Author Topic: Moving cash to Canada from the US?  (Read 3124 times)

Thrifty Snail

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Moving cash to Canada from the US?
« on: October 11, 2021, 08:41:20 AM »
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

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Re: Moving cash to Canada from the US?
« Reply #1 on: October 12, 2021, 10:07:56 AM »
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

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Re: Moving cash to Canada from the US?
« Reply #2 on: October 17, 2021, 03:29:30 PM »
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

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Re: Moving cash to Canada from the US?
« Reply #3 on: October 18, 2021, 09:05:40 AM »
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

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Re: Moving cash to Canada from the US?
« Reply #4 on: November 14, 2021, 07:50:44 PM »
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

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Re: Moving cash to Canada from the US?
« Reply #5 on: November 15, 2021, 09:12:21 AM »
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!
« Last Edit: November 15, 2021, 09:24:28 AM by FLBiker »

LetsRetireYoung

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Re: Moving cash to Canada from the US?
« Reply #6 on: November 15, 2021, 09:29:19 AM »
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!

Thrifty Snail

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Re: Moving cash to Canada from the US?
« Reply #7 on: August 24, 2022, 10:14:18 AM »
I am bumping my own thread here. Thanks for the information and I'm using wise. This process is taking longer than expected but the forum is very helpful.

TS

kenmoremmm

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Re: Moving cash to Canada from the US?
« Reply #8 on: August 30, 2022, 11:56:47 PM »
Definitely use Wise. Just make sure bank accounts are set up correctly and that you don't need the money asap because their estimated ACH transfer times are definitely not same day.

birdadam

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Re: Moving cash to Canada from the US?
« Reply #9 on: September 10, 2022, 07:23:32 PM »
Not to hi-jack this thread, but I think this is related.

I am from Canada, and recently moved to the USA for work. I have money in a non-registered account with Questrade in Canada, and they will not let me hold it any more since I am not a resident. I need to move ~ 30,000 CAD from Canada to the USA, probably into an Interactive Brokers account. I may keep it in CAD or switch it to USD - I haven't decided.

My question is about income tax: will the US government try to tax me on this transfer of money into the USA, as if it is some sort of income? I think that I can figure out the transfer, but I don't want to get hit with some sort of tax on $30000 of "income". I have heard that transfers over $10000 need to be reported, but that it is just for money laundering and fraud reasons, not any sort of taxation.

I am already aware that the 2022 investment gains on this money will be taxed by both Canada and the US, and that I can somehow have one of these taxes refunded to avoid being double taxed.

Thanks!

daverobev

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Re: Moving cash to Canada from the US?
« Reply #10 on: September 11, 2022, 03:27:59 AM »
Not to hi-jack this thread, but I think this is related.

I am from Canada, and recently moved to the USA for work. I have money in a non-registered account with Questrade in Canada, and they will not let me hold it any more since I am not a resident. I need to move ~ 30,000 CAD from Canada to the USA, probably into an Interactive Brokers account. I may keep it in CAD or switch it to USD - I haven't decided.

My question is about income tax: will the US government try to tax me on this transfer of money into the USA, as if it is some sort of income? I think that I can figure out the transfer, but I don't want to get hit with some sort of tax on $30000 of "income". I have heard that transfers over $10000 need to be reported, but that it is just for money laundering and fraud reasons, not any sort of taxation.

I am already aware that the 2022 investment gains on this money will be taxed by both Canada and the US, and that I can somehow have one of these taxes refunded to avoid being double taxed.

Thanks!

Questrade doesn't close accounts for foreign residents, unless they specifically choose not to keep business with people in the US which I find hard to believe (yes, FATCA... but the US is a huge market and there are lots of Canadians who go back and forth).

Canada will tax you on unrealised gains when you move, be aware of that. You also don't want to hold anything 'structured' that is not American (eg Canadian ETFs need to go).

Canada won't tax you once you're non resident, except withholding on dividends but you can't escape that.

No, you don't pay tax on moving your money, to answer your actual question. People move hundreds of thousands across to buy houses - that isn't a 'taxable event'.