I recently opened a US Dollar account in Canada to accept the US currency payments I get from my blogging business. Over the last year, I initially experimented with accepting U.S. funds through PayPal. When I needed to pay for services in USD and they had PayPal as an option, it was easy to make direct payments in USD and save on the 2.5% foreign transaction fee that would otherwise be charged by my credit cards.
However, there was a problem with accessing the U.S. funds for use elsewhere. When I transferred the money from PayPal to my Canadian chequing account, it was automatically converted to Canadian dollars at an exchange rate that was ridiculous at best.
So, I started looking at the various options available to me:
- Open a U.S. Dollar Bank account (chequing or savings) in Canada. This would make it easy to receive and keep USD. I would not need to convert U.S. Dollars to CAD unless required, and then I could exchange my money utilizing third-party FX companies with friendlier exchange rates.
- Get a U.S. Dollar Credit Card. This would save me on the 2.5% or more in foreign currency conversion fees when I have to pay in USD. However, these usually come with a hefty annual fee. Alternatively, I could also use a no-FX markup Canadian credit card and only worry about the exchange rate set by Visa or Mastercard.
- Open a U.S. Dollar Bank account at a U.S. Bank. This option would make it easy to transfer USD from PayPal without incurring losses due to the exchange rate. With a U.S. address, a U.S. dollar account at a bank resident in the U.S. also makes it easier to conduct some transactions, particularly if you are a Canadian snowbird who lives part of the year in the U.S., owns a property in the U.S., or who often needs to write U.S. dollar cheques.
Best U.S. Dollar Accounts in Canada
I finally went with a USD account at a Canadian bank. These were the Canadian banks I researched before making a choice and they offer U.S. denominated accounts that have different pros and cons. The U.S. dollar chequing and savings accounts did not appear to be much different as some offered to pay interest on your balances and transaction fees applied subject to certain conditions.
1. TD Canada Trust US Dollar Accounts
TD Bank offers two U.S. dollar accounts:
TD U.S. Daily Interest Chequing Account: This account has no monthly account fee and pays interest on balances of $1,000 or more. There is a transaction fee of $1.25, however, you pay no transaction fees if you keep a minimum of $1,500 balance in your account at the end of the month. This account pays interest up to 0.01% on your balance.
TD Borderless Plan: This account comes with a monthly $4.95 USD fee and unlimited free transactions. If your balance at month’s end is $3,000 or more, the monthly fee is waived.
You can also pair these accounts with the TD U.S. Dollar Visa Card which comes with a $39 U.S. annual fee (this fee is waived if you open a Borderless Plan account).
TD U.S. bank accounts can easily be opened online or in-branch.
2. Royal Bank of Canada US Dollar Accounts
RBC has two main U.S. dollar accounts:
RBC U.S. Personal Account: Comes with a $2 monthly account fee that includes 6 free debit transactions per month and $1.60 per transaction after. Personalized cheques, bank drafts, and overdraft protection are available at a fee. There is no minimum balance requirement.
RBC U.S. High-Interest Savings Account: This account has no monthly fees and comes with 1 free transaction per month. Thereafter, a $3.00 fee applies per transaction. Cheques are not allowed. You can earn up to 0.05% interest on your account balance.
You can open either of these accounts online or by going into an RBC branch. They can also be paired with RBC’s U.S. dollar credit card i.e. the U.S. Dollar Visa Gold at a $65 annual fee.
3. Bank of Montreal US Dollar Accounts
BMO has two main U.S. dollar accounts:
BMO U.S. Dollar Chequing Account: The cost of this account depends on whether you already pay monthly fees on any other BMO account. If so, this U.S. chequing account has a $0 monthly fee. The minimum account fee at BMO is $4 and comes with 12 free transactions across all your accounts. A $1.25 fee applies to any transactions exceeding 12 free ones.
BMO U.S. Dollar Savings Account: You earn 0.05% on your balance. This account is similar to their U.S. chequing in that there is no monthly fee if you already own another BMO account. The minimum monthly fee payable across all your accounts is $4 and comes with 12 free transactions and $1.25 per transaction after.
