Cheap Canadian Dollar - Time to Exchange Currency?

[jrd687]

Hello All,

I'm an American Expat and I've been living and working in Canada for over 3 years. I married a Canadian citizen and were are leaning towards settling in Canada rather than the US (perfectly Ok with this). I have always maintained US Payroll (i.e. payed in USD to a US bank account) except for a very small amount (a few hundred a month) in a Canadian checking account. I have saved enough money for a sizable down payment on a house which we considering to buy within the next year or two. My wife also has a decent savings in CAD.

Since my $$ is in USD, I closely watch the exchange rate and at the moment it is ~ 1.25 CAD to 1 USD. This has worked out great for me as most of my purchases are on a US credit card with no forex fee. I'm wondering about transferring the bulk of my cash to CAD in preparation for buying a house. I expect the CAD to recover at some point so I think there are some gains to be made. Also I feel like it would help us get a mortgage.

I have a few questions and I'm open to advice.

1) What are the ballpark taxes and fees associated with transferring a large sum of USD (~$100K) into CAD? Do Canadian US currency bank accounts like TD provide any shelter to fees?
2) Can anyone shed light on the best exchange method?
3) Are there US tax implications if I keep that much $$ across the border? I know i have to report to US Gov't if I have any financial asset over $10k.
4) An alternative might be to work with a US bank to obtain a mortgage for a property in Canada? Is this possible?

I feel that my wife an my situation is somewhat complicated and I'm considering hiring a financial planner with cross-border tax & investment services but I have no clue where to start. Any insight would be greatly appreciated.

Thanks.

Jay

 

[singh84a]

If you have a TD Canada account, I would say open up a TD US account (its mostly on the east coast). Sign up for TD Cross border banking. That is what I do.

Perks

1. On TD Canadian account - open up a TD US dollar account - i think 3 dollar a month fee. you get preferred exchange rate on this.. like 1-2 cents extra
2. Sign up for TD Cross border banking - they will link ur TD US and Canada account
3. You can transfer upto 100K daily with no fees and immidiate transfer,
4. No Taxes paid, I din't pay any taxes, its a transfer between TD Us and Canada, I do it over the phone all the time.

google TD Cross border banking

 

[craiglem]

I have not personally tried this, but you might look into "Norbert's Gambit". This is a method of transferring money using the stock market where you buy in one currency and sell in another. Supposedly it is basically free versus the 2% that TD will take.

I'd post a link but the forum won't let me. There are a couple videos floating around out there, one of which shows how to use Questrade to do this.

If you do try it, please let us know how it works...I will be in a similar situation in a few months when we make the move north.

 

[chimney007]

Get in touch with me if you are in the Toronto Area - for somebody who can advise on US and Canadian taxes... I do have a recommendation.