Yes. As of January 14, 2008, Questrade clients can opt to hold U.S. dollars in their registered accounts.
Yes. All Questrade clients can maintain USD in their registered accounts.
Most registered accounts can directly hold U.S. dollars.
Clients who choose to maintain USD in their LIF, RIF, spousal-RIF, and RESP account can hold USD units (shown as position 763301 on the trading platform) where each USD unit is equal to one U.S. dollar.
The main benefit of being able to hold U.S. currency in an RSP account is avoiding the forced currency conversion fee attached to every trade of a USD security. Previously, RSP accounts could only hold Canadian dollars. Any trade - buy or sell- involving a U.S. security would therefore also involve a conversion to or from CAD. Depending on the amount of trading in the registered account, the savings to Questrade clients could be considerable.
Because our trade platforms are direct access, clients do not have to call in special requests (such as "wash trades") for USD buy or sell orders. This allows traders to react to market movement as quickly as they would in any other Questrade account.
If you have sufficient USD funds in your registered account to cover the trade, there will be no currency conversion. Because Questrade does not permit trading on margin in registered accounts, you must convert sufficient Canadian funds to complete the trade. You will be charged currency conversion only for the amount of Canadian funds you convert. For example, if you have CAD $1000 and USD $1000 in your RSP account and you put in a buy order for $1500 in a USD security, you will incur currency conversion for the portion of the trade not covered by your existing USD.
If you have set your account currency as USD, then the answer is no – there is no currency conversion fee. If your account currency is set at CAD – the default currency – you will incur conversion fees.
Note: there is a $5 commission applied to trades involving buying or selling USD units in RSPs. This is the USD unit commission, and it will only be charged once per day in which you make a trade involving currency conversions. For example, there is no charge if you don't make a currency conversion-related trade; $5 if you make one such trade; $5 if you make ten such trades.
Questrade's market rate is determined at the end of each trading day, and applied to that day's trading activity.
Yes. You can deposit US currency into your registered account from another Questrade account or through any of our approved account funding mechanisms, such as wiring funds or certified cheque. Please visit our
fund an account page for more information.
All Questrade registered accounts can be set up with USD. The default currency for our registered accounts is CAD. To change the currency to USD, login to myQuestrade, our client services portal, click on the My Account tab, and select Currency Settlement from either the drop-down menu or side menu. You will have an option of either CAD, USD or currency of the trade.
Questrade updates settlement currencies at the end of the trading day. If you want the change to take effect the same trading day, Questrade suggests updating your currency before 4:00 p.m. ET. If you want to have the change take effect the next trading day, Questrade suggests updating your currency after 8:00 p.m. ET.
You may assign a different currency to each individual registered account you have at Questrade. At the moment, however, you cannot assign individual settlement currencies to each security within the account. For instance, if you set your RRSP to settle in USD, every trade in that account will automatically settle in USD. In this example, the proceeds from a trade of a Canadian security would be converted to U.S. funds and would be subject to a currency conversion fee. Note that you can have cash holdings in both currencies simultaneously.
When you deposit USD to your registered account, we will use the closing rate of the day to calculate the CAD contributions.
There are numerous definitions for a "wash trade" or sale - so be wary when using this term. In Canada, the generic term comes from the forex world and refers to a trade or sale in which there is neither a gain nor a loss. For some RSP investors and brokerages, this has come to refer to avoiding forced currency conversions when buying or selling U.S. securities in a registered account. The regulatory definition of a wash trade is the illegal buying and selling of shares in one company through different brokers in order to give the illusion of increased activity. The IRS — the U.S. tax agency — refers to a wash sale as the buying and selling of the same security within a certain time frame. This can have serious tax implications to active U.S. traders, and has nothing to do with currency conversion.
As long as you have an active registered account, you can opt to settle trades in USD.
Regulations allowing foreign currencies in RSPs are recent. In 2001, the CRA (Canada Revenue Agency) amended tax laws to allow foreign currency holdings. In June, 2005, the CRA removed the 30% foreign property cap in registered savings plans. On April 1, 2006, the IDA (Investment Dealers Association of Canada), the Canadian financial industry regulator, classified currencies as allowable assets in RSPs. This opened the door for Questrade's USD in RSP.
The legal ability to hold currencies other than the Canadian dollar in registered accounts only came into effect on April 1st, 2006. Before this benefit could be offered to Canadians, a major obstacle was the availability of technology to maintain books and records (clearing capability) in multiple currencies. Questrade has a patent pending process that has made this possible.
In April, 2006, the IDA removed the final hurdle to holding multiple currencies in registered accounts and investors were technically permitted to hold U.S. dollars. However the mechanism to do so was not rolled out, and forced currency conversions remained standard procedure. The legality of forced currency conversion is being challenged in two Canadian courts.
Effective January 1, 2005, there are no foreign property limits in RRSPs or RRIFs. The previous limit of 30% no longer applies. However, self-directed investors must ensure investments qualify for a registered account. Visit the government of Canada's site on content rules and
qualified investments.
The USD $5 commission is only applied to clients who have chosen to have USD maintained in their RESP account.
On any day in which you trade a USD security in your RESP, you will be charged a $5 commission. This is a flat, per-day commission, no matter how many trades are made.
There are three basic scenarios:
- If you select the default currency settlement option of CAD, there will be no USD units purchased or sold and thus you are not charged the USD $5 commission on USD trades. Please note that you will be charged currency conversion fees on any USD trade.
- If you select the USD currency settlement option, you will be charged a USD $5 commission each day in which you make USD security trades. You will not pay currency conversion fees on these trades since no conversion is required. If you trade a Canadian security, any proceeds or cash required will be converted to (from) your USD funds and you will pay a conversion fee.
- If you select the trade currency settlement option (i.e. both USD and CAD), you will be charged a $5 USD commission each day during which you make USD security trades. Please note that you will pay conversion fees if you do not hold sufficient US dollars to buy a U.S. security and Questrade needs to convert the Canadian dollars in your account in order to settle USD transactions. Similarly, if you do not hold sufficient Canadian dollars to buy Canadian securities on any one trading day, you will pay a conversion fee to convert your US dollars to cover the net Canadian securities purchase.
While every RSP account automatically includes the option to settle trades in USD, the default settlement is CAD. Clients must opt in to settle in USD or in the trade currency through myQuestrade.
On December 1st, 2007, Questrade changed its currency conversion fees in RSPs to apply only to the net buy or sell of all USD securities on the day. At the end of each trade day, we calculate the cumulative buys and sells, and only apply currency conversion fees to the net difference.