Norbert’s Gambit: The Complete Guide

[This post was updated in February 2015 to reflect recent changes at some brokerages.]

Norbert’s gambit remains the least expensive way to convert Canadian and US dollars at a discount brokerage. For investors looking to buy US-listed ETFs, learning this technique can save hundreds of dollars by sidestepping the wide currency spreads charged by brokerages.

With the 2013 launch of excellent unhedged foreign equity ETFs from Vanguard and iShares, there’s less of an incentive to use US-listed ETFs than there used to be. In fact, in a non-registered account or a TFSA it may not even be worth the added cost and inconvenience if the only difference is a few basis points of MER. But in an RRSP, there’s a significant benefit: using US-listed ETFs can dramatically reduce the impact of foreign withholding taxes, which can add an additional cost of 0.30% to 0.70% to US and international equity holdings.

The problem with learning to pulling off Norbert’s gambit, however, is that there’s no simple set of instructions that works at every brokerage. RBC Direct Investing and BMO InvestorLine both allow you to hold US dollars in registered accounts, but only RBC allows you to do Norbert’s gambit online: at BMO you need to pick up the phone. Scotia iTRADE doesn’t even allow Norbert’s gambit in an RRSP: instead, they offer a unique service that eliminates the retail spread on currency exchange for a flat fee.

As part of our DIY Investor Service, we helped clients do Norbert’s gambit at all of the big-bank brokerages. And for the last few months, Justin Bender and I have pulled that experience together and created a series of five white papers—one for each brokerage—with step-by-step instructions you can follow on your own. Each of the papers includes screenshots and detailed descriptions of each part of the process, all specific to each brokerage’s unique quirks:

Norbert’s Gambit: A better way to buy US dollars in an RBC Direct Investing RRSP

Norbert’s Gambit: A better way to buy US dollars in a BMO InvestorLine RRSP

Norbert’s Gambit: A better way to buy US dollars in a TD Direct Investing RRSP  [Update: As of late 2014, TD Direct Investing allows investors to hold USD in registered accounts, which makes “automatic wash trades” no longer necessary. A TD representative discusses the new process here.]

Norbert’s Gambit: A better way to buy US dollars in a CIBC Investor’s Edge RRSP  [Update: CIBC apparently now converts currency very close to the spot rate in RRSP accounts. However, they have not been forthcoming with the details: we recommend calling the brokerage before making a USD trade in your account.]

Norbert’s Gambit and US-Friendly RRSPs: A better way to buy US dollars at Scotia iTRADE

We’ve worked hard to make sure these papers are accurate and up to date, but we welcome your feedback. If you have had different experiences at any of the bank brokerages, please let us know and we’ll keep these resources up to date.

292 Responses to Norbert’s Gambit: The Complete Guide

  1. Isabelle November 29, 2014 at 5:14 pm #

    Thank you for the great white paper on Norbert’s Gambit with TD – I used it successfully on more than one occasion! Really liked how the instructions were so clear and detailed – very useful as I am a bit of a newbie…

    Just recently, TD introduced new US $ registered accounts and sent me a letter specifying that they ‘will no longer automatically buy/sell US$ Money Market in your RSP or TFSA to eliminate currency conversion charges’. I am wondering how this impacts the Norbert Gambit instructions in the white paper? Thank you

  2. Steve_O December 7, 2014 at 2:21 pm #


    I am forced to use HSBC InvestDirect as my brokerage, because my employer sponsored RRSP’s only links to HSBC.

    I haven’t seen anything online about how to use Norbert’s Gambit on HSBC InvestDirect, do you know if it s possible, or how would you recommend I proceed to figure out if it is possible?


  3. Canadian Couch Potato December 7, 2014 at 2:31 pm #

    @Steve_O: Sorry, I have no experience with HSBC InvestDirect. It’s unlikely any brokerage will help you with the specific instructions, and indeed, most won’t even know what Norbert’s gambit is if you ask. But you could start by asking them how they handle wash trades in an RRSP: e.g. if you sell a security denominated in USD and then repurchase another one in USD, are you charged the currency conversion twice? Then you could try making a small purchase of DLR and attempting to sell it immediately as DLR.U to see if that is allowed. (Some brokerages require you to wait three days for settlement, and even then some require a phone call to sell DLR.U.) Just be warned there will be some cost involved in figuring all this out.

