A reader was checking recently about how to use Tangerine to buy USD and then transfer them to another bank to withdraw the US cash. It made me realize it’s been a while since I compared exchange rates offered by various banks. Now that Scotiabank owns Tangerine (formerly ING Direct) does it still offer a reasonable US dollar exchange rate or not? Here’s a comparison of some US dollar exchange rates.
Where Should I Buy My US Dollars?
Note: Exchange rates change frequently. Always check with your bank before you make a big exchange in case a better deal is out there. Also, for those with non-registered brokerage accounts and a large amount of money to exchange, consider using Norbert’s Gambit.
Here, in order of “getting the most US dollars for your Canadian dollars” are the banks and credit unions I compared.
All of these rates were posted online rates on December 26 2014. Rates change frequently. These rates are how many Canadian dollars and cents you would have to pay to buy ONE US dollar.
- Tangerine buy USD at 1.185
- Vancity buy USD at 1.1852
- National Bank buy USD at 1.1880 Includes a mysterious comment about checking the rate that your branch can offer. I’m not sure if that means it will cost more at the branch or less!
- RBC buy USD at 1.1894
- BMO buy USD at 1.1895
- Scotiabank buy USD at 1.190500
This appears to be for cheques not cash in which case the actual rate is worse than this.
- TD buy USD at 1.1930
(No wonder my TD stock keeps going up in value!)
CIBC, Meridian and PC Financial seem to need you to phone in for their rates so I didn’t include them here.
So Tangerine does still seem to be offering a good rate.
Other Factors Determining the Exchange Rate
Some banks and credit unions offer a better exchange rate for non-cash exchanges. For example, if you are “cashing” a cheque payable in USD into CAD they may offer a better exchange rate because they never have to actually handle US paper dollar bills.
The more money you have to exchange the better rate you can get. Tell them you need to convert $1 million and you will get a much better rate offered than if you have to convert $100.
If a currency is unusual and little used in Canada, the exchange rate offered will usually be quite poor. Getting or getting rid of the paper currency will be a nuisance for the bank and they will charge more for their hassle.
If you have a large amount of money to convert and have a non-registered brokerage account you may want to use a method of buying and selling a mutual fund or stock that is listed on both a Canadian and an American stock exchange to convert your cash. This procedure is commonly called Norbert’s Gambit after the person who first wrote about it as a cost-saving tool.
How do you convert your Canadian dollars to US dollars? Do you use a bank because it’s quick and convenient? or a forex service? or a brokerage? Please share your technique with a comment.