What’s the exchange rate?

November 3 2007 by Ellen Roseman

This is the question to ask when converting Canadian dollars to U.S. dollars. Don’t assume you’re getting a good exchange rate because you’re a good customer of a bank or brokerage firm. There are always fees built in, so shop around.

When I wrote about this topic in a recent column, I got many suggestions from readers about finding the best exchange rate. Check the comments below.

Several people said they had opened a U.S. dollar bank account and gotten a U.S. dollar credit card. To shop around for U.S. dollar credit cards (which aren’t offered by every bank), look at the Financial Consumer Agency of Canada’s tables.

TD Canada Trust’s U.S. dollar Visa card has the lowest annual fee at $25 (U.S.), but the interest rate is a steep 19.75 per cent. If you want a better interest rate, check out BMO Mosaik MasterCard U.S. Dollar card with Low Rate and No Fee Reward Option at 11.4 per cent. The annual fee is $35 (U.S.).


  1. FC

    Nov 3 2007

    We dealt with the US$ problem quite some time ago by opening a US$ bank account and getting a US$ denominated credit card. You still don’t get the bank to bank rate, but you only pay the handling fees when you make a bulk dollar purchase. And there are no handling and conversion fees for each purchase.

    Of course, you have to have a bit of loose cash available.

  2. Mario at Calforex

    Nov 3 2007

    I have just read your article on HOW TO GET THE BEST BANG FOR U.S. BUCKS. I have found it to be thorough and fairly accurate.

    The truth about banks posting their buy/sell exchange rates rests largely on the profit they wish to make.

    Of course, if a bank buys one (1) US dollar from a client at 90 cents, then sells it to another for 99 cents, it has just made a profit of 9 cents on that dollar. The larger the amount, the higher the profit.

    Because larger banks have huge overheads, you will almost always find a better rate in exchange offices. For example, Calforex only has a 2-cent spread on U.S. dollars (we buy today at 95 cents and sell it to our customers at 97 cents).

    Fees must also be considered, as many banks charge a fee for non-clients of their institutions, and fees also vary from one exchange house to the next.

    One thing is for sure, however. You will always get a better exchange rate by exchanging your Canadian dollars into U.S. dollars in Canada than by doing it abroad. Same applies for Euros.

    Calforex is a nationwide foreign exchange company, with retail and corporate branches in large Canadian cities.
    The Toronto branch is at 170 Bloor St. West, (416)921-2256.
    Feel free to visit our website at http://www.calforex.com and to compare rates next time before you travel. You will find we are extremely competitive and much cheaper than banks.

  3. MA

    Nov 3 2007

    I have a U.S. dollar account at TD Canada Trust. I can do a transfer online from my Canadian dollar account to the U.S. account.

    The exchange rate is very good (looks like “wholesale” rate, as opposed to the “retail” rate at the branch). The amount I buy appears in the U.S. account right away, and I can go to a branch and withdraw it in cash.

    I find this method very convenient. I can view the cost and exchange rate before doing the transfer any time during the day, and if I think my timing is good I proceed with the trade.

  4. BHM

    Nov 3 2007

    Best way to get value is to use your Canadian denominated VISA. I am now in Florida and each purchase has been given a very favourable exchange rate. (I am online, so can check each purchase as it is posted.)

    I cannot tell you how marvellous it is to see the above par rate recognized. I have US $ but am certainly not going to use them. I would advise anyone not to buy at the bank unless it is to open a US $ account and hedge the dollar by averaging currency purchases.

    Unfortunately for Canadian manufacturers and distributors, I just purchased some high end products for my home here at very favourable rates.

  5. KM

    Nov 3 2007

    I’ve bought a fair bit of US dollars in the past little while and was actually referred by my bank (CIBC) to a foreign exchange broker when I wondered why the bank’s rate was so high… in fact, the teller told me that she and other staffers use said outlet because bank rates are so high…

    Anyway, it is a small Canadian exchange brokerage called Guardian ForEx… with 2 locations in Toronto (at Yonge & Richmond, and at Dundas Square).

    Two weeks ago, when the foreign exchange inside the Eaton Centre was quoting $1.05 Cdn, I bought USD for 98.5 cents at Guardian.

    They have a website that’s updated at 10 am Monday to Friday, but they also alter their pricing with currency fluctuations throughout the day…

  6. MV

    Nov 3 2007

    Great column Ellen, but there’s one option you didn’t discuss – getting a US dollar denominated credit card from a Canadian issuer.

    There simply is no exchange rate on the card since you need to pay it in US dollars.

    You do need to convert Canadian dollars into US at payment time (unless you already have a US dollar account balance with sufficient funds), but at my bank (Bank of Montreal) you can do that electronically with about a 1-cent spread on the rate instead of the much larger cash spread.

  7. Charles in Vancouver

    Nov 4 2007

    As a Canadian who lives in Canada, but is employed by a US company paying in US dollars, I’m in the position of wanting to convert them to Canadian at the best rate I can get. I also want to leave some of them unconverted in order to make direct USD purchases online and when travelling in the US.

    The best no-fee option I found was to cross the border and open a banking account. I’ll be using it for direct deposit from my employer.

    The Bank of America in Blaine, WA offers a no-fee chequing account to Canadians (or rather, there’s a $5.95 fee that they waived for me for the next *five years*). They won’t issue a credit card, but the debit card can double on the VISA network – meaning I can order US goods online from my US dollar balance as if it was a VISA.

    Reportedly, other border-adjacent branches are making similar offers to Canadians. You bring in your proper ID to the branch and they set up a null SSN for you.

    The caveat is how to transfer money. While in the US, I can deposit anything in a BoA machine and withdraw. While in Canada my options are:

    USD-USD: Draw cheques on my BoA account to deposit into my RBC or ING US$ accounts; There’s no easy way to push USD into the BoA account without conversion or crossing the border.

