With the US dollar once again stronger than the Canadian dollar, does it make any sense to open up a Canadian savings account? Not to get too crazy with currency trading and all, but does it make any sense to put a few thousand in a Canadian bank and just let it sit there until for a few years until maybe the US dollar is weaker again? Plus, are there any other advantages to having a bank account in Canada when visiting a few times a year?
Is it worth opening a Canadian bank account (for US citizen)?
- Thread starter bobnh
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I'd say yes only if you travel to Canada often and want to save on those expensive transaction fees when you exchange money.
there is just one problem. if you die in the US and have money in a canadian bank they will not give the money to your beneficiary unless they show up in person at the bank. if they cant do that either the bank or the canadian government keeps the money
Yes, if you travel to Montreal to hobby frequently. I open one just so I don't have to exchange money in the States before my trip and carry a chunk of Canadian dollars (which are way more colorful than the greenback) on me during my travel; and if I have Canadian dollars left, I'm not tempted to just blow them, instead I can deposit them back via the ATM's.
But you have to open an account in person when you're in Canada and you need to present two pieces of government issued ID's with your photos (like your passport and driver's license).
As someone suggested to me on another thread, if you have more than US$10,000 in a foreign country, you'll have to report it to the US federal government, which is no big deal because so many Americans are buying properties in TO and Vancouver and now likely Montreal because of the strong US dollar.
But you have to open an account in person when you're in Canada and you need to present two pieces of government issued ID's with your photos (like your passport and driver's license).
As someone suggested to me on another thread, if you have more than US$10,000 in a foreign country, you'll have to report it to the US federal government, which is no big deal because so many Americans are buying properties in TO and Vancouver and now likely Montreal because of the strong US dollar.
Hello ShyMan;
MAy I ask, whats the penalty for not reporting ?if you know ?
Cheers
Booker
I would agree if you hobby often in Montreal or if you hobby for several days at a time. Opening an account with a local bank saves so much hassle when dealing with the kind of cash one carries for 7-10 days of debauchery in Montreal.
+1 on Us TD Bank / Canada Trust. Plenty of ATMs to withdraw cash in downtown and south shore no fees. While your at it, if you don't already, get a credit card in US with no foreign transaction fees.
I'm doing my income tax returns now on Turbo Tax. TT said IRS have TT ask for that info on the tax return. And the Canadian bank asked me to fill out some forms -- they want my US social security number for taxation purposes so I opted not to receive any interests on my account. But I think the primary concern for the US banking regulators is that someone is not engaging in money laundering. The IRS just cares about folks paying taxes on their incomes. So the penalties varies with which US LE agency gets involved. But the Canadian banks will do the reporting automatically based on my experience.
If ATM fee avoidance is your primary reason for wanting to open a Canadian account, after a lot of digging I found that a debit card from Charles Schwab High Yield Checking Account reimburses all your ATM fees. It also does not charge foreign transaction fees for debit card usage. A lot of people that travel apparently swear by it. I opened one for my upcoming April Montreal trip even though my bank partners with ScotiaBank.
Yes, this is all true. I have been using a Schwab debit card for years, it works exactly as described.
Fidelity debit card is quite good too. It also reimburses the ATM fees. It does, however, charge foreign transaction fees (1%) when purchasing things.
I do have a Charles Schwab checking and love the non foreign transaction as well as the ATM refunds. The issue is when withdrawing money from other banks where they lower the rates. Last weekend, the rate was 1.35USD:1CAD when purchasing via debit and ~1.27USD:1CAD when withdrawing cash from three different banks. Now it's still good transaction rate, but it might have been better if I have a bank account that's Canadian owned (perhaps my wishing thinking?).
1.27 rate is weird. I also used my Schwab card last Sunday (March 12th) to withdraw cash from an HSBC ATM, and the rate I got was 1.34+.
Not to mention that you got it slightly the other way around: it is 1USD equals 1.35CAD
A anecdote it happen to me about 20 years ago !
I had a Canadian Bank account with a US Credit card and US accounts for funds.
The amount kept in Canadian funds was about $20.
In the US account $100,000 US
At the time Revenue Canada alleged that I had arrears totaling about $60,000 ,they exercised a seizure on my Canadian Bank account on the grounds that it was owed to her Majesty ! :lol:
The funny part, they never seized the US funds ,which I withdrew quickly after I learned the seizure .
The alleged debt was celled by the Court 2 years later ,never asked for my $20 .:lol:
Cheers
Booker
Thanks. It was 1.35CAD : 1USD on google. The 1.27 rate was from CIBC. I went to HSBC the next day and got 1.34 and Banque Nationale gave 1.33.
Lesson of the day, go HSBC!
My understanding is that the exchange rate you see on Google and XE Currency Converter are interbank rates. Consumers get close to that advertised rate but not quite the exact rate. I hope to be as lucky as the guy that got 1.35! I suppose once your U.S. money becomes Canadian money in a local account, then the issue of transaction rate is rendered moot? If so, it makes sense to open one especially when the dollar is favorable. It's always good when exchange rate is favorable. I have family & friends in the UK, and it's not favorable for Americans to convert to GBP. I held on to some GBP from my last trip in 2015 and that ended up being a mistake thanks to Brexit.
I wanted to start an account for American funds the US. My accountant told me to not do that for personal reasons. First of all interest is so low that you will not make any money on the account. You may also get the attention of Home Land Security. In the end it is just not worth it. Keep your money in cash and spend it as you need to. The IRS and Revenue Canada might also take an interest in your account.
Bingo
Your odds of getting audited go up substantially with a non-domestic bank as they seek out tax shelters.
The reality is that you should be expect to take it on the chin (6-8% net spread) every time you have to convert CAD/USD versus the true spot rate.
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