I transferred some money over to my non-registered margin account on Questrade today from my non-registered BMO investorline account. It took me a few days of procrastination, one day of trying to figure out why I couldn’t do a USD bill payment from my BMO bank account, and finally another day figuring out that in order to transfer USD, you need to do a pre-authorized deposit.
I actually searched my own blog on how to transfer USD and couldn’t find anything (I’m not narcissistic I swear! I just remembered that I posted about how long a USD transfer took back in January). I finally figured it out today (after wasting about a total of 45 minutes of my life that I will never see again). I thought I would actually post it and help you save 45 minutes of your precious time… and if I have a memory lapse again, I can search my blog with “great success”, as Borat would say.
The reason why you might do a USD transfer is because you won’t have to exchange your Canadian dollars into US dollars when the exchange rate isn’t favourable. I don’t like losing money to currency hits AND conversion charges. It’s a win-win situation.
So here is the low-down on how to transfer your USD to Questrade from your USD account, step by step:
- Log into My Questrade
- Click on “My Funds”
- Click on “Fund Your Account”
- As you can see, only Online Banking and Pre-authorized Deposits are free of charge; Online Banking doesn’t do US dollar transfers, so the only free option is a Pre-authorized Deposit
- Before you get freaked out by the word “pre-authroized deposit” like I initially did, you can do a pre-authorized deposit only once- it doesn’t have to be recurring (yes, you can be non-commital like me)
- Follow the instructions- they’ll ask for your US dollar bank account number and will verify your bank account with e-signatures
- Once you’ve set up that account link, you can transfer USD any time with ease (no need to fill out a form/ paper work each time)
- I set up the Pre-authorized deposit back in January (and forgot about it, of course), and it still worked for me today (it will work for you forever as long as you don’t change your US dollar account number)
- After setting this up, this time, it only took one day to transfer to Questrade from my USD account. Awesome. =)
Why Should I Bother Holding USD?
There was a time when holding USD in your discount brokerage account was a major advantage – especially if you were an index investor through ETFs. This advantage basically boils down to the fact that the US was way ahead of Canada when it came to ETFs and the competitive cutting of MER fees. Consequently, if you were looking to get quick and easy diversification to any market other than Canada’s, the best way to do it was through the NYSE. Now, you don’t need to change money over from Canadian Dollars to American Dollars before buying a stock or an ETF on the NYSE – buy what happens is that when you go to make that purchase and have only Canadian cash available within your account, is that it automatically get exchanged. If you do this regularly and are constantly converting cash back and forth between NYSE-listed ETFs/stocks and your Canadian cash, you’re going to lose a ton of money on the exchange rate. It’s way better to keep your money in one currency if possible. Not all discount brokerages are created equal in this regard though – some will charge you an account fee for the privilege of holding USD there. As you no doubt have picked up by this point, I’m a HUGE fan of keeping my money working for me inside of my portfolio – as opposed to working for someone else through fees and commissions!
Happy trading US equities! As Miley Cyrus would say, party in the USA!