If you are a Canadian who travels to the United States regularly or someone who just requires US dollars for paying bills or making purchases or you get paid in US dollars but live in Canada; then it’s in your best interest to open a USD chequing account in Canada. If you’re a Canadian snowbird looking to save on expenses while in the United States, you might also want to take a look at our article on tips for Canadian snowbirds to manage the rising Canadian dollar pain.
Opening an American dollar account in Canada gives you full jurisdiction over your money, which means that you can decide when and how to exchange the currency that would give you the largest gain on the exchange.
Not only does it help you avoid high and fluctuating exchange rate costs, but it also gives you the option of using a third-party broker such as Knightsbridge Foreign Exchange that will guarantee you a much better exchange rate than your bank.
In addition to this, by having a U.S dollar account, you can monitor and wait for the best exchange rate or just keep it in the account for future purchases or travel without paying conversion fees to the bank a second time.
Lastly, if you have a U.S dollar account or credit card, you are able to evade the 2.5% per transaction conversion fee that is charged when you make a purchase in US dollars.
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Most banks in Canada tend to offer both a U.S dollar Chequing and Savings Account. There seems to be no major difference between the two accounts as both allow you to write cheques and provide interest between 0.05%- 0.50% if you maintain a maintain a minimum balance. However, as with most chequing accounts, you are charged a fee per transaction and have a limit on the number of transactions that can take place within a month.
Most Canadian banks tend to offer their existing clients a free or low-cost U.S dollar account if they have a Chequing or Savings Account with them. The average cost for opening a U.S Dollar Account varies anywhere from U.S $ 1.00 to U.S. $ 10.00. However, these fees can often be waived if you maintain a minimum balance depending on who your bank is. Hence, not only is it free and cost-effective it gives you the freedom on when and how to exchange your money.
If you already work with one of the Big five major banks in Canada and have a Chequing or Savings account with them, you can open a U.S Dollar account very easily within minutes over the phone, online or by visiting your closest branch. Just to ensure that everything goes smoothly and the accounts open without any hassle, it’s always good to have the following documents in hand.
These documents include:
• Valid/Existing Account Number for the bank
• Social Insurance Number
• Two pieces of Identification documents (Passport, Permanent resident card or Driver’s License)
• Proof of Address (optional)
Now that you know some of the advantages of opening a USD account and are contemplating on how to go about starting the process. Let me help you with the process and provide you with a step by step guide on how to open a USD account with some of the major banks of Canada namely TD, Bank of Montreal, National Bank, Bank of Nova Scotia and Royal Bank of Canada & CIBC.
TD offers two different types of USD accounts:
With the Borderless Plan, TD gives you unlimited free transactions, and free bank drafts as well as Traveler’s cheques. In addition to this, you also get your U.S dollar Visa Card fee waived. However, this account does come with a monthly fee of U.S $4.95 but can be reimbursed if you have a minimum balance of U.S $3000 in the account.
The U.S Dollar Daily Interest Chequing Account is a free US Dollar account with no monthly charges and earns interest too as well giving you the benefit of writing Cheques. Although there is no monthly on this account, TD will charge you U.S. $ 1.25 for every transaction. However, this can be avoided by keeping a minimum balance of U.S. $ 1,500.
It’s extremely simple to open a U.S account at TD and it can be done one of three ways listed below:
TD also requires some documents in order to make the process faster and convenient. These documents include:
Existing TD Customer:
• TD access card number and Account Number
• Social Insurance Number
• Two pieces of Identification (Passport, Driver’s License etc.)
If you are a new customer and don’t have any account with TD, then you will have to open a chequing or savings account at TD to open a USD account and bank with TD Canada Trust.
Just like TD, BMO also offers two different U.S Dollar accounts.
The BMO U.S Dollar chequing account works like any other chequing account that can be used for deposits, paying bills or just making U.S dollar purchases. There is no fee for opening an account as long as you have a basic chequing account with BMO (Basic chequing account monthly fee of $4.00 with 12 free transactions. The fee can be waived when you maintain a minimum balance of $2000). It’s significant to know that you do not need a minimum balance in the U.S Dollar account as long as you have a Canadian chequing account with BMO. If you are a Senior (60 +), you are able to get a discounted practical plan where you do not have to pay any monthly account fee. However, it’s important to keep in mind that you will be charged a fee of $60 to order 50 cheques.
The U.S Dollar Savings account at BMO works the same way as the Chequing account where you are required to have a Basic plan with BMO and need to pay a monthly fee of $4.00 that allows you to do 12 free transactions or $10.95 for 30 free transactions. The major difference between the two U.S dollar accounts is that with the savings account you will be earning an interest of up to 0.050% on all balances sustained in the account.