Seniors over age 60 do not pay the $4 monthly fee.
4. CIBC US Dollar Account
CIBC offers only one U.S. account:
CIBC US$ Personal Account: It offers a 0.05% interest rate on your balance (no minimum requirement) and has no monthly account fees. However, you pay 0.75 USD for all transactions. This account allows you to write U.S. dollar cheques and withdraw USD from any CIBC branch or their U.S. currency ATMs in Canada.
You can combine this account with the CIBC U.S. Dollar Aventura Gold Visa card which has a $35 annual fee. Accounts can be opened online or by stepping into one of their branches.
5. National Bank of Canada US Dollar Account
They offer only one USD account:
USD Progress Account: There is no monthly fee and you earn 0.01% interest on account balances of $5,000 or more and 0.10% on balances exceeding $10,000.
A $2 USD fee is applicable for automated bill payments. Personalized cheques, bank drafts, and overdraft protection are also available at a fee. To open an account, you will need to visit a branch unless you already have another account with the bank.
6. Scotiabank US Dollar Account
Similar to the National Bank, Scotiabank offers only one U.S.account:
Scotia U.S. Dollar Daily Interest Account: This account comes with a $1 monthly fee and you get 2 free debit transactions per month and $1.25 per transaction after. The monthly is waived if you keep a $200 USD minimum balance or if you are a senior who is age 60 or over.
The interest rate earned on your balance depends on your account balance (tiered) and is up to 0.05%. You can open an account in person or by phone at 1-800-747-3208.
7. Tangerine US Dollar Account
Tangerine Bank which is known for one of the best high-interest savings and free chequing accounts in Canada, also offers one U.S. dollar account.
Tangerine US Dollar Savings Account: This account has no monthly fee and offers a 0.10% interest rate on all balances and with no minimum balance requirement. You also get free unlimited transactions.
To open an account, check-in at one of their pop-up locations, cafes, or kiosks. Alternatively, you can simply open it online.
Which U.S. Dollar Account Did I Choose?
I initially chose the TD USD Daily Interest Chequing Account because:
- It has no monthly fees.
- Pays interest on balances of $1,000 or more.
- It waives the $1.25 transaction fee with a minimum balance of $1,500 which is a reasonable amount for my intended use.
- I have other accounts with TD and opening a USD account online via their EasyWeb platform took me about 2-3 minutes.
I later added the TD U.S. Dollar Visa after switching my TD USD chequing to the Borderless Plan. This plan waives the monthly fee and the $39 annual fee on the credit card when you keep a minimum balance.
USD Accounts in Canada vs. USD Accounts in the United States
When I was researching how to decrease my U.S. Dollar exposure to unfavourable exchange rates, one of the options I looked at was opening an account at a U.S. based bank.
Some of the big Canadian banks like CIBC, TD, and RBC have divisions/branches in the U.S. that allow for ‘seamless’ cross-border banking.
CIBC Bank USA
CIBC Bank USA Smart Account: It automatically links to your Canadian CIBC Online Banking profile. You get a CIBC Bank USA debit card, can write USD checks, pay bills in U.S. dollars to U.S. billers, have free access to multiple ATMs in the States, and can receive U.S. payroll deposits. You do not need a U.S. address or SSN to open an account.
RBC Bank USA
Similar to CIBC, the U.S. based branches of RBC allow Canadians to open an account without needing to have a U.S. address or SSN. Your U.S. account syncs with RBC Online Banking and gives you access to over 50,000 free ATMs in the U.S. RBC’s cross-border offering include:
Direct Banking: Annual fee of $39.50 or $3.95 per month. You get 10 free debits per month and $1.00 per transaction after.
Premium Checking: $99.95 annual fee (or $9.95 per month) and unlimited transactions.
TD Convenience Checking
This account has a $15 monthly fee which can be waived if you keep a minimum daily balance of $100.
BMO Harris US
You can open the following accounts: Smart Money Account, Smart Advantage Account, and Premier Account.
