Originally Posted by Ralph & Paulette
We were very happy with the rate. Our rate on Feb. 12, 2016 was $1.3675CA per US$. Looking at XE history, it says $1.385CA per US$ is the close on Feb 12th, so about 1.25% difference. I know we checked a few other places, I believe including what ETI could get, and they were all in the 3-4% range.
As expected from Vanguard, that looks to be a good rate similar to XE.com .. I believe the XE history is just the mid-market rate, not actual consumer rates we'd get.
I called a broker selling forward contract.
The pros: leverage (10% down), good rate, asset/agreement stays in your name, you can continue to earn with other 90% of funds
The cons: minimum $30,000 USD contract... which may be over what we'd need for Escape, taxable if there are gains, possibly more funding requirement if CAD gets too weak
In the end, I think the best option for me is to open a CAD$ account in foreign country, use XE or similar service to deliver CAD to that account, and then electronically wire money to ETI when time comes.
The pros: asset stays under my name, ability to wire electronically to ETI, low costs of < $100 wire fees, good rate, not much taxable gain possibilities
The cons: CAD$ interest is a measly 0.6% vs 0.9% USD, 100% of funds outlay now to lock in rate
Thanks all for your help!
I know all this may be a headache for some folks, but it's a learning experience for me to understand this possible class of future investments. while minimizing risk and making sure I don't have unexpected gains which could mean losing certain tax-sheltered benefits.