Currency Exchange

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bill
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Currency Exchange

Post by bill »

I'm looking for a low fee way to change US$ to Cdn$. I'm receive part of my salary in stock shares, and wind up with around $8000 a couple times per year. Previously I used accurate (Ottawa) and got a rate about 0.5% off the posted rate. Then, 5 years back CIBC set me up to match that rate, calling the trading floor every time. Anyways, last time I did this it was a big hassle, they didn't want to offer me that rate. In the end they did, but now I'm looking for a new option. I'd prefer to avoid Norbert-ing, it just sounds like a hassle to me & maybe not worth it for this amount. OTOH, I'm expecting a one-time payment of $40KUS in Dec, so also need to figure out how to change that. I was ok paying 0.5%, to save hassle, but now CIBC seems unwilling.

I've looked at Knightsbridge, they seem to be around 0.75%, but I'm wondering if there's a better option. Any suggestiong?
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Re: Currency Exchange

Post by pmj »

I also used to use Accu-Rate, and "in the day" it had the best rates for occasional transfers, vacation cash, etc.
I now use TransferWise for monthly payments from the UK to Canada, at a fee of about 0.5% if the amount is more than £400 (they've just changed the fees, so maybe less than that). It's a straightforward process. Haven't used it with any US accounts.
Alternatively, can you get a US-based US$ CC with 0% FX fees, use it in Canada, and pay the bills from a US-based account?
For a large sum you should be able to do better than 0.5% - I'd contact a couple of brokers.
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Re: Currency Exchange

Post by bill »

For a CC, even when they claim no fee don't they typically have a 1.5-2% spread on the exchange rates? Yes, back in the day accu-rate was very good, and I think the reason CIBC has likely become less friendly is the demise of accu-rate. Last time I went into CIBC, the guy on the trading floor offered 1%, and hung up on the branch when they tried to discuss further, the branch essentially covered the difference since I was clearly pissed off.
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Re: Currency Exchange

Post by pmj »

bill wrote: 29 Nov 2017 09:49 For a CC, even when they claim no fee don't they typically have a 1.5-2% spread on the exchange rates?
I can't speak for US-based CCs, but in respect of Canadian 0-fee cards, Amazon charges a 0% fee on the neutral exchange rate (there's probably a proper term for that) for both purchases and cash withdrawals; and Rogers/Fido both apply the regular 2.5% fee to the neutral rate, but give 4% cash back on foreign currency purchases (but not cash withdrawals).
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Re: Currency Exchange

Post by gsp_ »

Just because a bank doesn’t charge its own (typically 2.5%) currency exchange surcharge doesn’t mean the conversion is completely free. Visa and MC have their own buy/sell spreads based on currency pairs which we’ve discussed here before. It is typically under 1%, sometimes way under. Haven’t checked in a while and IIRC MC was cheaper than Visa.
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Re: Currency Exchange

Post by fireseeker »

bill wrote: 29 Nov 2017 08:38 I'd prefer to avoid Norbert-ing, it just sounds like a hassle to me & maybe not worth it for this amount.
I'm curious about this comment. Do you have an online brokerage account? If so, I suggest you experiment with this to see how it works.
I use BMOIL, which permits Noberting with two simple back-to-back trades. No phone calls necessary, no formal request to "journal" necessary.
Not all brokerages are set up this way, but for those that are Norberting can be a sweet currency-swapping deal for $19.90.
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Re: Currency Exchange

Post by bill »

fireseeker wrote: 02 Dec 2017 20:18 I'm curious about this comment. Do you have an online brokerage account? If so, I suggest you experiment with this to see how it works.
I use BMOIL, which permits Noberting with two simple back-to-back trades. No phone calls necessary, no formal request to "journal" necessary.
Not all brokerages are set up this way, but for those that are Norberting can be a sweet currency-swapping deal for $19.90.
Yes, I have accounts with CIBC investors edge. so I pay $6.95/trade. Since my typical transaction is around $8-10k, the 0.5 points off posted rate that I've paid has been worth it - essentially the exchange is done at the same time I'm in the branch depositing the cheque. The only hassles have been that I need to do this while the Toronto trading floor is open and it takes a few mins for them to call and lock in the rate.