    Good luck!

  4. Steve_o December 7, 2014 at 2:59 pm #

    @CCP: Many thanks for your reply. I thought that if I own a US security in USD, then sell it into USD, then re-purchase another US security from the very same USD, I would not pay any currency conversion costs, because at no time would Canadian dollars be in play. However you suggested I might actually have to pay a currency conversion cost twice? I don’t understand how I’d even have to pay this cost a single time. Thanks for your info!

  5. Canadian Couch Potato December 7, 2014 at 3:31 pm #

    @Steve_O: Many brokerages do not allow you to hold USD in registered accounts. So if you sell a USD security, the brokerage automatically converts the proceeds to CAD. If you then buy another USD security, the brokerage automatically converts that CAD back to USD. So you get dinged twice. The “wash sale” provisions (explained in the TD white paper) help you avoid this. Unfortunately I don’t know how things work at HSBC so I can’t be more specific. Their customer service reps should be able to explain how it works there.

  6. Steve_O December 10, 2014 at 9:16 am #


    If I “experiment” to see if Norbert’s Gambit works with HSBC InvestDirect and try to buy DLR and then sell as DLR.U: I could try this with a small amount of money (say $100 CAD), and the worst that could happen would be that I’m unable to convert it into USD, but instead I’d have to convert it back to CAD, in which case the experiment would cost me 2 trades ($10 per trade, so $20), and a small conversion fee (no more than 1-2% of $100)?

    And if I am able to convert my $100 CAD to USD using NG, then I could go ahead with converting my $15,000?
    Thanks very much!

  7. Canadian Couch Potato December 13, 2014 at 8:55 am #

    @Steve_O: I think trying with a small amount is the only way you’re going to know for sure what’s the brokerage’s practices are. The most important thing is figuring out how they handle the journaling: i.e. Do you have to phone? Do you have to wait for settlement?

  8. Park December 21, 2014 at 5:18 pm #

    This is a lengthy thread, so this may already have been mentioned. TD Direct Investing now has US dollar RRSPs and TFSAs. The downside is that the Norbert’s Gambit, that could formerly be done in RRSPs/TFSAs, has changed. To do Norbert’s Gambit in an RRSP/TFSA, the same method is now used as in an open account. This results in a three day waiting period, or one pays a telephone commission on one of the trades.

  9. Davie215 December 21, 2014 at 5:42 pm #

    I have performed Norbert’s gambit both before and after comments were posted here that TD Direct Investing would charge for the trader support to implement, and that the trades could not be performed without waiting for the three-day settlement delay.

    Both occasions I was charged only $9.99 commission, and the agent journalled over the shares right after I executed the DLR buy on the originating side, and he did the sale of the other side. Funds were immediately in the account, so I did the buy of the sought equity in the new currency within minutes of the DLR/DLR.U executions.

    I asked a rep on Friday who was pitching the USD accounts to entice a transfer in from BMO why they had not officially broadcast the USD registered account feature, and they are taking it slow, he said. I told him that I’d likely want to do the gambit if TD DI had our RSPs. Did not ask if the practices would change, but after telling him I’d done it several times in margin accounts he did not speak up as to any changes so I will confirm this next time.

    As mentioned last time, we enjoy President’s account status, so may be getting a bonus over what the non-premium clients enjoy, but thought I’d clarify past handling at TD DI.

  10. ben January 6, 2015 at 10:29 am #

    Because TD now offers USD RRSP accounts I assume you no longer need to request automatic washing?

  11. Canadian Couch Potato January 6, 2015 at 2:50 pm #

    @ben: Much of the TD white paper is out of date since TD changed its policies. Other comments under this post include experiences from investors who have done Norbert’s gambit at TD since the changes. These should be helpful until we are able to update the white paper.

