If you have to deal with US currency on a semi-regular basis, then you know how quickly currency conversion costs can eat into your money! Your credit card charges you at least 2.5% off the top whenever you make a purchase in US dollars and the banks typically charge even more than that for buying US currency unless it is a large volume transaction. Worse still, if you ever get paid in US dollars, then you can wind up converting money to Canadian dollars when you receive payment and then BACK into US dollars when making a USD purchase. You are also at the mercy of ever-fluctuating exchange rates if you don’t have a US dollar bank account.
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Running this website, I do occasionally receive advertising or affiliate payments in USD so I frequently find myself in costly currency conversion situations and it’s starting to get really expensive. I always knew US dollar bank accounts were out there and I had done some preliminary research surrounding them, but I’m getting much more serious about it these days and I plan to open a US bank account at a Canadian bank very soon to reduce these currency exchange costs.
How A US Dollar Bank Account Reduces Currency Exchange Costs
If you open a US dollar bank account at a Canadian bank you will gain complete control of your money. This means that you, not the bank or Paypal, get to decide when and how you will be charged currency conversion fees, if at all. This is a major advantage because it gives you much more flexibility and cost savings:
- Keep US Dollars in your bank account without ever converting them and use them for future USD purchases.
- Great for foreign travel or when cross border shopping.
- No automatic currency conversion is triggered if you receive payments in US Dollars.
- Freedom to wait for a better exchange rate before converting to Canadian dollars.
- Opportunity to choose a 3rd party to exchange your money at much better exchange rates.
- Can wait for US cash to accumulate in your US bank account before conversion, which often results in lower rates.
- Withdraw US funds from Paypal without their inflated currency exchange fees.
- This is possibly only with accounts from RBC for very convoluted reasons (click the link for more info).
US Bank Account Comparison – Chequing Accounts & Savings Accounts
In the table below, you will find a side-by-side comparison of all the US dollar denominated accounts currently available through the big Canadian banks. Most of the most popular features are compared along with an overview of the requisite fees you must pay for using the accounts. This should make the US bank account selection process much easier for you, as it certainly did for me.
I have lumped the chequing and savings accounts all together in this one table because there seems to be no clear distinction between chequing and savings in the space; I’ve found that many accounts with cheque privileges also offer interest on balances and similarly several accounts deemed as “savings” also allow you to write cheques.
Note: The table scrolls horizontally!
|Account Name||Monthly Fee||No Fee Minimum Balance||Included Trans-actions||Trans-action Fees||Free Transactions
|Cheque Privileges||US$ ABM Deposit||US$ ABM Withdraw||Online Banking Trans-actions||Interest||Additional Notes|
|U.S. Dollar Bank Account||$4.00||$1,000||10||$0.60||N/A||0.00% – 0.20%||BMO only requires you to pay one monthly fee for ALL of your accounts. So if you bank there already, a US Dollar account is essentially free.|
|US$ Personal Account||$0.00||$0.00||0||$0.75||N/A||0.05% – 0.30%||US$ withdrawals are limited to select CIBC ABMs. You can deposit US dollars at any ABM according to the CSR I spoke with.|
|Progress Account in U.S. $||$3.50||N/A||0+||$0.65 - $1.25||$2,500||0.00% – 0.20%|
|U.S. Personal Banking||$2.00||N/A||6+||$0.75||N/A||US$ withdrawals are limited to 200+ select RBC ABMs. US$ deposits are not accepted at any RBC ABM according to the CSR I spoke with.|
|RBC US High Interest eSavings||$0.00||$0.00||1||$3.00||N/A||0.12%|
|U.S. Dollar Daily Interest Account||$1.00||$200||2||$0.60||N/A||0.00% – 0.15%||To view account balance in online banking and to get a bank card you need to have another Scotia account in Canadian dollars.|
|Tangerine US$ Savings Account||$0.00||$0.00||Unlimited||$0.00||$0.00||*||*||0.50%||Can use both Tangerine bank machines at Tangerine cafes Scotiabank ABMs. US$ deposits and withdrawals are limited to select ABMs. *No bank card is issued if you only have a US$ account but US ABM deposits and withdrawals are possible if you have a bank card.|
|U.S. Dollar Daily Interest Chequing Account||$0.00||$0.00||0+||$1.00||$1,000||0.00% – 0.20%||Extended TD branch hours are very valuable because US transaction are often lacking or restricted at ABMs.|
|Borderless Plan||$4.95||$3,000||Unlimited||$0.00||$0.00||0.00% –0.20%||Extended TD branch hours are very valuable because US transaction are often lacking or restricted at ABMs.|
What Is The Best US Bank Account For Canadians?