You make a good point though. Instead of assuming it's a hassle, I should walk through the procedure at Inv Edge.
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Re: Currency Exchange

Post by adrian2 »

pmj wrote: 29 Nov 2017 09:00 I now use TransferWise for monthly payments from the UK to Canada, at a fee of about 0.5% if the amount is more than £400 (they've just changed the fees, so maybe less than that). It's a straightforward process.
What's the format for the Canadian bank information in order to receive money via Transferwise from overseas into Canada?
Say to receive into a CAD Simplii or Tangerine account, do they use IBAN / Swift code?
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Re: Currency Exchange

Post by pmj »

adrian2 wrote: 18 Feb 2018 22:38
pmj wrote: 29 Nov 2017 09:00 I now use TransferWise for monthly payments from the UK to Canada, at a fee of about 0.5% if the amount is more than £400 (they've just changed the fees, so maybe less than that). It's a straightforward process.
What's the format for the Canadian bank information in order to receive money via Transferwise from overseas into Canada?
Say to receive into a CAD Simplii or Tangerine account, do they use IBAN / Swift code?
Adrian2 - It's a few years since we set this up, and I don't exactly remember the process. ISTR it was described as "you receive a transfer from TransferWise's Canadian account". This is the data on record - in standard Canadian banking format:

Recipient Type: PRIVATE
Institution No.: 004
Transit and Account No.: ##### - ########
Account Type: Checking

My UK account is similarly set-up in UK format:

UK Sort code: ##-##-##
Account number: #######
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Re: Currency Exchange

Post by adrian2 »

pmj wrote: 19 Feb 2018 08:30
adrian2 wrote: 18 Feb 2018 22:38 What's the format for the Canadian bank information in order to receive money via Transferwise from overseas into Canada?
Say to receive into a CAD Simplii or Tangerine account, do they use IBAN / Swift code?
Adrian2 - It's a few years since we set this up, and I don't exactly remember the process. ISTR it was described as "you receive a transfer from TransferWise's Canadian account". This is the data on record - in standard Canadian banking format:

Recipient Type: PRIVATE
Institution No.: 004
Transit and Account No.: ##### - ########
Account Type: Checking

My UK account is similarly set-up in UK format:

UK Sort code: ##-##-##
Account number: #######
Thanks. Their introductory video and FAQ refer to an IBAN number, which I'm unable to find for Simplii / Tangerine. IBAN seems to be a mostly European standard.

The plan is to use it for transfers from Australia to Canada, the only fee is AU$7.50 for amounts up to about $10k (using AU debit card to fund it).
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Re: Currency Exchange

Post by Koogie »

Has anyone used Transferwise to do a payment to themselves domestically ?

ie: do a USD>CAD exchange by sending USD from your US account to your CAD account at the same bank ?

Just looking to using that as a mechanism for doing exchange for my small business.
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Re: Currency Exchange

Post by nomad »

https://www.theglobeandmail.com/investi ... s-dollars/

Came across this G&M article this morning that may be of interest...
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Re: Currency Exchange

Post by Koogie »

nomad wrote: 24 Oct 2018 10:42 https://www.theglobeandmail.com/investi ... s-dollars/
Came across this G&M article this morning that may be of interest...
Ha.. thanks. Now that is timing.

I think Knightsbridge might be better for what I have in mind. I've sent emails off to both.

:thumbsup:
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Re: Currency Exchange

Post by mewmew »

fireseeker wrote: 02 Dec 2017 20:18
bill wrote: 29 Nov 2017 08:38 I'd prefer to avoid Norbert-ing, it just sounds like a hassle to me & maybe not worth it for this amount.
I'm curious about this comment. Do you have an online brokerage account? If so, I suggest you experiment with this to see how it works.
I use BMOIL, which permits Noberting with two simple back-to-back trades. No phone calls necessary, no formal request to "journal" necessary.
Not all brokerages are set up this way, but for those that are Norberting can be a sweet currency-swapping deal for $19.90.
Can you do it with DLR and DLR.U or must you choose stocks that trade in both TSE and NYSE (e.g. TD, RY, BMO)?
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Re: Currency Exchange

Post by fireseeker »

mewmew wrote: 13 Jan 2019 12:28 Can you do it with DLR and DLR.U or must you choose stocks that trade in both TSE and NYSE (e.g. TD, RY, BMO)?
I haven't used DLR, so I can't offer an accurate answer. I don't see why you couldn't use it.
That said, using a high-value stock like RY or CNR should be cheaper. You will probably lose the bid-ask spread on the trade, which ideally will be one cent each way. It's better to lose a cent per share on a smaller number of shares. RY is about $72US and CNR is about $108 US. You would need 8-10 times as much DLR.
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Re: Currency Exchange

Post by Peculiar_Investor »

I found this in one of my Feedly feeds, The mistake that led to a £1.2bn business - How two Estonia friends built popular money transfer business TransferWise.
BBC News wrote:When Kristo Kaarmann was kicking himself for being "incredibly stupid", little did he know that it would spark an idea for a business that is now estimated to be worth more than £1.2bn.

Back in 2008, the then 28-year-old Estonian was working in London as a management consultant when he got a very chunky Christmas bonus of £10,000.

As interest rates were higher back in Estonia, he decided that he'd transfer the money from his UK current account to his Estonian savings account, so as to earn more from the cash.

"So I paid my UK bank a £15 fee, and transferred the £10,000, and then a week later I saw that £500 less than I had expected had arrived in the Estonian account," says Kristo, now 38.

"I started digging to find out what had happened, and I realised that I had been incredibly stupid.