Opening a USD account located in the U.S. comes with a few advantages and disadvantages.
Advantages
- Easier to pay your bills in the U.S.
- You can build a U.S. credit history
- Save on foreign transaction costs
- Easily transfer U.S. PayPal funds to your account
Disadvantages
- Opening an account can be cumbersome
- You can’t conveniently go into the branch if you need to while in Canada
- Interest earned on your account may trigger taxes payable in the U.S.
- One more additional bank account and headache to deal with
An Additional USD Account Option For Canadians
One other US Dollar account available to Canadians is through Transferwise.
I came across the company’s Borderless Account while looking for low-fee USD options and it looks really interesting. When you open an account with Transferwise Borderless account, you can receive money from multiple countries with zero fees. You get a:
- US account number and routing number
- British account number and sort code
- European IBAN
- Australian account number and BSB code, and
- New Zealand account number
You can hold over 40 different currencies in your borderless account and switch between them as required to send, get paid, spend money, and to avoid having to pay FX fees. The account also gives you access to a real mid-market exchange rate that significantly beats what your bank offers.
While I ended up choosing TD for my USD banking needs, the $0 monthly account fees offered by Transferwise are worth checking out. Learn about Transferwise’s promotion here if you are sending money.
Related Posts:
- Best Credit Cards With No Foreign Transaction Fees in Canada
- TransferWise Canada Review
- Best No Fee Cash Back Cards in Canada
- Best Credit Cards With Free Rental Insurance in Canada
- The Top High-Interest Savings Account in Canada
- 100 Genius Ways To Save Money
BONUS
If all you are looking to do is to infrequently send money abroad in different currencies and at a great rate, the online Canadian bank, Simplii Financial’s, Global Money Transfer is another option to look at. This service allows you to send money with no transfer fees to over 60 countries in 1-3 business days.
You can also order more than 65 currencies using their Foreign Cash Service. The funds are delivered to your house or you can pick up at the nearest Canada Post office. For both services, you receive up to a $50 bonus when you first use them.
Thank you so much, Enoch, for this very thorough and helpful article! I am a freelancer in Canada who has clients in both Canada and the US. PayPal is taking a fair amount of fees and I am not earning any interest on my US funds that are sitting there. I am interested in signing up for a US account here in Canada as you’ve listed because I also travel there a lot and also live on the border. I would need it to transfer the US funds from PayPal so I can start earning some interest, but my main goal is so that my US Clients can just skip PayPal altogether and e-transfer me so I don’t have to deal with the fees. Will that work with the accounts you mentioned for the Canadian Banks? If I give my clients my email can they just e-transfer USD to that account? Also, do any of them offer a debit card so when I’m travelling in the states I can take USD out from that account? Thanks again for this awesome article! If you have a particular bank that you would recommend for what I’m looking for, I’m all ears!
@Sherri: I don’t think that you are able to get Interac e-transfer-type payments from US-based clients to a US-dollar bank account domiciled in Canada. I may be wrong, but the kinds of direct deposits I have been able to receive are more like wires and EFTs and they come with fees.
You should take a look at Transferwise and their borderless account to see if it meets your needs. I have a review of the service here:
https://www.savvynewcanadians.com/transferwise-review-canada/
Great work sir. Transfer wire is intriguing thanks for the lead, will read the https: listed above. How secure do you think these transfers are they regulated. Large USD transfers US and back? Is it wholesale FX intraday trading curency that you would be receiving or sending once money transfers? Thanks again!
@Tom: Yes, I believe Transferwise is regulated, however, I can’t comment on the security as I have not used them personally.
I do use Transferwise, Royal Bank, and RBC Bank USA for various business and personal purposes. I also run EUR accounts in the EU. I am satisfied.
In general I usually use Transferwise for EUR-US bidirectional activity, and Usually Royal Bank and RBC USA for CAD-US bidirectional activity. All work fine and are capable of handling other bidirectional flow combinations. There are limitations on both but they are minor and I think most people would not be inconvenienced by them
Thank you Enoch, for the advice- I steered me in the right direction and allowed me I do further research. Sherri, my clients use Zelle to transfer money to my USD account for free with TD. All you need is a US address.
