"We think the Canadian Snowbird Associations' Currency Exchange Program is the best and most cost-effective way to exchange $USD and cross-border bank for Canadian snowbirds. Plus we answer some of your questions on cross-border banking."
By: Allan R Kirby
Editorial Note: Mysmallbank.com does not earn a commission and will not accept compensation for the products or services mentioned in the article, this review is of our own opinion.
The best way to cheaply exchange $USD
It's a common question that many Canadians have, where to cheaply exchange Canadian dollars into U.S. Dollars? It's an important question for many Canadians who travel to the USA frequently or live there during the winters because the costs of exchanging money can add up quickly.
Most Canadians will use their local Canadian bank to exchange their Canadian money for U.S. dollars, unfortunately, the exchange rates provided by them are rather poor and can add up even if it's just a few percentages. Additionally, Canadian banks such as Toronto Dominion bank do provide US banking products and services, which can be convenient, but you will pay a high price. TD's Borderless Plan for example requires you to have a hefty $3,000 U.S. minimum monthly balance to have fees waived or you pay $4.95 U.S. monthly. But you will get a break and not pay the annual $39 U.S. fee on a TD U.S. Dollar Visa. This is shockingly high fees just to travel in the USA, but this comes as no surprise as Canadians tend to pay some of the highest banking fees in the world. Additionally, although you can get a better exchange rate with a Major Bank depending on the products and services you are paying for, it's still not the best.
"Canadian Banks do provide products and services for crossboarder banking but you pay shockingly high fees and still do not get the best rates."
Try the Canadian Snowbird Associations' currency exchange program
The Canadian Snow Bird Association provides a lost cost alternative to using the major Canadian banks. It's the most efficient and cost-effective cross-border banking for Canadian snowbirds. The Snowbird Currency Exchange Program lets you transfer funds automatically and/or continuously from any Canadian bank to any U.S. bank every month whether you are in the U.S. or Canada.
How Canadian Snow Bird Association keeps costs low
The program works by pooling the funds each month from members and doing bulk purchase exchange rates. This bulk purchase allows the association to pass on the savings to its members. It's a convenient, proven program that is very easy to use. Plus no international transfer recipient fees will be charged by any U.S. bank where the money is being deposited. This is guaranteed by the association.
Members can send money each month by simply making an email request to have money be sent to your US bank account. Once the request is received the Association will ensure that by the 5th day of the month the money is transferred. So If you travel to the US frequently but want a simple transfer program this is a good program for you. Many retirees and frequent visitors use this program because of its simplicity and savings you will receive overtime.
See Canadian Snow Bird Association Snowbird Currency Exchange Rates
The cost
Now the program is not free and it will cost depending on the type of membership you get. Secondly, the fees are in Canadian not US dollars.
A one-time enrolment fee of $5.00 in the month of your first transfer.
Fees paid based on membership:
CSA Lifetime Members - Monthly transfers are FREE.
CSA Members - $2.00 each month a transfer is made.
Non-CSA Members - $5.00 each month a transfer is made.
First and foremost we believe this is a better program over the long term. If you travel frequently and tend to exchange money regularly, buying the CSA lifetime membership will pay for itself, usually within a 5 to 6 year period. This is based on my own experience of using the program and regularly exchanging money.
The caveat with the program
One problem with the program is you will be required to have a bank account with a US-based bank. However, this is not a problem because it's not difficult for a Canadian to open an account with an American bank. Don't be fooled, it's not overly complicated nor does it cost a fortune. Most major American Banks such as Bank of America and even the larger regional banks are very accommodating to Canadian customers. In fact Key bank, a large regional bank that has branches along the Canadian border does allow Canadians to open up Accounts. Their Checkless chequing account has no fees and no minimum deposits and the Canadian Snowbird Association works with this Bank.
Consider US banks for your banking Solutions
Cross-border banking services are critically important to many Canadians who frequently visit the USA. Using Major Canadian banks might be convenient but you pay a fortune to use their banking services. Opening a U.S. Bank Account and having the Canadian Snowbird association exchange the money for you and depositing it into your account can be affordable and convenient.
Some additional Benefits
Canadian Snow Bird Association does have additional benefits such as travel insurance, events, news magazine, and other resources. They are a great resource to learn more about issues faced by Canadians who frequently travel and work in the USA, such as taxes. I know of many people who have benefited from the Associations articles and information.
Final Thoughts
It's ultimately left up to you the consumer to choose how you want to cross border bank. I have used both Canadian banks for cross-border banking as well as the Canadian Snowbirds associations currency exchange program in conjunction with a U.S. Bank. There are no questions it's significantly cheaper using the latter and I have never had any issues or tax problems. In fact, I have had one or two transactional issues with my American bank resolved very easily. Sometimes it's simply easier to deal with a US-based bank when living in the USA instead of a Canadian bank.
I have added several Questions and Answers to this article to hopefully help answer some questions you may have. If you have additional questions please let us know.
Learn more about exchanging Canadian for U.S. Dollars
Where can I get the best exchange rate for US dollars?
