Tag Archives: Tangerine

Comparing Canadian to US Dollar Cash Exchange Rate Options

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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.

  1. Tangerine buy USD at 1.185
    http://www.tangerine.ca/en/rates/index.html
  2. Vancity buy USD at 1.1852
    https://www.vancity.com/Rates/ForeignExchange/
  3. 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!
    https://www.nbc.ca/en/rates-and-analysis/interest-rates-and-returns/exchange-rates.html
  4. RBC buy USD at 1.1894
    http://www.rbcroyalbank.com/cgi-bin/travel/currency-converter.pl?tabset=table&ProspectID=FBD04E151BAD443DA6FE69802DC489DC
  5. BMO buy USD at 1.1895
    http://www.bmo.com/home/personal/banking/rates/foreign-exchange
  6. Scotiabank buy USD at 1.190500
    This appears to be for cheques not cash in which case the actual rate is worse than this.
    http://www.scotiabank.com/ca/en/0,,1118,00.html
  7. TD buy USD at 1.1930
    (No wonder my TD stock keeps going up in value!)
    http://www.tdcanadatrust.com/customer-service/todays-rates/rates.jsp

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.

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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.

It’s Official: Tangerine is Charging a Fee to Transfer your RRSP or TFSA to Another Bank

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Although I have yet to receive a notice from Tangerine either by email or by the message system they use within your bank account online, it appears to be official that Tangerine will be charging a $45 fee to transfer out your RRSP or TFSA balance.

UPDATE: I received a email notice inside my Tangerine account messages section on December 20 that advised that as of January 19 2015 I would have to pay a $45 fee to transfer out a RRSP or TFSA.

I updated my website with warnings when the rumour of this fee first appeared back in mid-October 2014. To date, I still have received no information directly from Tangerine about this new fee.

Tangerine Will Charge a $45 Fee to Transfer Out a RRSP

In the Frequently Asked Questions on the Tangerine site, it says they charge $45 to transfer out a RRSP.  It does not say when this new fee is applicable! I was told on the phone that it would be in January 2015 but that is not clear here.

Will Tangerine Charge a Fee to Transfer Out a TFSA?

At this point, Tangerine has not yet said anything about a TFSA transfer out fee on their website. Nor have I received any notice by mail, email or message.

For a TFSA, one way to avoid a fee is to wait till December. Instead of transferring your funds, withdraw them. Then on January 1 of the next year and NOT BEFORE you can contribute them into your TFSA at another institution. If you deposit them in the same year you withdraw them you will be fined 1% a month by the CRA. You MUST wait till January 1 of the next year.

Will Tangerine Now Refund a Fee Charged by Another Bank for Transferring a TFSA or RRSP into Tangerine?

In the past, I moved a cash RRSP into Tangerine (when it was called ING Direct.) I asked if they would pay me back the fee that the other bank charged me for moving out my RRSP. They replied that because they did not charge a fee for transferring a RRSP away from Tangerine, they also would not pay a refund for a fee charged for transferring a RRSP in to Tangerine.

So has that now changed? Will they pay up to $45 to cover the fee paid to transfer a RRSP from another bank into Tangerine?

I’ve sent that question to Tangerine and will update this article when they reply.

UPDATE: Ok the reply so far is not encouraging. I emailed to inquire and was told that because I have an account with Tangerine I have to phone them to discuss this. That suggests they don’t have a formal policy yet although if you are interested in transferring in, I would suggest you call and see if they will reimburse your fee.

The worrying part was they also said that owners of registered products had been notified of the “transfer out” change via the messaging system within their account. I have several registered products and have not received any type of notice!

I’ll provide additional updates if/when I can get them.

Can Tangerine Start Charging a Transfer Out Fee Without Any Formal Notice to Customers?

Usually banks warn you a few weeks or months ahead of time when they are changing their fees.

So far I have not received any notice from Tangerine about this new fee. I have not received a letter, an email, a message when I sign in to my accounts, a message on the message system inside my account, or even a few words written in my October banking statements about it.

Do they have to give notice of this fee?

That’s hard to find out! In the USA, they clearly do. The US Government Consumer Financial Protection Bureau website says “a bank or credit union can start charging you fees…[if they notify] you in writing at least 30 days before it starts charging fees….”

I wrote the Canadian Bankers Association, CBA, on November 18, 2014 to ask if there is any required notice for new fees. Unfortunately, they chose to respond that I should direct my question to the federal government’s Financial Consumer Agency.

The (federal) Department of Finance Canada appears to be working on a new Financial Consumer Protection framework, judging by a consultation paper from December 2013 posted online. It’s not clear to me whether this is one of the issues that may be included.

I will update this article if I get any further information about requirements from the Financial Consumer Agency.

UPDATE 1: They have replied that I should expect to wait 10 business days for a reply.

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Have you recently been zinged with a new or an increased banking fee? Did they warn you in advance or was it a total shock? Please share your experiences with a comment.