  12. Bill January 18, 2015 at 9:28 am #

    I am using Norbert’s Gambit in a non-registered account at iTrade, to convert USD to Cdn. So far I have purchased shares of DLR.U in my US margin account and requested on-line that they be transferred to my Canadian margin account (I presume that once transferred the shares will become DLR?). I received a response that said I would have to wait till the DLR.U shares settled before the transfer would be made (about 3 business days). So in theory (I made the purchase on Friday) I could wait till Wednesday and sell the shares of DLR to complete the conversion to Canadian dollars, Alternatively, is there any drawbacks to selling my DLR shares short immediately (Thus locking in the current exchange rate on Friday, the day I purchased the DLR.U shares), then covering the short on the following Wednesday when (hopefully) my DLR shares settle?

  13. Canadian Couch Potato January 18, 2015 at 9:39 am #

    @Bill: I use iTrade, too, and have done this several times (though not in a margin account). The shares will be journaled to the Canadian side of the account on the settlement day and it’s best simply to wait. There is no need to “lock in” the rate you got on Friday. You had US dollars, then you bought DLR.U, and then it will get converted to DLR. During this whole process your currency exposure has never changed: you have always been exposed to the US dollar. Your exposure only changes when you sell DLR and receive Canadian cash.

  14. Park January 18, 2015 at 10:42 am #

    In my TD Direct RRSP, I am using DLR/DLR.U to exchange dollars. I am having to wait 3 days until settlement.

  15. Bill January 18, 2015 at 11:37 am #

    I think I’m missing something. It’s my understanding That DLR holds US cash and trades in Canadian dollars (i.e. it represents the price of $10 USD’s in Cdn dollars; on Friday it varied between $11.97 and $12.04), whereas DLR.U is the US dollar equivalent. Thus DLR.U will always trade around $10 US (on Friday it varied between $9.98 and $10.01). DLR will thus vary with the US/Cdn exchange rate. If this is correct, and I wait 3 business days to sell my DLR, am I not risking that a change in the ER will alter the value of DLR and the number of Canadian dollars I get (of course it could work to my advantage). By selling short, am I not locking in the January 16th exchange rate and reducing the uncertainty regarding how much I will receive?

    Since DLR.U is less volatile by its nature, selling Canadian dollars for USD’s does not have the uncertainty that is (described above) when one moves from USD to Cdn.

  16. Canadian Couch Potato January 18, 2015 at 12:07 pm #

    @Bill: Sorry, I misunderstood: I have no experience with short selling and hadn’t thought through exactly how your suggestion would work. But it sounds like you are correct that selling DLR short would lock in the exchange rate for that day, whereas if you wait three days for the first trade to settle the rate could change.

    The key point I wanted to make is that DLR and DLR.U are literally the same security: they have the same CUSIP number. It’s just that you can buy or sell it in both currencies. So whichever one you hold gives you identical exposure to the US dollar: it is not possible for one to be more volatile than the other.

    I see this misunderstanding a lot with US equity ETFs. Many people believe that holding Canadian-listed and US-listed ETFs of US stocks gives them different currency exposure:

    Hope this helps.

  17. Park January 19, 2015 at 12:19 am #

    As mentioned previously, there is the three day waiting period until settlement. When I phoned TD Direct, to see if it could be done earlier, the response was no. In fact, the person I spoke to said that the journal could take up to 48 hours after settlement occurred, but did emphasize that it would very likely be done by the afternoon, if requested in the morning. She mentioned how I could convert currency online very easily, and that there would be no waiting period for that.

    One interpretation is that TD Direct is aware of Norbert’s Gambit, and is making an effort to persuade one not to use it.

  18. oldie January 19, 2015 at 1:11 am #

    @ Park:
    “This results in a three day waiting period, or one pays a telephone commission on one of the trades.”

    How much is one telephone trading commission? $30? If so, this would still seem like a good value if you could execute the double trade of the DLR gambit without wasting 3 days.

    Furthermore, for really large sums it would be worthwhile paying the money for one or even two telephone trading commissions to set up in advance the logistics of a Norbert’s Gambit involving an interlisted stock trading on the TSE and the NYSE in large volumes, such as shares of TD bank, and to thus be able to do a buy and sell in quick succession with a journalling over of the stock in between, ideally using the same trader.

