December 18, 2008
I have been looking at US Dollar Accounts for the past couple of weeks.
1. RBC US E-Savings is paying 1% currently and allows 1 free transaction at the branch per month along with free monthly paper statement. Deposits can only be made in branch or transfer online from CDN to US from your chequing account at RBC.
2. Citizens Bank has a US Dollar account that is paying 2% interest along with free cheques and free monthly statement with no account fees. Only downside is deposits can only be made by money draft/order by mail or by transferring from chequing to US dollar account via online or telephone banking (currency conversion) https://www.citizensbank.ca/Personal/Products/BankAccounts/USDAccount/
3. ICICI Bank of Canada has a US Dollar account that is paying 2.5% interest - Statements only by e-mail, and deposits done by linking other bank accounts for bank to bank transfers. http://www.icicibank.ca/person.....hiSave.htm
4. CIBC - only reason I mention this one is because you can do deposits and withdrawals at some CIBC ATM's that have US cash on hand - but its 75 cents per transaction on the account and the interest is next to none - http://www.cibc.com/ca/chequin.....-acct.html
Personally I went with Royal...yeah it has a lower interest rate, but I can get the cash when I need it...and also deposit it with the least amount of hassle.
If you do alot of banking in the US...and your money is not just sitting there...perhaps look at RBC Access USA but it doesn't pay any interest which I believe you were looking for - http://www.rbcroyalbank.com/RB.....tails.html
Hope that helps
Any recommendations I'm finding rates averaging less then 1% perhaps I'm missing something. What do you do with your US dollars?
Oh, don't tempt me! I think toilet paper is worth more!
But seriously, I would be very careful about holding US$ cash or securities denoted in US dollars for the next little while.
Appreciate the replies,
As for the options
-Citizens bank makes it too difficult to access the money without conversion. Having to send money through the mail is not worth the effort. And I really wonder how long the 2% will last anyway.
-Since US$ are uninsured by CIDC I'm even more hesitant to go with ICICI after reading these forums.
-Perhaps Craig is right and it's time to convert some US$ into Canadian but I really don't want to get into speculation. It's nice to have some US cash on hand.
I tend to agree with you SG about the accessibility being the selling point here. It's interesting how you mention that it's an "E" account but you have branch access which is good.
In the end, if the best rates are hovering around 1%, I guess it's kind of trivial what I do the money anymore.
December 12, 2009
If you're worried about CDIC insurance, there is definitely some concern with smaller banks like ICICI Bank Canada or ING Bank of Canada. Both are not doing very well internationally and worry is warranted.
However, having U.S. cash in a USD account on a major Big Five Canadian bank or HSBC Bank Canada, the largest foreign-owned bank in Canada, should not worry you one bit - even if it isn't covered by CDIC, which it is not. If even one of the impeccably strong Big Five banks in Canada fails, the world is one heap of trouble. All of our banks survived the Great Depression and they will survive an even Greater Depression, if that's what we're in for. You needn't worry. I'd keep a USD account with U.S. currency in it, to protect yourself from wild swings in the foreign exchange markets.
I agree with Craig that you should take advantage of the 23% exchange rate on US to CDN, that's huge. Sell it off now, get an account at 2.75% vs 1% and enjoy the bonus of CDIC on the side. Plus with a 1% rate, it's almost meaningless interest and with no CDIC insurance, you might as well stick it in a matress.
The US Bailout is now over $8 Trillion, that's a lot of money to print and the US Gov't knows it will devalue their currency... (see where this is going)...
It's ok to hold some USD for trips, but not a large sum IMO.