Best is usually relative based on your personal situation. However, there are some things that stood out to me when analyzing all this data that make some USD accounts better than others:
Only one bank, CIBC, claims to allow US dollar deposits at their bank machines and it is only those ABMs that are designated as US dollar bank machines. Two banks, CIBC and TD, offer US dollar chequing accounts that don’t require a minimum balance to waive the monthly fee; these would be good options for most people who do very few transactions in US dollars and don’t want to keep their money tied up in a foreign currency for a long time just to avoid fees.
TD is the only bank to offer an account that is both no fee with no minimum balance required and allows for unlimited free transactions if you keep your balance above a reasonable $1,000. It’s all possible with their US. Dollar Daily Interest Chequing Account. This is a great choice for people who want to pay no fees and deal in relatively large sums of US currency on a regular basis or that want to keep some money converted and ready in USD for whenever they need it.
BMO stands out as a good option for people who already bank with BMO because you can take advantage of your existing banking package to provide you with a US dollar account at no additional monthly cost along with the ability to use your existing quantity of free transactions towards US dollar transactions.
Finally, TD’s Borderless Plan offers a lot of extras for a reasonable price including unlimited free transactions, free cheques, and a waived annual fee on a US dollar credit card so you can spend your American currency that much easier while traveling the world.
A Note About Online Banking With US Bank Accounts
Figuring out what kind of transactions are possible in US dollars using online banking is pretty difficult because asking questions about it seems to confuse most CSRs. They start telling you what is available but often mix it up with what you can do with Canadian accounts. I had several tell me that I could do an email money transfer with my US account but I don’t think that is actually possible unless maybe you were doing an EMT to another Canadian US dollar account or you were converting the USD to Canadian dollars.
If a range of online banking functionality is important to you like electronic funds transfers in USD, bill payments in USD, etc then you may need to call and ask some very pointed questions or take the online banking for a test drive yourself.
Which Account Did I Choose?
I personally opted to go with the TD US Dollar Daily Interest Chequing Account for several reasons. The $1.00 per transaction fee is higher than most of their competitors but I like that there is no annual fee no matter what my balance is. Saving the monthly fee will make up for any of the few transactions I have to do during a given month. Secondly, there is the option to waive all transaction fees with keeping a minimum balance of $1,000. That is quite a bit of money for a temporary holdings account, but I can foresee keeping money there for when I travel to the USA and abroad as we like to do once or twice a year so my balance is bound to add up. TD also has the best business hours of all the big banks in Canada so, because many USD transactions need to be done at the teller, it will be much more convenient and ensure I will always be able to access my US cash when needed.
The other reason I chose TD is because I’ve always been allured by the high end TD Select Service account and the Borderless Plan. In the future I may transfer all my banking over from President’s Choice and RBC to just deal with one bank if I think that I can get enough value out of keeping a $5,000 balance with TD to waive the monthly $30 fee. Having a Select Service account also waives the fee on the borderless plan, which in turns waives the annual fee on their US$ Visa, which I think would be very handy to have when traveling. Having the option to switch to the Borderless Plan is also good because it allows me to order US denominated cheques at no additional cost other than the $4.95 monthly fee and then I can easily switch back once the cheques are ordered and save $30 or more each time I need cheques.
What US Bank Account Would You Choose?
Given the above information, which account would you choose? Please let us all know in the comments!