  19. Bill January 19, 2015 at 11:05 am #

    There appears to be a basic asymmetry in Norbert’s Gambit when using DLR. It involves different implications of the 3 day wait when one is converting from Cdn to US dollars or from US dollars to Cdn dollars. This is based on the fact that DRL,U (which is the value of $10 US in USDs) is generally around $10. Thus if you are converting from Cdn to USDs, once you have bought DLR you have locked in the exchange rate and the wait of 3 days will make little difference (provided I am correct about DLR.U hovering around $10). Thus if I were doing this I would attempt to avoid the $30 charge. On the other hand DLR (which is the value of $10 US in Cdn dollars) changes with the exchange rate. If you are converting from USD to Cdn dollars you buy DLR.U and after converting these you sell DLR. In the 3 day settling period the exchange rate could move for you or against you, affecting the price of DLR and affecting how many Cdn dollars you end up with in your pocket. In a previous reply I suggested buying DLR.U and selling short DLR as a solution to avoid this uncertainty, but apparently you cannot hold shares in a margin acoount and short them at the same time and since DLR and DLR.U have the same CUSIP number, I suspect it cannot be done.

  20. oldie January 19, 2015 at 12:45 pm #

    @Bill: I agree that the true Couch Potato would not be trying to predict a future rise or fall of the CND:USD exchange rate, and therefore should not obsess too much about a 3 day wait, especially in the case of a DLR gambit. On the other hand, in the case of a gambit using TD or a similarly interlisted stock, even a few minutes delay between buy and sell trades may be enough to allow a drift or even an unexpected spike or dip in prices which would cost you more than your projected 0.03% cast of the gambit plus the cost of trades. To put it in perspective, on a conversion of $100k USD, 0.03% would be $30. The cost of two on-line trades would be $20, which would be fine, if your brokerage allowed automatic journalling and instant reselling. However, if they didn’t, and the cost of the buy-sell value disparity rose to, say, 0.20% (I just chose that value because it is the cost of the DLR gambit) which works out to $200 (and it could easily be more), then the $30 charge for a phone assisted trade, or even $60 for two, might work out to be a net saving.

    But for those starting from scratch, I guess, even better would be to find out which company’s platforms are most “Gambit-friendly”, and allow seamless on-line trading of interlisted stocks (eg TD) or those trading in both currencies (DLR/DLR.U), which is the point of the ongoing research and tabulation of this guide.

  21. Davie215 January 19, 2015 at 1:13 pm #

    To repeat, I have performed the gambit three times with TD on a non-registered account, and executed all trades within minutes of each other, while having a trader on the phone at the time of the need for journalling to complete the currency trade so I could buy the security on the other dollar side.

    All were performed for the online $9.99, not the broker assisted commission, and none of the trades required waiting three days for settlement, increasing the currency exposure while waiting to apply the converted dollars.

    These trades were done both before and after comments were made here about the waiting period, and I know some comments may have applied to a newly-available USD registered account, but mine were for a non-registered one.

    Also, as a premium level client, they may have made exceptions to the cumbersome 3-day or more delay which brings the cost of the gambit into a speculative currency play.

  22. Bill January 19, 2015 at 1:58 pm #

    I tried the Gambit on the phone a few years ago in my non-registered account, and was told in no uncertain terms I had to wait 3 days for settlement before the shares could be journaled. I wonder if it depends on which agent you get on the phone.

    I agree with most of what you have said, however for the conversion from US dollars to Canadian dollars you are left at the whim of the market, much like in the interlisted stock example you provide. In this case it is movements in the ER rather than a stock price that is the problem. Of course one might argue that the variation in the ER might be less worrisome. This problem does not exist for the conversion from Canadian to US dollars using DRL.

  23. Vasile January 19, 2015 at 8:36 pm #


    I’ve just sold my house and the plan is to convert all of the Canadian funds (more than 300k) to US$. Not right now, but when the CDN $ will restore its strength a little.

    The closing date will be within 2 months, so I need to prepare for the Gambit. I have some old TD Waterhouse direct brokerage account (haven’t used it for 3 years+). Which I could resuscitate or just create a new one. I also have a Questrade account. If you were to choose between those 2, which one would you personally consider more appropriate for the Norbert’s gambit? In terms of precision of execution, professionalism and no platform glitches or amateurism in general?

