How to hedge exchange rate?

[LatLongJohn]

Originally Posted by LJY

Wow, 3 basis points.. that's like no fee. but i'm sure they are making in other wealth management areas

Inspired by you, I did some additional search for US banks that offer foreign currency accts. To my surprise, there's a handful of them now! I'm glad we are making progress as a country.

For those that want a CAD$ account, look at the online bank EverBank.com, I'm really impressed by their offering/rates, and straight forward disclosures. Very unlike traditional banks.
EverBank offers no interest for CAD$ acct currently. You can choose to use XE to wire CAD in..or use Everbank to exchange. They said the acct is free of charge and the exchange cost is 0.75% of their exchange rate which sounds lower than XE... but they aggregate all requests from their customers to exchange once per day to try to get better rate. And their outgoing international wire is just $30 (free incomings) or we can choose to ask for a bank check/draft in CAD$ for free. If there's anything else I've missed please share the info with the rest of us.

I'm glad that so many people have so much confidence in ETI.. it sounds like a great company and great people. However, in my experience, the key/secret of why dealing with smaller businesses is so risky is that small company is so dependent on the health and well-being of its owners. This is the inherent risk of dealing with smaller companies.

Hi - thanks for the tip about EverBank! We've ordered a 5.0TA which won't be ready until the middle August, 2017. I decided to check out EverBank and it's as good as you mentioned (great security, transparency, customer service, etc.). I set up a checking account and a World Market (Canadian currency) account. You simply do an external transfer from your current bank to EverBank and then do an internal transfer to the Canadian currency account. If you're a new online customer, they make you wait 3-5 business days from the time you have money in the checking account before that money becomes available to the internal transfer. However, I found if you call their World Currency department directly, they can do the transfer to Canadian right then and there. Very Cool! We'll save up the amount needed to pay for our new trailer and then have Everbank cut a check (in Canadian dollars) when the time comes for ETI to get paid. Very slick! Thanks again!
John

[Zardoz]

I bought a bunch of FXC shares that I'll have had over a year when we pick up our trailer next October. That brings the US taxable rate down from "income" to "capital gains." In our income bracket (virtually none), that's a max of 15% on what very little I expect to gain (or a comparable offsetting loss for the next year). While some additional fluctuation is certainly possible, I don't anticipate a seismic shift in either the Canadian or U.S. economy (unless of course the unthinkable happens in the November elections ).

[Mandomary]

I'm thinking of paying off my escape before the election (delivery in December). Don't know what to expect

[Greg A]

Pretty good rate today, I'd just lock it in, pay it off, be happy and not worry about things you can't control.
We averaged close to 30%, but two months later it went over 40%. I didn't care, the rate I got was better than the 20% when I ordered.

[Tom and Gay]

I looked into several options and found a local bank with good people and service so far. Cathay Bank has similar exchange cost ((0.75% if over $10,000) and wire fees. They have few locations but if you're close to one and prefer seeing who you're talking to, it may be worth checking out.

[Losangeles]

we are in Los Angeles

We have some USD in a USD account at a Canadian Bank

and we also have a CAD account at the same Canadian Bank.

When I transfer $ from USD to CAD - inside the same bank - via their banking website - today, right now, they are offering a rate of 1.2857

when XE says the closing rate is 1.329

and both Google and also Bank Rate of Canada say about the same thing. about 1.329.

all measured at exactly the same time.

So our Canadian Bank is dinging us for about 4%

this seems very high.

anyone have any advice?

My plan was to wire USD to my USD account at the bank in Canada, but if the Canadian bank is going to soak us for 4% every time we internally transfer USD to CAD (inside the same bank), that is crazy.

thanks for any ideas / easy solutions.

[rbryan4]

Originally Posted by Losangeles

we are in Los Angeles

We have some USD in a USD account at a Canadian Bank

and we also have a CAD account at the same Canadian Bank.

When I transfer $ from USD to CAD - inside the same bank - via their banking website - today, right now, they are offering a rate of 1.2857

when XE says the closing rate is 1.329

and both Google and also Bank Rate of Canada say about the same thing. about 1.329.

all measured at exactly the same time.

So our Canadian Bank is dinging us for about 4%

this seems very high.

anyone have any advice?

My plan was to wire USD to my USD account at the bank in Canada, but if the Canadian bank is going to soak us for 4% every time we internally transfer USD to CAD (inside the same bank), that is crazy.

thanks for any ideas / easy solutions.

Why not just send a check to Escape in USD? Their bank offers a favorable exchange rate when the funds are converted upon deposit. We did that, and it was hassle free.

[thoer]

I've sent all the Escape wire transfer info to my local credit union. For only the wire transfer fee they'll do an international currency wire transfer to Escape's Canadian bank. Escape's accounts manager recommended this method to me, she said the exchange rate comes out much better that way than wiring it to Escape's US$ bank and having them do the exchange.

[gbailey42]

Don't know if this has been mentioned but if you open a Canadian bank account that has a value of over 10,000 at any point you will need to file an FBAR due April 15, 2017.

