Foreign Currency Account [US resident wants bank account in Canada]

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Topic Author
stefan3iii
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Joined: Mon Jul 24, 2017 10:52 am

Foreign Currency Account [US resident wants bank account in Canada]

Post by stefan3iii »

Hello, my situation seems a little rare and am having trouble googling any good information. I need to receive money from a home sale in Canada, in CAD, but I live in the US. I don't want to convert the money to USD, at least not immediately, because banks don't give good conversion rates. Instead I intend to use Norbert's Gambit to do the conversion later.

The issue then is that I need a banking account in CAD, as a US resident. One option I've found is East West Bank:
https://www.eastwestbank.com/Views/Page ... nts.cshtml

My question then is, does anyone have experience or advice on this? Can I safely deposit a lot of CAD in such an account, and later wire it out to a family member's personal account in a Canadian bank, or my own investment account in Canada? I'm just worried about gotchas, or some hidden fees or something. Is East West Bank a reasonable option or can anyone recommend someone else?
langleybc
Posts: 52
Joined: Thu Mar 16, 2017 6:40 pm

Re: Foreign Currency Account [US resident wants bank account in Canada]

Post by langleybc »

Stick with the big 5 banks in Canada. You can open an account using your passport. Depending on where you are, you can choose the Canadian bank which has branches in your state.
MrsBDG
Posts: 371
Joined: Thu Apr 13, 2017 4:04 pm

Re: Foreign Currency Account [US resident wants bank account in Canada]

Post by MrsBDG »

In my experience, Canadian banks require a Canadian address to open the account, check on that.
Topic Author
stefan3iii
Posts: 6
Joined: Mon Jul 24, 2017 10:52 am

Re: Foreign Currency Account [US resident wants bank account in Canada]

Post by stefan3iii »

I've already tried opening a Canadian bank account, the issue is that I need to be physically present at a branch in Canada. I talked to 4 different banks and they all said this.

If I HAVE to I could fly to Canada just to do this, I am a Canadian citizen. It would still save me money in the long run, but obviously if I can just do it with a US based foreign currency account that is much simpler and cheaper.
student
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Re: Foreign Currency Account [US resident wants bank account in Canada]

Post by student »

Have you talked to the cross border banking department at TD Bank?

http://www.tdbank.com/tdhelps/default.a ... /43309822/
Valuethinker
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Joined: Fri May 11, 2007 11:07 am

Re: Foreign Currency Account [US resident wants bank account in Canada]

Post by Valuethinker »

stefan3iii wrote:I've already tried opening a Canadian bank account, the issue is that I need to be physically present at a branch in Canada. I talked to 4 different banks and they all said this.

If I HAVE to I could fly to Canada just to do this, I am a Canadian citizen. It would still save me money in the long run, but obviously if I can just do it with a US based foreign currency account that is much simpler and cheaper.
Look. If the Canadian banking system hits the wall with a housing crash (and the latter I view as essentially when, not if, there will be a housing crash) then the Big 5 will be propped up by the government-- have to be.

But make sure you are within the Canadian deposit insurance limits (is that CDIC? I don't remember any more).

http://www.cdic.ca/en/about-di/what-we- ... fault.aspx $100k - don't get stuck into an account that is not covered!

And I would keep my money in the big 5. Yes, with a house sale, that means more than just one bank (it might mean all 5).

Seriously. Fly there and do this. Really, seriously. This is too much money to risk. Unless you can find some other way of doing it. Otherwise get a discount Canadian brokerage account (like TD) and stick it in Federal Government bonds (earning nearly 0%) or Federal Government T Bills (which really do earn basically 0%). In that latter situation don't go for provincial government bonds or t bills.

I am as sure as I can be that Canada is heading for a housing crash-- Toronto and Vancouver anyways-- cannot speak to the housing situation in other cities, but those 2 together (GVA and GTA) are more than half the value of all homes in Canada, I am sure. The CMHC will take the pain first, but the banks will not escape. Housing prices will fall somewhere between 20 and 50 per cent in those 2 cities-- my guess is at least 35-40 per cent-- condos will be hit the worst, single family homes in good 'hoods the least. CIBC is the worst exposed, but they will all take a hit.

