Avoid CAD to USD Ripoffs

You can lose a lot of money converting Canadian dollars (CAD) to US dollars (USD).  This is not a big deal when you are converting $200 so you can buy that camouflage recliner at the Walmart in Buffalo.  It can be thousands of dollars if you are sending $20,000 to a relative or $200,000 on that retirement condo in Fort Lauderdale.

If you go to a Canadian bank and ask to change CAD to USD, you will get their standard rate.

Today June 5, 2017, the Standard Over the Counter Rate at the Royal Bank is $1.3791 USD per CAD.  Most banks are very close to this rate.

But, if you convert your money using their online brokerage, RBC Direct Investing, you will pay $1.3349 to get a USD, a savings of 3.2%.  On that $200,000 USD Florida condo, that is $6,410 CAD (real money).  You have to move money from your bank to the brokerage and back, but this can be done online in about 15 minutes.  Most bank-affiliated brokers have this service.

But what if you don't have a brokerage account or don't want to open one?  You could use an online money converter like XE.com.  If you wanted to get $200,000 USD today, their rate would be $1.3669, which is 0.88% better, or $1,770 CAD.  Not as good, but it is still good money you want to keep in your pocket.  There are other online services you can investigate like knightsbridgefx.com.

So if you are moving a lot of money to or from USD, I recommend you investigate alternatives to the simple and convenient method of going to the bank.  Oh, and avoid buying that hideous recliner, your wife will thank you.

Disclaimer: this is not professional financial advice and should be used at your own risk. The author is not a licensed financial advisor. You should not believe everything on the Internet including this blog and should check multiple sources possibly including a professional financial advisor before making decisions.