The Canadian dollar is now trading at roughly $0.75 US, so anyone who often visits the US or any other nation that prefers US currency over Canadian money is probably losing money on every transaction.
You may have thought about opening a U.S. dollar account if the expense of currency conversions is restricting your ability to spend.
You can save part of your money in USD for many reasons. One reason is that the US dollar is the most often utilized currency in cross-border trade.
This implies that the US dollar will be accepted when you travel or make transactions abroad.
The US dollar also exhibits less volatility than other currencies since it is a stable currency. Whatever your motivations, there are some advantages for Canadians who maintain US currency savings accounts.
Canadian Bank’s Chequing or Savings Account In U.S. Dollars
You may save money in US dollars via a US dollar savings account. Even in Canada, you may use these accounts to store money and earn interest in US dollars. The problem is only getting mortgages and payday loans Canada in US dollars.
Typically, you’ll need to make a USD deposit into the account using part of your US currency profits. The bank will then keep your funds and use them to fund their USD-denominated transactions.
Almost any Canadian bank will allow you to open a U.S. chequing or savings account. You may conveniently keep and get access to your American dollars with this kind of account.
You could avoid paying the monthly account fee, which typically ranges between $1 and $10, depending on the bank and the amount of money you have in the account.
You won’t ever have to be concerned about converting money at the last minute and being at the mercy of whatever the conversion rate is on that particular day if you do this.
Additionally, paying off a U.S. credit card is simpler with U.S. bank accounts. If you often purchase abroad or online and have a U.S. credit card, you probably acquired it to save on exchange costs.
However, because you must pay for conversion when paying off your U.S. card in Canadian dollars, your savings often need to be recovered.
Additionally, you may deposit American check payments straight into your account rather than having to convert them to Canadian dollars and risk losing money on the exchange rate due to the bank.
Additional Advantages of Having a US Bank Account
Canadian families saved around 3,133 Canadian dollars less in 2021 than the previous year. However, the statistics for that year were much higher than before the COVID-19 epidemic began.
Before then, net household savings in Canada varied dramatically, peaking at 3,725 Canadian dollars in 2013 and falling to 502 Canadian dollars in 2018.
Average value of net savings per household in Canada from 2000 to 2021
The pandemic has taught Canadians how to save. Saving in Canadian dollars is excellent, but the US dollar is the world’s most stable currency and can bring many benefits.
Reduce Your Trading and Investing Costs
You can buy and sell U.S. equities with a U.S.-dollar account and reduce foreign exchange charges since you don’t have to convert currencies for each deal.
If you trade often, you can reduce transaction costs by settling deals in the same coin (for example, buying and selling U.S. equities in U.S. dollars).
More Convenient Ways to Pay US Bills
Paying American bills is simpler by the possibility of faster transfers between Canada and the US when you have a U.S. currency account.
For instance, doing international wire transfers might take two to five business days and sometimes include additional costs.
In addition to a high exchange rate, these costs may include additional fees for sending and receiving money, correspondent fees, and other expenses.
While waiting, you may save penalties by paying your bills online in USD using a USD account at your bank.
Use the Currency Rate to Tour Advantage
Unless you have a USD savings account, you are at the mercy of fluctuating exchange rates between Canadian and American dollars.
When you have access to US dollars, you have the option to switch only when it is in your best interests. You will also diversify your currency holdings.
Drawbacks of American Savings Accounts
To create a USD account, you often have to pass through some hoops, mainly when it’s an online bank.
A savings account in US dollars does not permit bill payment or Interac e-Transfers.
Additionally, fees may be charged for in-branch deposits and withdrawals, and they do not offer mobile cheque deposits. And last, a lot of American savings accounts do not permit ATM withdrawals.
Something to Think About Before Creating a US Savings Account
Instead of establishing a bank account with a Canadian lender, you may wish to do so if you often do business or own property in the United States.
You must apply in person with your passport and at least one additional document, such as your driver’s license, and the application procedure is a bit more complicated.
But these accounts often have even cheaper monthly fees and more excellent interest rates on deposits made in the United States.
Anyone who wishes to do business or own property in the United States must have a credit history, which may be developed without a social security number by opening and maintaining an account with a U.S. institution.
Therefore, do your homework and choose the option that makes the most sense for your circumstances before opening a U.S. savings account in Canada.
There are several opportunities available that let you save US cash in Canada. A US dollar bank account also offers many advantages you can start taking advantage of now.