Home Capital Group is a canary in the coal mine, just as Northern Rock was here (UK). But it's just the beginning. Note that the Canadian dollar could go to 50 cents US as this blows. When? I don't know-- I thought the Toronto Condo market would blow 5 years ago. But I think it has started. I think May was the absolute peak of the Toronto market.

I am just some guy on the internets. But I've read Hilliard Macbeth's book (he's also widely quoted in Macleans) and when I was in Toronto in 1989 it was just starting a housing crash that took *22* years (adjusted for inflation) for houses to regain their old peaks. I remember this and I remember how this goes.
Topic Author
stefan3iii
Posts: 6
Joined: Mon Jul 24, 2017 10:52 am

Re: Foreign Currency Account [US resident wants bank account in Canada]

Post by stefan3iii »

To followup, in case anyone is curious.

I did call cross border banking at TD, spoke with both the US and Canadian sides, and nope can't open a CAD account without physically being present in Canada.

I talked to East West bank, and sounds legit, they offer accounts in CAD if you have regular USD account with them. I do have to be present to open an account with them as well, but at least it's only a 3 hour drive, saving me a lot of money.

To address the previous post's concerns about CA banking risk, I don't intend to hold the money for any period of time. It's basically going to be there for a couple of weeks before I can wire it back out, if even that.
Valuethinker
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Re: Foreign Currency Account [US resident wants bank account in Canada]

Post by Valuethinker »

stefan3iii wrote:To followup, in case anyone is curious.

I did call cross border banking at TD, spoke with both the US and Canadian sides, and nope can't open a CAD account without physically being present in Canada.

I talked to East West bank, and sounds legit, they offer accounts in CAD if you have regular USD account with them. I do have to be present to open an account with them as well, but at least it's only a 3 hour drive, saving me a lot of money.

To address the previous post's concerns about CA banking risk, I don't intend to hold the money for any period of time. It's basically going to be there for a couple of weeks before I can wire it back out, if even that.
It doesn't matter so much, then.

2008 shook me though. Someone I respected at one of the big 5 said "we didn't know if we'd still be around by Christmas". I concluded that I only wanted to keep money in CDIC insured accounts, within CDIC limits. Things happened so fast.

Do you have a feel for the financial stability of East West Bank? I have never heard of them (have been out of Canada for more than 2 decades, though). There is the Financial Wisdom Forum, which is the Canadian equivalent of this forum, and you could check there?

http://www.financialwisdomforum.org/forum/ full of good and helpful people (Canadians, eh? ;-))

You can't use your old Canadian bank account?
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Bylo Selhi
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Re: Foreign Currency Account [US resident wants bank account in Canada]

Post by Bylo Selhi »

Have you tried HSBC (Open an International Banking Account)? I don't know that they will let you open a Canadian account from the US but it's worth a phone call or two to ask. Keep in mind that most, if not all, Canadian banks require that you're a permanent resident. They usually request proof of this. These requirements are the result of international efforts to thwart money-laundering, tax evasion and/or terrorism.

Another strategy if you have relatives or trusted friends in Canada is to have them receive the house proceeds in Canada on your behalf, then wire it to a CA$-denominated account in the US that you've set up. ISTR that some US banks offer accounts denominated in foreign currency. I'd imagine HSBC is one of them. EverBank is another.

FDIC insurance is another matter. Here in Canada our CDIC explicitly excludes non-CA$ deposits. If this is an issue for you then consider opening a brokerage account in the US that allows holdings in CA$. Assuming this is possible, then perhaps a CA$ money market fund is a safer option. Make sure that the bulk of the MMF's holdings are in Canadian federal and provincial debt instruments. While a MMF isn't insured either, it's unlikely that Ottawa or any of the provinces would default when they can crank up the printing presses, spur inflation and/or raise taxes instead.
Topic Author
stefan3iii
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Re: Foreign Currency Account [US resident wants bank account in Canada]

Post by stefan3iii »

Final post here, sorry for the thread necromancy but I figured if anyone ever googles this, I'd be polite to leave info on how this all turned out.

I ended up opening BOTH an Everbank account and an East West Bank account, just to have a back up. I ended up wiring the money to the Everbank foreign currency account, and was able to wire it out without any issue. Opening the accounts was painless for both places as well. So, everything worked out, and I feel a little bad for using these accounts without any intention of actually using them long term, so all I can do is give them an endorsement in this post.
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