Readers know that I’ve been critical of Questrade’s customer service but Questrade’s move to allow investors to hold US dollars in their RRSPs should be applauded as a bold move with RRSP season just around the corner. Rob Carrick writes in The Globe and Mail today that Questrade will allow investors to deposit US dollars directly into the RRSP account, use it to purchase US stocks and settle in US dollars, all for a small extra fee of $5. Questrade’s latest move is a vast improvement over the wash trade capability offered by TD Waterhouse.

This article has 26 comments

  1. Thanks for this info CC.

    This is great news for me! As I’ve mentioned previously, my salary is paid in USD and I cringe to exchange at current rates, only to deposit a fair amount into my husband’s RRSP account.

  2. Canadian Capitalist

    telly: I think this is great news as well though I won’t be running back to Questrade after my experience with them. It will force the big boys to be competitive. Rob Carrick writes in the same column that RBC and TD are planning on USD RRSP accounts. Now, it’s only a matter of time…

  3. This is a great move for Questrade – I’ll be posting about this tomorrow.

    I feel sorry for them however – regardless of their strengths/weaknesses they were the ones who introduced low commissions to Canadians only to the see the big boys lower some of their commissions which is enough to keep most investors who don’t want to move.

    I’m sure all the other brokerages will eventually offer this service too.

    Thanks for pointing out the $5 fee – I missed that when I first read the article.


  4. Does anyone know if it’s a) possible and b) if there is a transaction fee involved in purchasing mutual funds (i.e. buying TD e-funds within a Questrade account)?

  5. Not sure Telly – I thought you had to phone for that which means an extra fee?

    I’m going to be transferring my LSIFs mutual funds to Questrade soon so I can avoid the $50/yr fee at TD Waterhouse.

  6. Canadian Capitalist

    telly: TD e-Series funds are available only through an online TD Mutual fund account or through TDW. You won’t be able to purchase TD e-Series funds through any other online brokerage account.

    Mike: You’re right that the banks wouldn’t have lowered commissions if not for the pressure by the smaller online brokers. We were stuck at the $25 to $29 range for so many years.

    Currency fees are really bad. Just the other day, I sold about $11K worth of US stocks to buy VTI. If there were no wash trades, the conversion alone would have cost $350.

  7. Thanks for the info CC.

  8. Wow! This is huge news. Thanks for the update CC.

  9. Phil: The spread is over 2% now. H&R Reit’s yield is ~7.8% currently. Interactive Broker’s margin rate is ~5.75%.

  10. I think Questrade lost out because of their customer service issues, not because of the big banks. I know a few people like myself who were just getting started and knew they didn’t like the banks, but couldn’t get responses or answers from Questrade, and saw negative reviews here and in newspapers, so we avoided it.

    That said, I went with Qtrade (very happy with them so far) and I sent them an email letting them know I’d love for them to copy this idea.

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  12. Great news! Since I have never had to sell my US securities and don’t plan on doing so I probably won’t switch from E*Trade just yet. Hopefully E*Trade will offer this soon along with all other brokers.

  13. Cross the River

    Service is still bad. Sorry, can’t seem to be positive on this topic.

  14. Canadian Capitalist

    Steve, Cross the River: I totally agree with you. I did give Questrade a try and it didn’t work out well. I’d be very wary of switching my RRSPs to them now when in a few months, the big boys will match this move.

  15. The big boys must be grinding their teeth about this move. Currency conversion charges are like mutual fund MERs – invisible to most investors.

    I’m sure they are going to wait and see if they lose many customers before going ahead with it.


  16. Perhaps to encourage the big boys, we should be calling them up and inquiring about the procedures of moving our accounts from them to others because of this.

    You don’t have to do it, but the inquiry alone should help keep the fire lit.

  17. Been waiting – that would be a waste of time. The banks will look at money going out and that’s the only thing they will look at when they do their strategy. Phone calls mean nothing.


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  19. CC: Just an fyi..
    I found out last week that TD efunds can be purchased with USD within TD Investment RRSPs. This works out really well for regular TD efund contributions (i.e. TD US index US$) within an RRSP with eventual “conversion” to ETF at Questrade without the forex fees.

    Maybe others were already aware of this but I sure wasn’t. Making regular contributions from my TD Borderless account makes a lot of sense for us at this time.

  20. I think it’s safer to wait for the big guys like TD to begin offering USD in your RSP instead of going to Questrade.

    [the rest of the comment was deleted by the webmaster.

    While we encourage vigorous discussion, we cannot allow personal attacks or allegations.]

  21. I’m considering transferring my to a Questtrade account to take advantage of holding US fund.

    Can anyone advise on their experience with Questrade or suggest any of the big banks who may be near to offer the same service.

  22. Dragging up an old post here, CC, but I guess our optimism that the big brokerages would soon offer USD RSPs was misplaced. Nobody seems to be in a hurry to offer them.

    I guess our best bet is still TD, since they are large and well operated, and the process of wash trades is largely automated. I find the extra step of calling E*Trade Canada the next morning to have the exchange rates manually matched to be annoying. I may switch to TD just to avoid that annoyance.

  23. TD has not automated the process of wash trades yet. You still have to call them for both a buy and sell order. they plan to offer this automation by the first half of 2009

  24. I have been been unable to get in contact with Questrade. I have tried for a few weeks with phone calls and e-mails but no response. Even if I did eventually get in contact with them I am not sure I would place any money in a company that operates in this manner it is a complete joke. I wish there was an alternative.

  25. Pingback: RBC Direct Investing to allow U.S. Dollar Registered Accounts | Canadian Capitalist