Canadian seeking savings account at a US bank

May 23, 2009 1:55 PM

Canadian who wants to open a high-interest savings account at a US bank, in USD - which bank?

As the USD is relatively cheap to a Canadian right now, I'm interested in opening a USD savings account with about 5K, to cash out when the USD rises against the CAD again. Some Cdn banks offer them, but pay no interest and some don't even insure your USD holdings (they do the CAD). From what I've read, I have to physically go to the States and open an account. Does anyone know of a bank where I can just open an account online or by phone? BTW, I have no US mailing address.

posted by Penelope to work & money (8 comments total)

I think Netbank allows foreigners to open accounts online (they did a few years ago anyway). Also, TD and RBC both own American banks and transferring funds between an account at the American subsidiary and an account at the Canadian bank is much simpler than any other way of moving your money between an American bank and a Canadian one.
posted by winston at 2:00 PM on May 23

Netbank was closed and ING acquired them, I just checked...
posted by Penelope at 2:07 PM on May 23

Opening an account at the US subsidiary of a Canadian bank is going to be the lowest hassle method of getting a US account by far. However, I don't think either of them is going to pay a great interest rate.

If this were me, I would put the money in an ING USD account in Canada. The interest rate isn't great, but the hassle will be very minimal. Between opening an account at a US bank (other than RBC or TD), transferring the money there and transferring it back, I think you will spend far more in time and fees than you will gain in interest on $5000 compared to a rate you could get in Canada.
posted by ssg at 2:30 PM on May 23

I looked at ING just now, and they don't insure people's USD accounts, either. Weird. So if I use a Canadian bank that offers USD savings accounts, the money is not insured. So I might be better off buying the USD, and putting it in a safety deposit box at a bank. Or just forgetting the whole idea, which was to make some money when the USD goes back up.
posted by Penelope at 4:45 PM on May 23

If you want to make money from foreign exchange rates, you will get better rates going through a foreign exchange brokerage (Questrade is one, and is, I think, pretty accessible) or through the brokerage service of your bank (TD does this at reasonable rates.)

I highly doubt you will get a good interest rate with any bank that will let you open a USD account with $5000. Also take into account the fact that there are exchange fees associated with going between the currencies, so your interest rate in USD must be high enough to compensate for the movement of the currencies, the fees, and the fact that banks shave a few percentage points (aka pips, in foreign exchange) from the exchange rates they give you. This seems highly unlikely to me.

Regardless, even if you found a way to do this through a bank, I'm not sure why you'd get the impression that USD is going to go up in value vs the CAD any time soon. (Or anything, for that matter.) "The dollar is in retreat." - WSJ, yesterday. That article gives a good summary of the medium-term prospects of the dollar, and they are anything but good. I would strongly suggest not buying USD right now. I see the CAD banging right through parity and continuing upward, in the next couple of quarters.
posted by Super Hans at 5:01 PM on May 23

If you don't have a SSN you will encounter a fantastic number of hassles trying to open most US bank accounts. Ask clear questions. "We will open accounts for non-citizens" repeatedly did not mean "We do not require a SSN" when I was asking.
posted by kmennie at 5:40 PM on May 23

Heh, I'm in the US and reading the stories this week about the US Dollar's expected decline against world currencies. Some people here are thinking about using their US Dollars to buy world currencies.

To avoid difficulties with opening a foreign bank account, in the US you can buy an Exchange Traded Fund, or ETF, in a US stock brokerage account. Here is a list of foreign currency ETFs available in the US. You might look around to see if you have anything similar in Canada. If you do, it would be an easier way to do what you want to do.
posted by exphysicist345 at 8:35 PM on May 23

Yes, I was planning on waiting a few weeks or some time period, because i, too, think the USD will fall even more vs the CAD. But thought i'd start preparing where I could hold the USD if I do decide to jump on that bandwagon. I have a Questrade acct so will look at them, and have a TD account, too,I can check into. But it seems Canadian banks/brokers don't insure UDS holdings, which gives me pause, especially with Questrade, as they're new, and liable to be bought out. Maybe I'll go with TD if I decide to do it, and they're pretty unlikely to go out of business. : )

Either that or just buy some US stock while "my" (the CAD) dollar is strong.
posted by Penelope at 9:24 AM on May 24