    Also, what inter-listed stock or ETF would you go with for such high amounts. I’m a bit afraid, because I would do this for the 1st time. Also, I guess for TDW, I have to explicitly ask them to create also an US acct? Or that’s implicit – can’t recall because long time had passed since using them (I don’t even remember the credentials / account numbers).

    Also, any other advice and gotchas would be more than welcome.

    Thanks a lot.

  24. Park January 20, 2015 at 1:24 am #

    If I were converting $300K, I’d get an account at IB. You’d get the institutional exchange rate, but you have to be comfortable trading currency.

  25. Vasile January 20, 2015 at 1:49 am #

    Are the InteractiveBrokers charging any account inactivity fees? Could I just open an account with them and fund it later, when I see the CDN rising?

    How is the currency trading done? Is it similar to Questrade’s? I recall trying to do something similar with QT long time ago, with a forex account, but it wasn’t working as I was expecting i.e. there was never a crossing between one currency to another. Does IB’s currency trading account really allow you to exchange between 2 currency types? Will that be riskier / more volatile than the inter-listed stock trick?

    In the meantime, I’ve realized that TD Waterhouse wants “yearly management fees” and “quarterly custodian fees” for non-registered Direct Investor margin accounts…With some exception for the latter, for the first 6-month period. I’m wondering – if one keeps the account to zero and funds it 2-3 days before actually doing the gambit, but after 6 month since the acct opening, will he still be charged those quarterly fees if he clear out the acct after the conversion? TDW seemed to be more flexible with those management fees 3-4 years ago 🙁

    Thank you.

  26. Brian G January 20, 2015 at 6:42 pm #


    You wrote: “the plan is to convert all of the Canadian funds (more than 300k) to US$. Not right now, but when the CDN $ will restore its strength a little.”

    I think you have an assumption in there that you cannot predict. You seem to be assuming the CAD will go up relative to USD. Why do you assume this? Isn’t it equally likely it could go down? For example, the CAD reached an all time high of 1.04 USD = 1 CAD in 1976. It didn’t reach that level again until 2011; 35 years later! In the time in between it went as low as .61 USD = 1 CAD.

    I suggest you make your trade plans based on what you know and what you need and not on unpredictable.

    Just food for thought.

  27. oldie January 20, 2015 at 9:07 pm #

    @Vasile: Don’t want to be seeming to pile on here, but I share Brian G’s concerns. For perspective, I am a relative Couch Potato Newbie who first stumbled on the concept (and this excellent website) about 30 months ago, read the whole blog, some parts many times, absorbing as much as I could, as well as other recommended literature, then took the whole portion of my investment portfolio that my wife would allow (the major part) out of the hands of the prior active manager and transformed it into a more or less typical Complete Couch Potato portfolio, with some taxation-related tweaks. Contrary to the very strong emotional message that intuition (what you think you know) provides, there really is no reliable way to predict the immediate/intermediate/long-range direction of the value of the Canadian Dollar.

    The safest, most rational strategy espoused by the true Couch Potato should be to make all investment decisions without requiring any economic predictions of the future, including this one. I see that I have essentially said what Brian G has said, for which I apologise for boring you with old information, but one purpose of this forum is for mutual support and helpful advice, which I hope this is.

  28. Vasile January 20, 2015 at 9:18 pm #

    @Brian G and @oldie

    Very good and pertinent opinions, and useful advice. Just to clarify more on my context. I’m planning to do this CAD->USD conversion not for investment / forex speculation purposes. I have relocated in US and the rest of the family (wife and 2 little kids) will join me within 2 month from now, at the moment when our house sale closes.

    The plan is to maximize the value on the resulting USD side, as we’ll eventually be able to purchase a house, here in US. And right now it looks like the CAD is much weaker than 1-2 years ago?

    Obviousily, this step mustn’t be done in a hurry – we could let the CDN funds accumulate some interest in an Anchieva 2% interest account until I find more favorable conditions for the forex conversion.

    For this operation, I was looking for the safest method and hiccup-free discount broker. And also ease of move the money around between our TD CAD + USD chequing accounts and that discount brokerage.

