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New article: comparison of US dollar high interest savings accounts
October 4, 2012
8:23 am
Peter
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A new article has been anonymously written, comparing various US dollar savings accounts at Canadian financial institutions -- both the "big banks" and the "high interest" ones more often discussed on this site:

https://www.highinterestsavings.ca/2012/10/comprehensive-review-us-dollar-high-interest-savings-accounts/

October 4, 2012
9:20 am
88kanakas
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I must be missing something.
So I set up a US$ account in an institution with no store front.
How do I obtain cash for shopping or holidaying in the US?

Currently I transfer CDN$ to my US$ account online at BMO. I leave say 500 at BMO and take the hard cash to Coast Capital CU where they pay a pitiful amount of interest but more than BMO AND your US$ account is covered by Credit Union Deposit Insurance Corporation (CUDIC). CUDIC is a government corporation that guarantees deposits and non-equity shares of British Columbia credit unions as provided by the Financial Institutions Act. And yes it covers foreign fund accounts too!

October 4, 2012
6:48 pm
NorthernRaven
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A typo in the article - "covert money" should probably be "convert money", unless there is some sort of money laundering implication... :)

The "Comprehensive" in the title may get you in trouble with the Truth in Advertising commission. TD has a $US dollar VISA card (not just Scotia/BMO), and I'm sure the other Big5 do as well. The chart shows the TD $US chequing account, but not the "Borderless" $US savings account, which provides the $US VISA card free, unlimited free transactions, as well as commission-free traveller's cheques and bank drafts. It's $4.95/month, but waived with a $3000 balance or if you have the Select Service plan. I'm assuming there may be missing options from the other banks as well?

October 4, 2012
7:25 pm
NorthernRaven
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Also, the apparent complete uselessness of the Hubert account is not sufficiently emphasized. As far as I can determine, there is no way to extract $US dollars from this account, except via the $22.50 wire transfer. That's a year's interest on $3000, and that's assuming the alternative is your mattress. Since there are many other options that pay at least some interest, the wire fee would wipe out the any advantage for much larger/longer amounts. The example they give of saving for a trip to Disney World demonstrates the stupidity of this - where would they wire the savings to pay the various $US expenses they might incur?

Or you can transfer to your $C account, getting $C, but for this you pay the 1.75% exchange commission. You'd have to have had those funds in the account for over 2 years just to break even. So, if you already have $US, it seems ridiculous to put them into this account, and if you have $C, it is doubly silly. Can anyone provide a useful real-world usage where this account benefits anyone (other than Hubert's forex and wire group)? This account should be stamped with a big bold "AVOID" watermark!

The Ally section doesn't point out that you can (apparently) link your $US account to an external $US account at another Canadian bank, in which case exchange rates would not be involved.

October 4, 2012
8:00 pm
Peter
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Thanks for catching the typo! As for the other potential additions, I'll leave that to the author to modify.

October 4, 2012
8:10 pm
Jgclghrn
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The point quoted below in the BMO account description is no longer valid as of Sept. 1, 2012. Now you have to sign up for an Air Miles Bank Plan at $13.95 a month to earn bonus Air miles.sf-frown

"Every month you maintain a daily balance of $5,000 or more in your chequing and/or savings account(s), you earn 25% more reward miles on the purchases you make using your BMO Gold AIR MILES MasterCard in the following month"

October 5, 2012
7:32 pm
Yatti
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I need to find someplace that will accept U.S. change.. I'm a poor student..

October 6, 2012
10:56 am
88kanakas
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Yatti said

I need to find someplace that will accept U.S. change.. I'm a poor student..

hmmmm do you get American change when you shop in Canada? It is basically at par so there is no point of hanging on to it. Spend it in Canada. Would that be a solution?sf-frown

October 12, 2012
8:37 am
RetirEd
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Whenever I know an American friend will be visiting, we plan to swap currency and split the agio. The visitors usually need some Canadian cash and don't want to pay outlandish fees on their credit card or at a broker. I want to keep a little US cash in my US account to pay for US subscriptions. I also always save every US coin, and swap change to my visitors... just because I'm so pissed at the greedy 2.5%+their choice of rate on the credit cards.

Consumer credit is BS. One thing Jesus had right was that the skimming money-changers have no place among us!
ED BEAR

October 16, 2012
1:07 pm
Doug
British Columbia, Canada
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RetirEd said

Whenever I know an American friend will be visiting, we plan to swap currency and split the agio. The visitors usually need some Canadian cash and don't want to pay outlandish fees on their credit card or at a broker. I want to keep a little US cash in my US account to pay for US subscriptions. I also always save every US coin, and swap change to my visitors... just because I'm so pissed at the greedy 2.5%+their choice of rate on the credit cards.

Consumer credit is BS. One thing Jesus had right was that the skimming money-changers have no place among us!
ED BEAR

RetirEd,

You might be interested in the "no annual fee" CAD dollar credit cards from JPMorganChase - the Sears Financial MasterCard and Amazon.ca Rewards Visa - that do not charge any foreign currency transaction fee over and above the standard bank exchange rate on the day and time of the purchase. Typically, that fee is 2.5%, as you said. Instead, they use the network provider's (Visa International or MasterCard International) exchange rate (there's a bit of spread built in, but there is with anything, including the exchange rate at your bank or credit union). It also allows you to avoid having to hold large amounts of unhedged foreign currency, making you susceptible to large swings in foreign exchange rates. Yes, this is also the same argument to holding foreign currency in foreign currency accounts by taking advantage of "good" exchange rate days, but the opposite side of that "coin" (no pun intended!), if there's a wild swing the "other" way and you need access to that cash in CAD funds, you're looking at a loss.

Cheers,
Doug

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