In order to start the process of opening an account with Bank of Montreal, you can start the process online by clicking on the link below:
Once you have submitted everything online, just visit your closest BMO branch and one of the representatives can activate your account for you.
In order to set up an account, BMO requires that you visit the closest BMO Branch with two pieces of Identification, one of which has to be a Photo ID and a signature on the banking agreement.
If you already have an account with BMO, you can use telephone banking (1-877-225-5266) or simply sign in on BMO online banking and add accounts to your existing plan.
The National Bank of Canada offers only one U.S Dollar Account.
The Progress Account in $USD offered by National Bank is an account that can be opened by anyone be it an existing customer or new customer without having a Canadian Chequing or Savings account at National Bank. It’s like any other account, where you don’t have to pay any monthly fee but have to pay transaction fees of CA$1.50. These fees can be taken off if you are able to maintain a balance of U.S $2500. However, you do need to pay $50 for 50 cheques and that fee is non-refundable. Moreover, you are also able to earn interest of about 0.1% if you have a balance of $5000+ in the account.
The only way to open an account with National Bank is to visit a branch with two pieces of Photo I.D and one of their representatives can open your account within minutes and you can start making deposits immediately.
The account cannot be opened online and you have to go to in person to a branch and open an account.
Just like National Bank, the bank of Nova Scotia offers only one type of U.S Dollar Account.
The U.S Dollar daily interest account offered by the Bank of Nova Scotia can be opened by anyone going into the branch and you don’t have to be an existing customer for Scotiabank to work with them. There is a monthly fee of U.S $ 1.00 but it can be reimbursed as long as you have a minimum balance of U.S $200. With that, you are also offered two free debit transactions per month and any additional transactions will come at a cost of $1.25 per transaction. Moreover, you have access to free USD cheques and bank drafts as well as tiered interest that is calculated on a daily basis depending on your balance at the end of the day.
Documents Required
As with all other banks, Bank of Nova Scotia also requires you to come into the branch with two pieces of government issued I.D and they will open your account instantly.
Royal Bank just like Bank of Montreal and TD Canada Trust offers a chequing and savings U.S Dollar account in Canada.
The U.S personal account is great for people who travel to the United States regularly because it gives you access to U.S cash through branch withdrawals in Canada as well as 6 free transactions per month and no minimum balance requirements. Every transaction thereafter will cost $1.00. However, there is a monthly fee of U.S $2.00 that has to be paid regardless of a number of funds you hold in your account. There is also a $7.50 bank draft fee as well as a charge for ordering cheques. The benefit of this account is that it can be opened online and you don’t have to be an existing customer to open a U.S Dollar account.
As with any savings account, the U.S. high-interest savings account offers an interest rate of 0.150% depending on the balance. There’s no monthly charge on the account, but you have only one free withdrawal per month. Any additional debit transaction comes at a cost of $3.00 each and cheques cannot be withdrawn or deposited in this account.
With Royal bank of Canada, you can just go online and open an account without having to visit a branch. If you are in Canada and meet the legal age requirement of your province, you are able to open an account. You can click on the link below to sign up.
In some rare cases, they might ask you to visit the branch with two pieces of ID if the system doesn’t recognize you but most of the time it can be done online from the comfort of your home.
CIBC like many other major banks offers only one U.S Dollar Account.
This Account can be opened by anyone regardless of whether you bank with CIBC or not free of charge with no minimum balance requirements. There is a charge of U.S $0.75 per transaction which includes anything from cheques, bill payments to ATM withdrawals. This account is feasible only for people who are looking to keep their savings in $USD. The reason being that CIBC tends to offer an interest rate of 0.01% for balances up to U.S $2,999.99 and can go as high as 0.10% for U.S $60,000 and over.
The requirements for CIBC are the same as the other banks which means that in order to open an account you will have to go into the branch with two pieces of identification documents and your account can be activated there and then. However, you can start the process online or over the phone by calling the 1-800-465-2422 or 1-888-337-2422 (for service in French) to make it faster and spend as little time at the bank as possible.
The majority of these banks also offer a cross-border banking plan that integrates between your Canadian and USD chequing accounts. For more information on these various plans, please consult our article on comparing cross-border banking plans for Canadians.
The Best Bank in Canada
Finding the best bank in Canada for your needs is a process that merits some time invested. Whether you’re looking for low interest credit cards, opening an account for the first time, moving to Canada, transfers to your new account, unlimited transactions or looking for a bank with a great bonus when you open an account, make sure you do your due diligence.
Choose the best bank for your needs. Research online and ask your friends and family for their opinion as to which is the best bank. Your personal finance needs may not require the largest bank, so find out what these financial institutions offer.
Leave us a comment below on your experience with cross-border banking with the Canadian banks and we will incorporate your feedback into our comparison.
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