What's the best way to deposit US checks in Canada to be used in Canada?

January 1, 2014 2:38 PM

I'm a Canadian freelancer located in the GTA area, and I've signed on for a long-term contract with a US client. I'll be getting paid in USD checks fairly regularly. How can I deposit this money in my Canadian bank account and use it in Canada without getting screwed over on currency exchange fees with the big 5 banks?

I have both a regular Canadian account and a US currency account with CIBC, but my main day-to-day bank account as well as my savings accounts are with PC Financial. The easiest thing to do would be to deposit checks in my USD account and then transfer it to my Canadian account with CIBC and then write myself checks to my PC Financial account or something, but I fear being screwed over by CIBC's exchange transaction fees.

I've done a little research, and it seems like the most cost-effective way to go is to deposit the checks in the CIBC USD account, send those funds through something like Knightsbridge or XE Trade to be converted into Canadian dollars, and then have one of the FOREX services send Canadian funds back into my PC Financial account.

Have you been in a similar situation where you've had to regularly cash USD checks in Canada? Is this the best way to go? Do you have any experience with XE Trade or Knightsbridge or any other FOREX service, and are they as awesome as they say they are? Are there other ways of doing this that I haven't considered?

Thanks in advance!

posted by Be cool, sodapop to Work & Money (9 answers total)

I can't figure out why you would use a FOREX service beyond whatever bank you're using...

I get paid in USD and I also have to buy a lot of Japanese yen on a regular basis.

For USD, I have a RBC USD account that deposits go into. Since there isn't much of a spread these days, I usually convert the USD at the Royal Bank. Or, I take a cash envelope and convert the USD into Canadian currency at a currency trader up the street.

My assumption is that using FOREX services are adding an extra layer of fees onto the transaction; my assumption is also that USD is relatively common in Canada, so using RBC or a currency trader is going to get me a good rate.

With yen, I have to purchase yen; RBC has a terrible rate, so I go to a retail currency trader to make a purchase (usually up to equivalent of $10k).

Anyway, I would be interested in learning the benefits of using an online FOREX service; obviously it is more convenient, since you don't have to carry around a large wad of cash on a regular/monthly basis.
posted by KokuRyu at 4:04 PM on January 1, 2014

Both my credit union and big bank are more than fair with US cheques. I just make sure to cash in person, because I don't think I can do it through the ATM. I have not seen any benefit to going with an FOREX.
posted by Chaussette and the Pussy Cats at 6:04 PM on January 1, 2014

Best answer: I'm in a similar situation. I use an RBC USA cross-border bank account. This is an actual American bank account through RBC's US subsidiary (not just a Canadian bank account denominated in US$).

They provide a smartphone app that lets you deposit US cheques by taking a picture of the front and back, and they usually clear within a few days (unlike depositing US cheques into a Canadian bank account of whatever denomination, which can take weeks to clear). There is a limit to the amount that can be deposited this way, but you can also have your clients mail your cheques directly to the bank at a US address, which means it should arrive in a reasonable amount of time (the border can add days or weeks to mail) and, again, clears quickly.

The most convenient thing is that you can instantly transfer money to a Canadian RBC account through their online banking and I've found the rates to be reasonable (particularly if you're converting larger amounts and have their Preferred US account, which can end up being worth the high monthly fee for this reason).

Another nice feature is that you get a US debit card which you can use to make online purchases from US retailers or while travelling in the States, directly from your US account. So no extra conversion or cross-border fees. You can also get US credit cards.

For me, getting to any bank's branch involves four hours of travel all told, so being able to do all of these things online is a huge time saver, and that factored into my decision to move most of my banking from a credit union to RBC despite the disadvantages of a Big Bank. I feel it's worked out to my advantage, particularly since I get a rather better exchange rate with this setup that more than compensates for the higher day-to-day banking fees that RBC charges.

I think one or two of the other Big 5 Canadian banks offer this sort of thing as well, but I don't have any experience with them.

I'll be eagerly watching this thread to see if there's something I could be doing better, through.
posted by Emanuel at 6:23 PM on January 1, 2014

Best answer: Don't deposit into oc financial directly. They hold for 30 business days on occasion.

Use TD (or as mentioned I guess RBC offers too) cross border banking. Have the checks deposited into a TD bank (american account) then call or go online to transfer to TD Canada trust (Canadian account) it's completely free, you get the preferred exchange rate, and you can transfer up to 20k daily. The transfers can take 24 hours but I've never had it take longer than. About 10 minutes.
posted by chasles at 6:43 PM on January 1, 2014

Damn. Forgot to add I'm an American living in GTA. I accept us checks for a house I owned in the states, from family, tax refunds etc etc coming INTO Canada and I'm paying my usa student loan OUT OF Canada monthly this way. Its much better than PC (which I used to use) or driving across the border monthly (which I did for four years until the cross border having thing...)
posted by chasles at 6:45 PM on January 1, 2014

Response by poster: Emanuel, I've never heard of people mailing cheques directly to bank locations and having the bank deposit it without you present. Can you tell me a little bit more about how this works?

Cross-border banking sounds like a great option, I'll definitely be looking into this. I have an existing account with TD so that's probably what I'd go with. Thanks folks.
posted by Be cool, sodapop at 10:42 PM on January 1, 2014

I've only done this from Canada to the US - so I'm not sure if there is symmetry. And I've only done it on a limited basis so for the purposes of a recurring transaction I might be full of crap. Wire transfers are more immediate and cost much less in my experience. Perhaps you can get your US client to deposit to your Canadian account via wire transfer.
posted by vapidave at 2:02 AM on January 2, 2014

Best answer: If you give your us client the account number to your us account all they have to do is write "for deposit only acct######" and mail or drop at your branch and your bank will deposit it. I worked for companies before direct deposit who did this for me since I traveled for a living.... It's very simple. Don't worry about giving them your account number either, same info you would provide if they were in fact doing direct deposit.
posted by chasles at 5:50 AM on January 2, 2014

Best answer:

I've never heard of people mailing cheques directly to bank locations and having the bank deposit it without you present. Can you tell me a little bit more about how this works?

This is a service that the RBC cross-border banking provides. RBC Bank USA does not actually have any branches (they used to have branches in the South-East, but sold that part of the operation to PNC Bank), so the *only* ways to deposit a cheque are by using their app to take a picture of it, or by mailing it to them. Because it is a separate operation from RBC Royal Bank (the Canadian bank), and in another country, you can't do anything with your RBC USA account from a Canadian RBC branch.

They do request that the words "for deposit only to account #" be written on the back, but I've found in practise that they'll deposit it even if that's missing.
posted by Emanuel at 5:52 AM on January 2, 2014