    I guess QT is out of question – tried to get more details on account funding and withdrawals, EFT setups etc, and the CSR guys was slow – I had to spend almost an hour to extract the right and pertinent info from him. Considering the past bad experience with QT, maybe it’s wise to stay away from them. So I guess TDW and Interactive Brokers are the better candidates? How’s IB in regards to money transfers in and out, especially US$ ?

    Many thanks for helping all of us with useful advice.

  29. oldie January 20, 2015 at 10:19 pm #

    @Vasile: My limited experience has been with conversion using NG for re-investment (for such a large sum I think NG using an interlisted stock such as TD would provide significant savings compared to other methods, but only if you are prepared to research this thoroughly — this post, the associated comments and related links provide a wealth of pertinent information, which requires careful sorting out). Therefore, I have no experience regarding possible obstacles subsequent to the conversion of cash in Can$ to US$. However, following the general principals that I have absorbed here, market timing of US property prices and trying to anticipate and incorporate favourable movement of the Can:US exchange rate is speculation, pure and simple, which may or may not be appropriate in your situation, but lies outside the realm of rational investing which I have become comfortable with.

  30. electoys January 20, 2015 at 10:48 pm #

    @Vasile: I agree with oldie and Brian G. Don’t time the market. But if you are going to store it in CAD, I’d suggest you use Accelerate Financial. Their savings rate has consistently been the highest I’ve found for several years now.

    Give QT a second chance. Their online presence is excellent for opening accounts, transferring funds, uploading special instructions, and their fees are very low. Unlike so many other institutions their wire transfer fee is a flat fee…not a percentage or tiered. Not as useful for you, but their portfolio summary tool is quite slick. With over 150K in assets you’ll qualify for their higher, Platinum, level of service. Requests are processed quicker and you have access to more experienced customer service reps.

  31. Darby January 21, 2015 at 11:01 am #

    @Vasile I have been following this thread and although I have very limited knowledge about Norber’ts Gambit I have been looking into the same thing. You have said: “The plan is to maximize the value on the resulting USD side, as we’ll eventually be able to purchase a house, here in US.” From that comment I am assuming that after converting your funds to USD, sometime in the future you will want to use that money to buy a house in the States in USD. I have spoken with a TD representative who told me that my USD investments will be automatically converted back to CAD when I try to withdraw them. I have talked to RBC Royal Bank Canada and they have told me that they will allow me to withdraw my USD directly to my RBC Royal Bank Canada USD savings account with no conversion to CAD. I can then transfer those funds to my RBC Bank USD chequing account – a U.S. subsidiary of RBC Royal Bank Canada. My USD investments are held in an RRSP account so I do not know if that makes a difference but it is something to consider if you want the funds to remain in USD upon withdrawal. We own property in the US and will be moving our USD investments from TD Direct Investing to RBC Royal Bank Canada so that we can withdraw them in USD to fund any expenses associated with our U.S. property without incurring currency conversion losses. Just something to think about. I would welcome any comments on this from more knowledgeable investors.

  32. Brian G January 21, 2015 at 11:45 am #

    @Darby, if that’s truly TD’s stance, that’s incredible. I’ve (mostly) left TD a while back and haven’t looked back. They seem to pull all sorts of costly anti-customer tricks like this and I’ve lost all trust in them.

    That said, are you sure they won’t do a USD wire transfer to RBC USD Savings Account? It might cost a few bucks, but it might save you the currency conversion.

    Alternatively, what you could do is buy DLR.U and then do an in-kind account transfer out of TD to RBC. Then once in RBC you could transfer to RBC USD Savings. Done this way TD would not be able to stop you and it would thwart their trick of forcing a costly currency conversion on you.

  33. Vasile January 21, 2015 at 11:46 am #

    Hi @Darby,

    Yes, if we manage to get a good conversion rate (which is highly unlikely for 2015 or even 2016 – the CAD took quite a dive by about 10% since November 2014?), we’d like to transfer the whole US funds into the other account in Colorado and contemplate buying a house here.

    Thank you for pointing about difficulties with TD Direct Investing brokerage in regards to keeping USD-based fund transfers as-is and not converted.

    One question though: are you currently having a US-denominated Chequing account with TD Canada Trust? If you don’t, maybe that’s the reason with the TD Waterhouse representative told you that your US funds would get re-converted to CAD?

