IB for Canadians - USD vs CAD Currency

[Nelson 2]

All, Canadian here and getting started (slowly) and hopefully successful journey.  With regards to Funding IB, is it best to convert the funds to USD or keep it as CAD?  Looking to understand pros/cons, fees etc.

[Neil 5]

Great question, I'd also like to know this. 

[Justin 264]

100% make sure your funds are in USD.

I simply deposit in USD, so there is no conversion necessary on IBs side. They receive it in USD, you trade in USD, there are no fees, and when I pull my money out it just goes straight into my US Dollar savings account in my bank (RBC).

[Nelson 2]

Thanks Justin.  OK, lets say the existing funds are in CAD.  Is it a simple process to have IB convert it....assuming there will be a fee associated with it.  I'm with one of the Big 5 Financial Institutions here in Canada as well, I created a Chequings account in CAD to Fund IB (Both Margin and Savings Accounts).  At this point sounds as if its best to keep it as is and just convert it directly through IB...i'm ok with a hit of a few dollars assuming its flat fee and not % based.

[Justin 264]

Yeah, it's extremely simple to convert through IB. I don't think there is a flat fee, but they "Convert currencies at rates that are among the most competitive in the online brokerage industry."

So just double check you're okay with the rate they are giving you.

[rcjr 2]

Yeah. They pretty much give you whatever the spot rate the major dealers are trading on. The spreads are incredibly tight. And they only tag a very small commission per trade.

[Richie N 4]

On 6/29/2020 at 12:21 PM, Justin said:

100% make sure your funds are in USD.

I simply deposit in USD, so there is no conversion necessary on IBs side. They receive it in USD, you trade in USD, there are no fees, and when I pull my money out it just goes straight into my US Dollar savings account in my bank (RBC).

Hi, Justin.

I have an RBC USD account.   Went to fund IB through the RBC bill bay option but RBC only does the bill pay in Canadian funds.  Could you tell me what method you're using through RBC to fund your IB account in USD?   Perhaps you have linked your accounts?  I just want to be certain I am doing this correctly and not stuck with paying the exchange fees twice.

Thanks a lot for your help.

Richard

[Justin 264]

On 8/18/2020 at 10:52 PM, Richie N said:

Hi, Justin.

I have an RBC USD account.   Went to fund IB through the RBC bill bay option but RBC only does the bill pay in Canadian funds.  Could you tell me what method you're using through RBC to fund your IB account in USD?   Perhaps you have linked your accounts?  I just want to be certain I am doing this correctly and not stuck with paying the exchange fees twice.

Thanks a lot for your help.

Richard

Yeah, you can't do Bill Pay for the quicker transfer.

You need to do it through a standard Electronic Funds Transfer, and you'll also be subjected to a 4 day trading hold once they receive the money.

It sucks, but it works.

[Honeyman 3]

is the best way to trade from Canada  and on the NYSE  with an IB account with the base currecy set to USD and then do all deposits and withdrawals with a canadian bank in a USD account?

 

[Another Peter 2]

Basically, yes.

The conversion to USD either happens before the transfer to IB, like Justin does, or in the IB account as described above.