    USD-CAD: Use XETrade/Custom House (same system, different interfaces) to make electronic transfers in and out of any of my CAD or USD accounts on either side of the border with a 1.1-cent exchange spread.

    Paypal: USD received in Paypal can be pushed out to BoA, and to my RBC USD account in Canada. Paypal can take USD from my BoA account but not from RBC without conversion.

  8. Bylo

    Nov 4 2007

    In general, you’ll get a better exchange rate using a bank discount brokerage than at their retail bank branches, typically 1% or 1.5% compared to 2.5% or more. If you have both a US$ savings account and brokerage account with the same institution then you can convert currency online, transfer it to the savings account and then make cash withdrawals at any bank branch.

    Using your CA$ credit card for purchases in the US isn’t always such a bad thing (assuming you pay off the balance every month!) While the card companies charge ~2.5% keep in mind that that’s only 1% to 1.5% more than the lowest-cost retail FX. So the convenience (and buyer security, etc.) of using plastic for relatively small purchases may be worth the extra $1.50 on a $100 purchase or $15 on a $1,000 purchase.

    For large conversions — at least $10k — it’s possible to do FX for a small fraction of 1%. For details see Can$ to US$ or vice versa

  9. brad

    Nov 4 2007

    I’m in a somewhat similar position to Charles in Vancouver: I’m a dual US-Canadian citizen who lives in Canada after spending most of my life in the US. I work for a US-based company but we have an office in Toronto so I’m paid through them in Canadian dollars. I kept my US bank account and credit card when I moved here, but I do find that keeping my US bank account replenished is expensive because I get a poor exchange rate and high fees whenever I send the US bank a deposit from my Canadian account (in Canadian dollars). It might make more sense for me to open a US dollar account here at my Canadian bank, transfer the money between my Canadian and US dollar accounts here, and then deposit cheques in US dollars to my account in the US.

  10. Charles in Vancouver

    Nov 5 2007

    To Brad: Your situation sounds like it would be perfect for XETrade / Custom House… the exchange rate from your Canadian pay to your US account would be better than a wire transfer and EFT is much cheaper too.

  11. brad

    Nov 6 2007

    @Charles — thanks for the advice. I looked into XETrade a few years ago but never followed up. I keep most of my money here in Canadian dollars, but like to keep a small balance in my US bank account to write cheques or use for ATM withdrawals for purchases when I’m traveling in the US.

  12. Charles in Vancouver

    Nov 7 2007

    Brad – You’re welcome! A caveat though – it turns out (now that I have signed up), XETrade tiers its exchange-rate spread depending on how much they expect you to trade. So if you look at the demo site the spread looks like about 1.1 cents… on my new account it’s more like 3 cents.

  13. Jim

    Dec 9 2007

    I’ve been using Bank of America to do payments to Europe for years and switched to Transfermate.com a few months ago. They seem to offer faster payments and were the cheapest solution i found by a mile.

  14. cindy

    Dec 27 2007

    Would you tell me the exchange rate between Canadian dollor and RMB yuan today?

  15. Richard Banks

    Feb 10 2008

    My daughter will be going to Universlty in New York City next year. Should she open an account at a U.S. bank or use a Canadian bank with a U.S. account? Are there any U.S. banks that you would recommend?
    Thank you,

  16. jes

    Feb 26 2008

    Hi – I’m American, just moved to Ontario. I have a BoA account in the US, opened an account at ScotiaBank because they have an agreement with BoA – I can use my BoA debit card there to withdraw funds (in CAD) without fees. I don’t know if the reverse is true. But I too am trying to find the best way to transfer CAD to my BoA account in the US…

  17. AMY

    Apr 7 2008

    I need to spend about $4,000 in US dollars tomorrow. I am planning to use my credit card since I won’t have the time to do the exchange in Canada (I might be able to do it in the States though).

    Anybody knows about the exchange rate with credit cards? What’s my best option?


  18. Mohammad Rahman

    Aug 1 2008

    I have a demand draft of Singapore Dollars. Do I have to cash it in a bank where I have an account or I can cash it in some other places where I can get a better rate.

  19. SJC

    May 29 2009

    Opening a US bank account seems to provide welcome flexibility. However, when I looked into this it appeared that because of heightened security you must be able to demonstrate a US presence and a US source of income to do this. Has this changed?

  20. Boots

    Nov 2 2009

    I have 150,000 Cad to convert to US funds and am leaving Canada what would be the safest and easiest way to convert the funds? Leaving BC Canada to California for good.

  21. Jane

    Dec 5 2009

    I would just like to purchase a couple thousand USD for my trip to central America. Is there any way to do this with out incurring all the fees? A one percent fee seems reasonable.

  22. PN

    Mar 13 2010

    Hello Friends, it’s really URGENT.

    I am in Toronto. I need a fairly big amount of demand draft of US$ to pay the tuition fees. The fees are to be paid in US$ and in draft only. I am looking for a best competitive conversion rate from CND$ to US$ and the best way to get this draft.

    Thanks for your advice and guidelines. As this is urgent, I will appreciate your reply on this forum and and an email on a.bhaskar at ymail dot com.

  23. Janice

    Jul 7 2011

    I would highly recommend http://www.knightsbridgefx.com to anyone that needs to convert a large amount of currency.

    These people were really helpful to me when I was buying a US property and I found they were the best way to convert Canadian dollars into US dollars. Don’t even think about the banks.

  24. Alex

    Oct 1 2011

    USD keeps rising and that cost me money as I needed to buy USD but I waited too long, but I saved a chunk going with http://www.knightsbridgefx.com, they beat my banks exchange rate from TD waterhouse by a lot.