    Thanks again.

  34. Vasile January 21, 2015 at 12:06 pm #

    …or maybe because your TD brokerage-hosted US funds are held in a RRSP account.

  35. Darby January 21, 2015 at 12:34 pm #

    @Brian G I did not ask about a wire transfer because transferring in kind to RBC from TD is not a problem except for the fees they charge for transfers to other institutions but I suspect RBC will pick up the fee for us because of the amount being transferred.

    My problem with TD is that they would not let me withdraw funds in USD from my RRSP not that they would not let me transfer them in kind.

    @Vasile We do not currently have a USD chequing account at TD but the representative did not ask me that when I inquired about withdrawing funds and did not give that as a option of how to avoid the currency conversion. Needless to say I was quite disappointed in TD as I have waited for a long time for them to even allow us to hold USD in an RRSP as cash. RBC has allowed that for some time now and since my USD saving and chequing accounts are with them I would now prefer to simply transfer my USD investments to them and withdraw them as necessary in USD.

    The only questionable thing that I did not ask TD is whether or not it makes a difference that the USD investments are held in my RRSP vs an unregistered account – a moot point for me.

    RBC told me that they would only convert the amount necessary to pay the withholding taxes and deposit the remaining funds in my USD savings account or alternatively I could use other funds that were already in CAD to pay the withholding taxes.

  36. Vasile January 21, 2015 at 2:08 pm #


    A US-denominated RRSP vs non-registered trading account is not a moot point at all.
    Because something doesn’t add up. You mentioned earlier that your final goal is to get US funds transferred to a United States bank account (checking or savings), correct? In such case, you wouldn’t be able to transfer a RRSP/registered account to something equivalent in the United States bank/investment universe. So you would need to de-register your RRSP (RRSP withdrawal) and have your US funds subject to RRSP withholding taxes and somehow finally arrive into a non-registered account with TD Canada Trust. Now, how would you be able to achieve that without going via RRSP_USD->RRSP_CAD->non_RRSP_CAD->non_RRSP_USD and finally to US Banck route, I don’t know. I guess it’s impossible, so the advice from the TD representative has made sense to me.

    My situation is simpler: no RRSP accounts. And the plan is to
    1. Move 340k worth of CAD funds from my TD Line of Credit (which will show a cash surplus) to TD waterhouse brokerage account (the CAD part).

    2. Do the Norbert’s Gambit and have the forex conversion equivalent into the US sub-account of TDW brokerage main account.

    3. Then initiate a USD-based withddrawal from TD Waterhouse USD sub-account to my TD Canada Trust US chequing account.

    4. Use the cross-border banking program @ TD Bank in USA and transfer $100,000 per day from my TD Canada Trust US chequing account to my TD Bank checking account in USA (via an EasyWeb account linking)

    5. And finally. move all the USD money from TD Bank Washington DC branch (I’ve just picked one branch randomly from their Eastern Cost presence, since I’m in Colorado and they basically have no physical branch here) to my Colorado-based bank. Via an ACH external transfer (which is NOT a wire transfer, so it will be free of any other fees).

    I prefer to stay in the “TD Canada + US universe” because I do not wish to deal with wire transfers. Which I HATE because they are never deterministic and the stupid banks always refuse to tell you before the fact, how much they will steal from your money. These wire transfer mechanism makes me wonder – how long should we endure this lack of transparency and theft !??? How the hell they cannot tell you in advance all the money wasted in transit ??

  37. oldie January 21, 2015 at 6:34 pm #

    “Yes, if we manage to get a good conversion rate (which is highly unlikely for 2015 or even 2016 – the CAD took quite a dive by about 10% since November 2014?)”

    Leaving aside for the moment the problem of predicting the CAD:USD Exchange Rate one or two years in the future, in your worry about “a good conversion rate”, don’t confuse the COST of conversion, with which Norbert’s Gambit can definitely protect you, with the number of US dollars you get for your Canadian dollars, which is largely determined by the prevailing spot rate, an unpredictable value which NG can not help you with.

