Currency Conversion - Revisited

When we bought the first property, we used Custom House...a currency exchange company. That worked well. Later they were acquired by Western Union, but I assume it still works pretty much the same way.

Since then, another option has become available: online currency exchange accounts.

We have set up an account with XE.COM, which I believe is run by Custom House. The account can be set up online, although there are steps (as you can imagine) where you need to scan/send them copies of supporting documents to prove you are who are say you are. It probably took a week or so to get it completed.

You link your Canadian and US bank accounts to the XE account. Then, when you want to transfer funds, you log on to XE, get a quote, and initiate the transaction online. Funds can be taken from your source account by EFT, or by Wire (which turns out to be an alias for "bill pay"); and they can be deposited to the target account by EFT or by Wire (which really does mean wire).

That's what we did for this property. The only hassle was a limit of $10K for EFT transactions...which I believe is actually a source bank limitation. We probably could have gone through steps to change the limit, but we just transferred the cash in $10K increments over a few weeks...which also meant some smoothing of the exchange rate.

Speaking of exchange rate...I don't know what the actual algorithm is, but it felt like we were paying about 1.2 or 1.3% for currency conversion using XE. I believe the banks are 2-2.5%.

If you don't have a US bank account, you could probably wire directly from the XE account directly to the Title company.