For people who frequently travel or live in the USA during the winter season, the Canadian Snowbird Association has the best exchange rates for US dollars. Their rates are much better than the major banks. To see the best rates for the Canadian Snowbird Association Click here
Which Canadian Bank Has The Best Exchange Rate?
Generally speaking, we do not find Canadian banks provide the best exchange rates, even if you are a preferred customer, rates are not as good as the Canadian Snow Bird association. Their rates for lifetime members is unmatched and they do not add any fees to their exchange rate except for the following;
The following fees will be charged to your Canadian account by the Canadian Snowbird Association if you chose to use them :
A one-time enrolment fee of $5.00 in the month of your first transfer.
CSA Lifetime Members - Monthly transfers are FREE.
CSA Members - $2.00 each month a transfer is made.
Non-CSA Members - $5.00 each month a transfer is made.
The best part is there are No international transfer recipient fees will be charged by your U.S. bank.
How do I get money from my Canadian bank to a US bank?
One of the easiest methods to exchange and send money from your Canadian account to your US bank account is to use the Canadian Snowbird Association. However, one caveat is you need to have both a Canadian and US account to make this happen, which is relatively easy to do. Most Canadian's assume it's a difficult process to open an account with a US bank, however it is not. It can be relatively seamless especially with larger national banks, Bank of America (bankofamerica.com), large regional banks that are close to the Canadian border such as Key Bank (Key.com).
The following fees will be charged to your Canadian account by the Canadian Snowbird Association if you chose to use them:
A one-time enrolment fee of $5.00 in the month of your first transfer.
CSA Lifetime Members - Monthly transfers are FREE.
CSA Members - $2.00 each month a transfer is made.
Non-CSA Members - $5.00 each month a transfer is made.
The best part is there are No international transfer recipient fees will be charged by your U.S. bank.
Can a foreigner open a US bank account?
Yes a person who is not a US Citizen but often travels, works, or studies in the US can open a bank account in the US. However, the process to open the account requires the individual to be physically at the bank. Each bank and credit union has its own set of rules so do not assume the process will be the same for each bank.
For example, some banks will ask for your U.S based residential address and possibly even verification that you reside there such as a bill with your name and address on the bill. Others may require verification that you are allowed to work and study in the USA but again, not all banks will ask this.
Additionally, even if you can successfully open a bank account, you will likely not be able to use online banking because the online banking rules in the USA requires that you must have a Social Security Number (SSN) or an ITIN for foreigners.
W-8BEN
You will be required to fill out the following form for the bank if you have a U.S.-based account, its called the **W-8BEN** - Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (**Individuals** (https://www.irs.gov/pub/irs-pdf/fw8ben.pdf))
Can a foreigner open a US Bank account on-line?
No, Generally speaking, you will not be able to open an account online with a US-based bank unless you have a Social Security Number (SSN) or an ITIN for foreigners.
Call the Bank for details
It is best to contact a bank to find out the requirements for opening a bank account if you do not reside in the USA. Canadian residence will find it relatively easy to open a bank account in the USA with some basic information such as a Passport and driver's license. You may not even be required to provide a US residential address, a suggestion would be Key Bank and Bank of America, both are good with Canadian residence.
Can a Canadian open a US bank account?
Yes, a Canadian who is not a US Citizen but often travels, works, or studies in the US can open a bank account in the US. However, the process to open the account requires the individual to be physically at the bank. Each bank and credit union has its own set of rules so do not assume the process will be the same for each bank. Additionally, even if you can successfully open a bank account, you will likely not be able to use online banking because the online banking rule requires that you must have a Social Security Number (SSN) or an ITIN for foreigners. Always call the bank in advance to find out what the process is for opening an account for a U.S. non-resident. It also never hurts to shop around to see which bank also provides services with low to no-fee banking. Unlike Canada, the U.S. banking industry is much more competitive and it's not difficult to find a bank with no fee, no minimum account requirements such as Key bank.
Most Canadian's assume it's a difficult process to open an account with a US bank, however it is not. It can be relatively seamless especially with larger national banks, Bank of America (bankofamerica.com), large regional banks that are close to the Canadian border such as Key Bank (Key.com). You will need to have your Drivers' license and passport available to verify your age, name, and residency. However, some banks may also require you to provide a US address and you may be required to have an ITIN (Individual Taxpayer Identification Number).
Tax implications for Canadians With US Accounts
Your bank will require you to fill out a W-8BEN – Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding. This form is required and it is beneficial for you to fill out because if you have a bank account with a U.S. bank, the interest earned from the account could end up with a 30% tax on any interest earned on your deposits withheld and sent to the IRS.
Can I get a checking account without a U.S. social security number?
Yes, a Canadian can open up an account with a U.S. bank without having a social security number to open a checking or savings account. However once you do open up an account with a U.S.-based bank, you will likely not be able to use online banking because the online banking rule requires that you must have a Social Security Number (SSN) or an ITIN for foreigners.
This is a MySmallBank.com blog written by Allan Kirby, who writes and produces Personal Finance and Money Management articles and videos.