Want to find the best chequing account?
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If you travel south of the border - even just a few times each year - you're all too aware of how expensive it can be to exchange your currency. If you pay for anything with your credit card in the United States (U.S.), you'll often pay at least 2.50% or more for the currency exchange – and cash exchanges at banks are fairly similar.
Beyond just your travel needs, if you do any work that pays you in U.S. funds, you'll be charged to exchange that into Canadian funds – and if you travelled to the U.S. soon after and needed that money, you'd be charged again to change it back! So, if you find yourself dealing with U.S. dollars on even a semi-regular basis, it may be time to look at U.S. chequing accounts. Here's why.
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A U.S. chequing account (referred to as a checking account in America) is simply a chequing account that allows you to deposit and withdraw U.S. funds. Because you want to keep the U.S. funds on hand, there's no need to convert it to Canadian funds or pay the currency exchange rates to do so. With this type of chequing account, you'll have access to your U.S. funds whenever you need them.
The advantages of U.S. chequing accounts include:
Of course, there are a few drawbacks:
Ben currently does his daily banking with Scotiabank. He lives close to the border and likes to take advantage of the cheaper prices for retail goods down there, so he crosses over and does most of his shopping in the U.S. In the past, Ben always used his Scotia Momentum VISA Infinite to pay for his purchases, even though it meant he was getting dinged with a 2.50% currency exchange rate. However, for the past few months, he's noticed the currency exchange has started to take a bite out of his budget. If he spends an average of $500 USD/month, how much could he save by switching from using his credit card to using Scotia's U.S. Dollar Interest Account instead?
|Payment Option||Currency Exchange Calculation||Monthly Fee in CAD||Monthly Cost in CAD|
|Scotia Momentum VISA Infinite||$500 USD x 1.1212 = $560.50 CAD
($560.50 x 2.50%) = $574.51 CAD
|N/A (Ben would keep the card, just not use it for shopping in the U.S. anymore.)||$574.51 CAD|
|Scotia U.S. Dollar Interest Account||$500 USD x 1.121 = $560.50 CAD||$1.00 CAD||$561.50 CAD|
|Total Savings||$13.01/month or $156.12/year|
If Ben kept his shopping money in a U.S. chequing account, instead of using his credit card for everything, he could save $13.01/month or $156.12/year on currency exchange rates.
If you're thinking about adding a U.S. chequing account to your list of financial products, here are a few things to consider:
Once you've found and compared this information, you can apply for the right U.S. chequing account for you.
If you own property and/or do business in the U.S. often enough, you may want to consider opening a bank account in the U.S. with a U.S. lender, instead of just opening one with a Canadian lender. The application process is a little more complicated, in that you'll need to apply in-person with your passport and at least one other document, such as your driver's license. However, these accounts typically come with even lower monthly fees and better interest rates on U.S. deposits.
Opening and maintaining an account with a U.S. lender can also help you establish a credit history without a social security number, which would be important for anyone who wants to do business and/or own property in the U.S. So, before you open a U.S. chequing account in Canada, do all your research and decide which option makes the most sense for your situation.