[Calbal]

Received confirmation today Escape received our $25,000 payment via wire transfer. Easy Peasy! US Bank charged us a straight $50 fee plus a few extra little things from Escape's middle man bank (Citizens). We are beyond happy! Much more comfortable with that method rather than sending a check through the mail and waiting, waiting, waiting . . .

[Donna D.]

Canadian dollar is 75 cents US right now.

[freespirit]

Originally Posted by thoer

I've sent all the Escape wire transfer info to my local credit union. For only the wire transfer fee they'll do an international currency wire transfer to Escape's Canadian bank. Escape's accounts manager recommended this method to me, she said the exchange rate comes out much better that way than wiring it to Escape's US$ bank and having them do the exchange.

your actual wire transfer amount is in US funds (somebody else told you the US amount to wire when converted to US) ? or does your credit union convert it to canadian 1st then do the wire transfer?

[rbryan4]

Originally Posted by Calbal

Much more comfortable with that method rather than sending a check through the mail and waiting, waiting, waiting . . .

It is about your comfort level. But, in our case, the wait was 5 days, from the date we sent the check, to the date Escape received it. And no wire transfer fee.

[LJY]

Originally Posted by LatLongJohn

Hi - thanks for the tip about EverBank! We've ordered a 5.0TA which won't be ready until the middle August, 2017. I decided to check out EverBank and it's as good as you mentioned (great security, transparency, customer service, etc.). I set up a checking account and a World Market (Canadian currency) account. You simply do an external transfer from your current bank to EverBank and then do an internal transfer to the Canadian currency account. If you're a new online customer, they make you wait 3-5 business days from the time you have money in the checking account before that money becomes available to the internal transfer. However, I found if you call their World Currency department directly, they can do the transfer to Canadian right then and there. Very Cool! We'll save up the amount needed to pay for our new trailer and then have Everbank cut a check (in Canadian dollars) when the time comes for ETI to get paid. Very slick! Thanks again!
John

Glad you found it helpful.. they are really different bank than what I see at other banks. Maybe that's why TIAA bought them. Hopefully, TIAA will merge the pro's into the bigger company.

[War Eagle]

Originally Posted by Calbal

Received confirmation today Escape received our $25,000 payment via wire transfer. Easy Peasy! US Bank charged us a straight $50 fee plus a few extra little things from Escape's middle man bank (Citizens). We are beyond happy! Much more comfortable with that method rather than sending a check through the mail and waiting, waiting, waiting . . .

In our situation, we're making a series of smaller payments over time, and we tried wire transfer first. But the several processing fees imposed by financial institutions along the way was annoying. Since then, a 10 cent envelope and a $1.15 international first-class postage stamp has worked just fine for us. There is always a danger that the exchange rate might change against us while the check is in the mail for 4 to 5 days. But so far, small changes in exchange rates have actually been in our favor. We budgeted hoping for an average .78 exchange rate over time, and now, 3/4 of the way through, we're averaging closer to .76. That difference is enough to add a couple more options and still stay in budget!

[escape artist]

Originally Posted by Donna D.

Canadian dollar is 75 cents US right now.

Hi: Donna D... For us the "Loonie" is still a buck and an Escape is a lot of doe!!!
What hurts is going south we must add the exchange to all purchases... even groceries. Alf
escape artist N.S. of Lake Erie

[War Eagle]

Originally Posted by freespirit

your actual wire transfer amount is in US funds (somebody else told you the US amount to wire when converted to US) ? or does your credit union convert it to canadian 1st then do the wire transfer?

Our credit union would do it whichever way we wanted, convert to Canadian on site then send, or send in US and let someone else convert along the way (where they may not have your best interest as their top priority). If you are afraid the exchange rate will go against you in the next 4-5 days, it would be best to convert as soon as possible. Other than that, it's pretty much a wait-and-see guessing game until ETI posts the final conversion for that particular payment on the last page of your updated build sheet they e-mail back to you.

[parfsten]

I've used XE Money Transfer for transfers of funds to Sweden... eezy peezy and now they offer no fee transfers.

[float5]

Credit unions are generally much better as far as lower fees.

If you add other places, such as another bank in between your money and Escape receiving it, you will have more fees as someone above found. The idea is to get your money there with as few places in between as you can because they all want their fees. Also, if you have to file a form for having more than $10,000 in a Canadian bank, that is another consideration.

We mailed cashier's checks (but we had no fee for such checks. You can send a personal check in many cases but the rate might be changing as it takes time to clear.) FedEx charges about $44 and it is there in a day if you do not want to wait for the mail. The only reason we did not use the regular mail was because the dollar happened to be starting to go against us when we made a payment, but it then went in our favor.

If you are not picking up your Escape when completed, ETI will expect to have full payment by then. We picked up and paid the last few thousand at pick-up. That was in cashier's checks. That is also a problem at the border. They may ask if you have more than $10,000 (we did not) and they are including such checks under cash, so you would have to declare them. That could delay you.

So you have to look at all of these different situations.

[LJY]

An update for those who used Everbank:

I just completed the last exchange request from USD to CAD this week. It looks like the cheapest way to get money from Everbank to ETI is via wire for $30 USD (I was told $15 for a manual check when I signed up). And, we can request the wire transfer from the web site.. very easy.. just slightly more costly than originally planned.

p.s. remember to wire in CAD currency