All the best!
@Mia: Thanks for your feedback. Happy to be of help!
Hi Mia, are you using a peronal US address or can use TD US address that can be provided?
THANK YOU!
I’ve been waiting for someone to write a comprehensive post about U.S dollar accounts and credit cards for Canadians. Thank you. So now that you have a U.S dollar account how is the transfer of funds with PayPal now?
Please keep us posted on what you decide to do about the credit card.
@Roxy: I haven’t tried transferring USD from PayPal yet, as I now receive most USD funds directly in my USD bank account.
Stay tuned for an update on the USD credit card. 😉
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Yea, I just read that PayPal doesn’t allow you to withdraw U.S dollars into a U.S account in Canada only Canadian dollars. That sucks. Do you know of any of other options besides direct bank transfer? Thanks for your articles btw.
Hi Enoch,
When you receive a payment directly to your TD USD account in Canada does TD charge you a fee for the transaction?
Thank you,
Lauren
Sorry, to clarify, I am looking for a way to receive payments from the US to my USD TD account without being charged a fee. Thank you.
@Lauren: I’m honestly not sure how it works half the time. In some cases, I get the exact amount the vendor is sending to me. And, sometimes, a small fee is deducted…although I haven’t been able to figure out if they deduct a specific percentage. I’m not aware of options to transfer USD to TD free of charge.
This is an excellent article. I found it extremely helpful. I am trying to figure out a way to use my US$ from my Questrade account when travelling to the US, without having to convert them to Canadian dollars and back to US dollars. Most of the Canadian US dollar accounts make it challenging to access the money in the account. Ideally, I would like to be able to use my bank debit card in a US ATM and withdraw my US funds. However, most of the US accounts can’t be accessed using your debit card. Please let me know if you are aware of an efficient way to get US cash from any of the US bank accounts.
@Dan: An option would be to open a US dollar account with a U.S. bank. Most of the big banks listed above have U.S. divisions and you can open an account with one of them and obtain a debit card.
Another option that may work in the future is Transferwise… They have a debit Mastercard in beta that looks promising.
Good afternoon,
I just wish to add, while Simplii does not charge a transfer fee, check with the receiving bank. We were somewhat shocked to find that our US bank (Wells Fargo) charged a $16.00 fee for the transaction, as this is considered a “wire transfer”. Just a FYI.
Good point, Kathy! Thanks for contributing.
It seems like Tangerine is my only choice??? Because, there seems like no one else will give me a decent interest rate to park $150k US currency. True? Tks, for any ideas.
@Bob: Yes, Tangerine appears to offer the best rate currently available.
TD offers .95% on US dollar ( cash account) held in your trading account. The only hassle is it takes a day or two to send money back to your US checking account, if needed.
I trade, so no bother for me to transfer back to my checking
I’m wondering did you receive a U.S. debit card with this account? I’m a TD customer and have looked into this after a trip to the U.S. traveling across 4 states. Canadian debit cards most often DO NOT work! Thank goodness we also had credit card and cash with us. I hate using credit and wanted to use cash only for emergencies. Ask at the bank and they will say, oh yes your Canadian debit card will absolutely work in the U.S. this is wrong! Great article, very extensive!
@Tamara: No, I did not get a debit card and don’t think they offer it. I ended up applying for the TD U.S. Dollar Visa Card and upgraded my account to the Borderless Plan so I can waive the annual credit card fees.
It makes sense to use cash when you can abroad. If you do end up getting information about a potential U.S. debit card from a Canadian bank, please let us know.
Transferwise recently introduced a debit Mastercard, however, I haven’t looked into it.
Cheers,
Enoch
TransferWise Debit MasterCard is not available yet in Canada
Thanks for this great list. I see Scotiabank USD being advantageous. I believe Wire Inis $15 CAD/USD. But not clear on other fees.
1) How is USD USD pushed/pulled between banks and brokerages?