"I had foolishly expected that my UK bank would have given me the exchange rate I saw when I looked on [news wires] Reuters and Bloomberg.

"Instead the bank had used an exchange rate 5% less favourable, which is how it and all the other banks get their cut... It was my mistake."

Annoyed with himself, Kristo vowed to come up with a way of transferring money overseas that removed banks from the process.
Sound familiar?
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Re: Currency Exchange

Post by big easy »

What are people using to get Euros from an ATM while travelling these days? Wise card? PayPal Debit Card? No FX fee credit card with a credit balance? Or do you just bring Euros with you from the bank/local currency exchange? The Wise Card seems to have a lot of fees. Bank debit cards are 3%, currency exchanges don't have great rates...
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Re: Currency Exchange

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big easy wrote: 19 Jan 2023 20:36 What are people using to get Euros from an ATM while travelling these days? Wise card? PayPal Debit Card? No FX fee credit card with a credit balance? Or do you just bring Euros with you from the bank/local currency exchange? The Wise Card seems to have a lot of fees. Bank debit cards are 3%, currency exchanges don't have great rates...
We use HT preferred Visa (no FX fee, no annual fee, and 1% cash back) for travel everywhere except the US (we have $US, and use TD $US Visa there). We do carry a small amount of cash (~$1000 Euros or less for a 5 to 6 weeks trip) for purchases at farm markets, small vendors, and short rental where the host requires cash.
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Re: Currency Exchange

Post by Bylo Selhi »

big easy wrote: 19 Jan 2023 20:36 What are people using to get Euros from an ATM while travelling these days? Wise card? PayPal Debit Card? No FX fee credit card with a credit balance? Or do you just bring Euros with you from the bank/local currency exchange? The Wise Card seems to have a lot of fees. Bank debit cards are 3%, currency exchanges don't have great rates...
Wise, Wealthsimple and now EQ all have prepaid CCs that don't charge the usual 2.5% FX vig. WS even pays 1% cash back and EQ 0.5% cashback.

I use these (well so far only the first two) to get cash out of ATMs and for small payments in lieu of cash. Some of these cards have rather small monthly maximums and other restrictions. And they don't always work. That's why I carry two (with the third on order) as backup. The first two also work with Google Pay (and I imagine Apple Pay) making them very convenient for those with smartphones.
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Re: Currency Exchange

Post by Bylo Selhi »

freedom_2008 wrote: 19 Jan 2023 21:06We use HT preferred Visa (no FX fee, no annual fee, and 1% cash back) for travel everywhere except the US (we have $US, and use TD $US Visa there). We do carry a small amount of cash (~$1000 Euros or less for a 5 to 6 weeks trip) for purchases at farm markets, small vendors, and short rental where the host requires cash.
HTV eliminated the 1% cashback on FX transactions. Brim is now the card of choice for FX with 1% cash back on everything and 2% on everything Amazon. Again I carry both as backup.

It's not a good idea to use a conventional credit card like HTV or Brim for both purchases and cash withdrawals at ATMs. This is in order to avoid the cash advance fees imposed by CCs when there's a balance (money owed) on the card. Better to use CCs for purchases and prepaid cards for cash so as to skirt this gotchya.
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Re: Currency Exchange

Post by pmj »

freedom_2008 wrote: 19 Jan 2023 21:06 We use HT preferred Visa (no FX fee, no annual fee, and 1% cash back) for travel everywhere except the US ...
HT Preferred VISA only gives cashback on C$ purchases. It was "downgraded" a couple years back.
BRIM MC gives 1% cashback on all purchases.
I use BRIM for purchases, and HT for cash from ATMs - and I pay it off immediately online, or maybe in advance, to eliminate interest charges.
Wise is good if you can load it cheaply with foreign currency. And because it's a debit card, you can use it to make direct payments to someone's foreign currency chequing account.
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Re: Currency Exchange

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Bylo Selhi wrote: 19 Jan 2023 21:43 HTV eliminated the 1% cashback on FX transactions. Brim is now the card of choice for FX with 1% cash back on everything and 2% on everything Amazon. Again I carry both as backup.
Overlapped :oops:
I think BRIM's 2% at Amazon is only at Amazon.ca?
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Re: Currency Exchange

Post by pmj »

Duplicate post.
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Re: Currency Exchange

Post by Bylo Selhi »

pmj wrote: 19 Jan 2023 21:47 I think BRIM's 2% at Amazon is only at Amazon.ca?
Amazon worldwide. Also Amazon's subsidiaries like AWS. I haven't tried with Whole Foods.
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Re: Currency Exchange

Post by freedom_2008 »

Thanks Bylo Selhi and Peter for info on HTV and BRIM. We hadn't travelled for 3 years (until last Sept), and didn't notice the disappearance of reward on HTV FX (haven't paid much attention nor validated the reward cash :oops:).

We haven't used ATM for cash, just FX some when the rate is good and keep them at home for travel.
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