes to withdraw I will definitely do this.

Edit: According to their website they target a spread of 2.5 pips for USD to CAD exchanges.  So if I'm doing my math right, on $500,000, that would cost me $62.50 ($500,000 x .000125).  That's much better than Wise.  Thanks!

Yup. :) I've just checked my records - here is what they told me in a customer support chat 5 months ago:

"All our accounts including the Margin account hold dual currency, If you deposit USD the currency will stay as USD. If you deposit in CAD the currency will stay in CAD. Note for depositing in USD, the funding method for this can include a Pre-authorized deposit (can use to fund both in USD and CAD) which you can set up under the funding page of my.questrade. And for CAD we offer Instant deposit (if you have a visa debt), or online bill payment which takes 1-2 business days"

and

"Yes, you can exchange currency from USD to CAD and vice versa. This is possible through our platform. When you login you go to Requests > Exchange funds. We use the end of day rates, and we follow the market rates, and all exchange requests received prior to 2:30pm EST are processed the same day"

I hope this helps!