Comprehensive review of US dollar high interest savings accounts

This article explores the pros and cons for Canadians to open US dollar high interest bank accounts, and provides an overview of the various options available.

There are many cases where you might benefit from having a US dollar high interest bank account, if you stay frequently in the US, go south for the winter, or go cross-border shopping, for example. US dollar high interest accounts…

are relatively easy to set up
make it easy to transfer funds between Canadian and American dollar accounts
help you take advantage of favourable exchange rates
are a decent option to transfer money to from low interest US accounts at the “big banks”

There are also a few disadvantages to owning a US dollar high interest savings account:

Another account to keep track of.
The exchange rate may not always work in your favour.
It might not be practical for daily transactions.

The following “high interest savings” financial institutions offer US dollar high interest savings accounts (note: interest rates are listed as at publish date; they are subject to change):

Bank	Interest rate
Ally Financial – US Dollar Savings Account	0.65%
Hubert Financial – The American Dream	0.75%
ICICI Bank – US HiSave Savings Account	0.75%
ING Direct – US Investment Savings	0.50%
Manulife Bank – US Advantage Account	0.50%

Features of these accounts

All of the above banks are available to Canadian residents
There are no minimum deposits required
No monthly fees, with the exception of Manulife, which charges $1 a month for a statement.
US dollar high interest savings are not covered by CDIC.
Interest on all accounts are calculated daily and paid monthly
No chequing privileges on US high interest savings accounts except for Manulife

These accounts can be funded on an ongoing basis by making transfers from a Canadian bank account at the current exchange rate; transfers from a linked US dollar account at another Canadian financial institution; or you can mail in a cheque to deposit that is made payable to yourself in US dollars, provided that it is drawn on a Canadian Bank. You cannot deposit cheques payable to yourself drawn on US banks or deposit these cheques through an ATM. In some cases, withdrawals can be made at an ATM, but this service is very limited. If this service is important to you, please check with the relevant bank prior to opening the account.

These general account features and fees are listed on each bank’s website and are subject to change. Information should be verified prior to opening an account.

How These Accounts Work

Ally Financial

http://www.ally.ca/en/us-dollar-savings/

Opening the account: Apply online. You can make your initial deposit in either Canadian or US dollars. If you choose to send an opening deposit cheque in US dollars, it must be from a US dollar account at a Canadian financial institution.

Withdrawing funds: You can transfer funds from Canadian dollar accounts into US dollar accounts and vice versa. The system will provide you with an exchange rate that you can confirm or decline.

There is a convenient online currency converter.

Hubert Financial

https://www.happysavings.ca/the-american-dream.aspx

Opening the account: Apply online. You can send a cheque from US dollar account at a Canadian financial institution with your application payable to yourself for your first deposit. You can convert money from your Happy Savings Canadian account to your US Happy Savings Account at any time.

Withdrawing funds: Transfer funds from your US account to your Canadian account at any time. Hubert is not able to link their US dollar account with another financial institution’s US dollar account. To transfer funds to another US account, wire transfer is available for a fee of $22.50.

Exchange rates are posted on their website.

Deposits are covered by the Deposit Guarantee Corporation of Manitoba.

ICICI Bank

http://www.icicibank.ca/personal/personalaccounts/hiSave.htm

Opening the account: Apply online. Write a personalized cheque (with your name pre-printed) in the currency of the account from any Canadian financial institution, payable to yourself for any amount, as your initial deposit. Send with your application.

Withdrawing funds: You may move money between your Canadian dollar and US dollar accounts within ICICI Bank Canada. To move money from or to an external linked account, the external linked account must be in the same currency as your account with ICICI Bank Canada. For example, you may transfer money between your US dollar savings account in ICICI Bank Canada and the linked US dollar savings account with another financial institution.

ING Direct

http://www.ingdirect.ca/en/save-invest/usisa/index.html

Opening the account: Apply online. Send a cheque in US funds made payable to yourself from your chequing account at a Canadian bank or financial institution with your application for your first deposit.

Withdrawing funds: Your initial cheque links your bank account to your new ING DIRECT Investment Savings Account. You can transfer money between your bank and ING DIRECT whenever you want. You can transfer funds to and from your Canadian high interest savings account.

Exchange rates are posted on their website.

Manulife Financial

http://www.manulife.ca/canada/mbank.nsf/public/bank_personal_high-interest_deposit_accounts

Opening the account: Application must be completed with a financial planner. Send a cheque payable to yourself from another Canadian financial institution US dollar account, with the destination account number written on the back. Once your account is set up, you can deposit funds into your account by using the online banking system or the interactive telephone system.

Withdrawing funds: When making online transfers and writing cheques, the currencies must match. Transfers may be between two Canadian-dollar accounts or between two U.S.-dollar accounts only.

Comparison of interest rates at full service “big banks”

There are advantages to having a US Dollar bank account with one of the “big banks”. For example, if you are a Canadian business with US clients and receive occasional payments in US Dollars, you can deposit payments directly into your US dollar savings or chequing account.

BMO and CIBC have US dollar credit cards where US purchases are charged in US dollars. You can thus avoid exchange rate fees and timing issues. There are also some Canadian dollar credit cards (see this article for a summary) that do not charge an exchange rate surcharge. You lose the ability to time your exchanges, but if you are only making purchases in US dollars and payments in Canadian dollars, there will be some savings.

Check with your bank to see if they will permit US dollar cheque deposits through an ATM; you might have to go to a branch to make a deposit.

In some cases, withdrawals can be made from ATMs, but this service is limited. If this service is important to you, please check with the relevant bank prior to opening an account.

The table below summarizes general account features and fees provided on each bank’s website and the details are subject to change. Information should be verified prior to opening an account.

Bank	Current interest rate
BMO US Premium Rate Savings Account http://www.bmo.com No monthly fee $1 US per-transaction fee waived when you choose from one of 6 package (with various minimum balances and fees)	0.15%
TD Bank U.S. Dollar Daily Interest Chequing Account http://www.tdcanadatrust.com No monthly fee $1.00 US each transaction – waived with a $1,000 US minimum monthly balance Receive and write cheques in U.S. dollars View cheque service for $1.50 US per electronic image – or free if you choose paperless record keeping	0% to 0.20% depending on balance. Minimum $1000 balance required to start receiving daily interest
RBC US High Interest E-Savings Account http://www.rbcroyalbank.com No monthly fee No minimum balance requirements One free debit transaction per month Unlimited online transfers between your other RBC accounts Cross-border debit available	0.25%
CIBC US $ Personal Account https://www.cibc.com No monthly fee Write U.S. dollar cheques Withdraw U.S. funds from any branch or CIBC U.S. currency bank machine Transfer funds between CIBC US$ Personal Accounts and your other personal CIBC bank accounts at any CIBC branch or through CIBC Online Banking	0% to 0.30%, depending on balance. $3000 minimum required to start receiving daily interest
Scotia U.S. Dollar Daily Interest Account http://www.scotiabank.com Monthly fee is waived when you maintain a minimum daily balance of US $200. Includes two transactions per month (cheques, pre-authorized payments, cash withdrawals, and account transfers made with teller Additional transactions are US $1.00 each. If daily account balance drops below US $200, a monthly maintenance fee of US $1.00 applies. Commission-free USD money orders and USD drafts. Commission-free regular American Express USD Travellers Cheques.	0% to 0.15% depending on balance. $1000 minimum required to start receiving daily interest

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