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Cheap currency conversion USD to CAD


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I am still logistically trying to figure out how to cheaply convert USD to CAD for a Canadian equity purchase. The problem is the currency spread. My bank has a 4-5% currency spread, Fidelity has a 3% currency spread, CIBC in Canada charges 2.5% plus a 3.5% spread. These fees are hefty!


I notice there are currency brokers such a USforex.com and Oanda.com that facilitate conversion and transfer with smaller spreads (1%).


Has anyone used these? Are they trustworthy?


Appreciate any input.


- Mike

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The best thing to do is to make the conversion yourself with a stock listed both in Us and Cad $.  For example you can take BB/BBRY.


Exemple:  If you want to convert can$ in US$, in your US$ account  you short 1000 shares of BBRY at 11.04$ in US$. In your can$ account you buy 1000 shares of BB at 12.12$ in Can$.  So you will have 11 040 US$ in your us$ account and -1000 shares.  In your can$ account you will have 1000 shares of BB and  -12 120 can$.  All you have to do is call your broker to tell him to move you BB shares in your us account, so your short will be cover and the results is a conversion of cash at very low price.  Usually when i do this, my convesion fee will be around 0,25% plus 2 commissions (2*6.95$) instead of 2 or 3 % at  bank.


In my exemple the trade is at 91.09US$ for 1Can$.  The $can quate now at 91.28us$, so you pay 0.19¢ or .21%.

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I'd suggest opening an Interactive Brokers account. Spreads are around 0.001% for the most liquid pairs. You can also trade / hold Canadian equities there very cheaply.






As a Canadian, I also have a TD Waterhouse for my RRSP and TFSA.  Norbert's Gambit works for that.  But clearly Interactive Brokers has ridiculously low currency conversion costs.

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