Many Canadian individuals and businesses deal with the US Dollar (USD) on a regular basis. Any Canadian who frequently deals with USD knows that it can be a muddy experience.
Most banks charge a high markup percentage when converting currency, in order to make a profit from your transaction. On top of that, when using your credit card to pay in a different currency, many banks charge you around 2.5% extra.
Worse still, if you ever get paid in US dollars, then you can end up converting money from USD to Canadian dollars when you receive payment and then back into US dollars when making a USD purchase.
To try and leave problems like these behind, many banks in Canada are introducing US Dollar accounts. These accounts aim to simplify cross-border banking, but just how helpful are they? We take a look at CIBC US Dollar Accounts here.
How Many Types Of CIBC US Dollar Accounts Are There?
CIBC is one of Canada’s most popular banks. CIBC currently offers two different types of US Dollar accounts to Canadian individuals. In this post, we’re going to examine CIBC US Dollar Personal Accounts and CIBC Bank USA Smart Account.
CIBC US Dollar Personal Account
A CIBC US Dollar Account can be opened by anyone, regardless of whether they bank with CIBC or not. Opening this type of account is free, there is no minimum balance requirement and account holders can earn 0.25% interest, regardless of their account balance.
However, this account is really only recommended to be used as a savings account for those who wish to keep their savings in $USD. There is a charge of US$0.75 per transaction – including cheques, withdrawals, bill payments and debit purchases.
CIBC Bank USA Smart Account
This account is designed for use by people who frequently travel to or make payments to the US. It is undeniably a convenient way to move money between Canadian and US accounts – but can be expensive.
For a monthly fee of US$4.95, you can make up to 12 debit transactions. After 12, it costs US$1.25 per transaction – until you make 20 and after that it is free once again. Keeping your balance above US$3000 for the entire month, means the monthly fee is waived.
When exchanging currency from CAD to USD (or the other way round) with this account, you will be converting at the selling rate that CIBC offers. Banks never charge the actual live Foreign Exchange rate when converting currencies.
Like most banks, CIBC charges a markup on currency exchange to make a profit on your transaction. While not unreasonable, these fees can often be unfairly high with most banks – sometimes as high as 4%.
Is There A Better Way To Make USD Transactions?
To avoid unfair transaction fees and poor exchange rates offered by banks, you should consider using a Money Service Business (MSB) who are equipped with the latest technology and global payment capabilities. Here at REMITR, we offer the best service available to Canadian businesses and individuals to both send and receive money in USD.
Sending Money: With REMITR Payments, you can send money to the US (and over 150 other countries) for as little as $5 per transfer. That’s it! Your days of stressing over exorbitant bank wire transfer fees are over. We also ensure your transfer ia processed in just 1 business day.
Receiving Money: When you sign up for REMITR Collect, you receive a free REMITR Global Account. This account allows you to receive payments from US customers in US Dollars for free. Yes, for free! You have the ability to withdraw funds from the REMITR Global Account to your own local bank account in Canadian dollars at any time you wish.
Here at REMITR, we use the best live exchange rate to ensure you don’t lose any money on currency conversion from USD to CAD or CAD to USD. All REMITR services are available 24/7, meaning there is no more dreaded trips to the bank or restricting banking hours.
Our platform is a 100% secure, FINTRAC-registered service that employs state of the art technology to protect your payments and financial information.
Time is money, save them both by getting in touch with REMITR today.
Note: The products described here are provided by CIBC in Canada. REMITR does not purport to represent CIBC in any manner. The information presented here is an independent analysis of the products and benefits as gathered from their website. Readers are advised to use their own discretion while using this information.