My understanding is only Wire and PAD allow USD transfers and Wire could cost a lot on sending and receiving end.
I would like to have a USD account to facilitate cross transfers between Questrade, National Bank Brokerage, Interactive Brokers essentially
Can Transferwise act as a Multi Currency Hub to be part of this such that they can hold USD, CAD.
Do they allow for PAD to be setup?
2) Have you considered Interactive Brokers as a Multi Currency Hub?
I read that can do PAD but I believe PAD is always setup as a “Pull” since it is a Debit.
However, can you just set opposing PADs between Accounts to allow Pull both ways?
That way USD/CAD can be initiated.
Canadian banking is kind of frustrating
this was so detailed and helpful!! thank you so much!!
@Rebecca: You are welcome! Glad the information was useful for you!
Hi Enoch, what is most cost-effective way to electronically transfer USD between two USD accounts domiciled in Canada? Ie., how can I send USD to another person in Canada who wants to keep the funds as USD?
All the reviews I read on money transfer apps like TransferWise assume that I want to convert to a different currency, which is not what I want to do.
So far the only electronic option seems to be an expensive wire transfer.
Thanks!
Hello Mr. Enoch Omololu!
Glad to message you again. I noticed you didn’t include Toronto Dominion (aka: TD)
“U.S. Daily Interest Chequing Account”
With:
– Do monthly fee
– Transaction Fee = $1.25 U.S. each
– Minimum monthly balance for no transaction fees of $1,500 USD (aka: Your transaction fees will be $0, as long as balance is $1,500 USD by end of day)
– An interest rate greater than 0%… its 0.01% daily.
This is an ideal for accepting “US Dollar Payments” or Transferring Cryptocurrencies via services that dont accept Canadian Banks and/or if your bank has no SWIFT/BIC number, Like Tangerine or Simplii (like using UpHold to transfer BAT/etc in to fiat & then to your bank (mobile app only supports Canadian banks, AND they must support SWIFT/BIC transfers)
@Jeff: Actually, that’s #1 on the list. 😉
OMG, now I feel a fool
Hi Enoch, I’m a Canadian citizen starting an e-commerce business in the states. I’ll be buying shipments from China and selling only in the U.S. (for now). I will be drawing funds on a U.S. bank account from time to time. Mostly for reinvesting, shipping brokers, Chinese inspections, taxes… I already have my company formed, corporate documents, EIN number…
I want to minimize my expenditures as much as possible by eliminating conversion costs and other banking-related costs as much as possible when withdrawing from Canada on a U.S. account.
On the one hand I am being suggested a “Separate cross-border USD checking account, and you suggest the “TD USD Daily Interest Chequing Account”. Is there a difference between the two?
Is one better than the other, and why?
Please keep in mind that my bank here in Montreal is BMO, and I will eventually have to pay U.S. taxes in the states. Which bank do you suggest? Very grateful for having stumbled on your site!
Best regards always Enoch and thank you!
John K.
@John: For a business like the one you have described that will be doing business primarily in the U.S., I believe a cross-border US account is preferable. You will be able to write U.S. checks, get a debit card you can use to pay for U.S. expenses (as opposed to only a US dollar-denominated credit card), build U.S. credit history for your business, access to cheaper USD bank transfers within the U.S., faster receipts of payments, deposit USD cheques online vs having to go into the branch every time, etc.
I don’t have a cross-border account myself, but I do know tha RBC, TD, BMO and probably CIBC have U.S. operations.
The RBC cross border account allows you to transfer US funds from your US bank (or source) to RBC in Canada. The funds are Not converted to Cdn funds until you transfer them to your US Savings Account also at RBC. You also have the option of holding them as US Funds. I transfer funds from B of A to RBC via my cross border account without issue.
If you need to transfer US funds to a Cdn financial institution or vice versa, you require a 9 digit routing number, and that is precisely what the cross border account has. I discovered all of this info the long way, but it absolutely works. I also received a US debit card and a US credit card with the RBC cross border account. I haven’t used either. The borders remain closed at this writing.