    “Which I HATE because they are never deterministic and the stupid banks always refuse to tell you before the fact, how much they will steal from your money. These wire transfer mechanism makes me wonder – how long should we endure this lack of transparency and theft !???”

    I agree, the charges for wire transfers seem outrageous to me, especially in this electronic age; but to try and understand their side of things,maybe it’s because they invoke all kinds of human intervention, managers have to sign etc., presumably for accountability. Wish there was a way around it.

    But if there are unforeseeable charges, surely these pertain to gouging on exchange rates? Surely once you have converted to US dollars, and the wire transfer is all in US dollars you can ask a simple question ” How much will a wire transfer cost?” and they are obliged to give you a straight answer. I think I remember doing a wire transfer within the last 4 years, and the bank charged me a specific amount for the service, an amount which they were able to specify in advance.

  38. Vasile January 21, 2015 at 7:25 pm #

    @oldie, please try not to be so patronizing. Of course, I can understand the difference between “additional costs incurred with the actual forex conversion” and a good or bad CAD-to-USD conversion parity 🙂

    Regarding the wire transfers, none of the two different banks I have tried in the past (TD or NBC), were able to tell me what the actual total wire costs will be (even when no forex conversion is involved i.e. when I wanted to send USD from my bank’s USD chequing account to some company in South Korea and expecting USD as well). The damn banks don’t wish to tell you that EVEN if the recepient’s bank account is with a bank having a direct correspondent account with the sender’s bank, that is, when no other greedy middlemen are interfering with the transaction. They do that on purpose and you can never tell how much they can steal from you – 2 percent, 4 percent, TWENTY PERCENT !? It’s non-deterministic and uncontrollable. One cannot tolerate such theft. How come this SWIFT / IBAN international money transfer is still kept into existence with such LACK OF TRANSPARENCY and lots of money made from the customers, without work? PARASITES.

  39. Darby January 21, 2015 at 8:34 pm #

    @Vasile when I said “The only questionable thing that I did not ask TD is whether or not it makes a difference that the USD investments are held in my RRSP vs an unregistered account – a moot point for me.” I was referring to my particular situation. My USD investments are held in a RRSP. I want to withdraw/deregister some of those USD funds. I realize that I would have to pay withholding taxes when doing this. My point was that TD specifically told me that I could not withdraw/deregister any of my USD investment without having the money first converted to CAD from which they would take the withholding taxes and give me the remaining CAD funds thus incurring currency conversion fees from TD. RBC on the other hand told me that if my USD investments were held with them in my RRSP I could withdraw/deregister whatever amount I chose and they would convert only the amount required to pay the withholding taxes and deposit the remaining amount in my USD savings account. Alternatively RBC told my that I could provide the CAD amount needed to pay the withholding taxes and receive all of the USD in my USD saving account. TD would not do this for me. Perhaps it is different if you are withdrawing money from an unregistered account but since that is not my situation I did not ask TD if this was possible. Good luck with your currency conversion. I would suggest that you ask TD if once you have deposited your funds and converted them to USD will they allow you to withdraw them into your TD USD chequing account or will they convert them to CAD?

  40. oldie January 21, 2015 at 8:35 pm #

    @Vasile: Of course; I do sincerely apologise 🙁

    Nevertheless, it is difficult to tell whether this particular familiarity with foreign exchange proceedings is due to the focussed explanations that all of us have read here, or whether this is basic knowledge for anyone with even an elementary level of financial training. One would think that the latter should be the case, but it ain’t necessarily so.

    During the preliminary discussion I had with my financial advisor regarding my proposed large NG in 2013 I had to step through the process with him as he had not encountered it before. When I explained it to him, he wondered why I would bother, as he thought that the financial institution connected with our professional association’s financial management arm would give a very favourable rate. He was able to quote a current amount of CAD I would get for a given amount of USD, or the current conversion factor that was quoted for us; but he was unable to give me the cost of the conversion. It seemed that he was unable to understand my question regarding the cost built into the FX conversion factor, insisting there was no fee. He then attempted to do an off the cuff calculation of my dollar cost for the transaction, and when I went over his calculations it turned out that he was confusing the dollar difference after conversion with the cost of the transaction. And he was my advisor. Hence my wariness with assuming everyone understood this. Again, my apologies.


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