When it comes to managing finances, having a US dollar account can be a helpful tool for Canadians who frequently deal with American currency. In addition, Canadians may want to hedge against the Canadian dollar by owning USD. Whatever the case, we're going to dive into some of the best USD accounts in Canada today.
With so many options available, it can be challenging to find the best US dollar account in Canada. Let's discuss some items surrounding US accounts, explore some of the top options available and cover a few details for each.
Top USD account providers in Canada
When it comes to opening a US dollar account in Canada, there are many options available. Here are some providers to consider:
- EQ Bank - US Dollar Savings Account
- Tangerine - US Dollar Savings Account
- TD Bank - TD US Daily Interest Chequing Account / TD US Borderless Plan
- Simplii Financial - High-Interest USD Savings Account
- CIBC - USD Personal Account
- Scotiabank - US Dollar Daily Interest Account
- BMO - USD Premium Rate Savings Account
- National Bank of Canada - US Dollar Progress Account
EQ Bank - US Dollar Savings Account
EQ Bank offers the US Dollar Savings Account, a high-interest savings account.
- EQ Bank US dollar account offers $0 monthly fee
- High-interest savings account
- Free USD to USD transfers within Canada
- The advantage of being a digital bank is that no visits to a branch are needed
- Conversion calculator providing real-time conversion of your funds from USD to CAD or CAD to USD
Tangerine - US Dollar Savings Account
Tangerine Bank offers the US Dollar Savings Account. No fee and no minimum balance required.
- $0 monthly fee
- No minimum balance is required for the Tangerine US dollar savings account
- Earn interest on your balance
TD Bank - TD US Daily Interest Chequing Account / TD US Borderless Plan
TD Bank offers a variety of US dollar accounts, including the TD US Daily Interest Chequing Account and the TD US Borderless Plan. Let's look at a few details for both bank accounts:
TD US Daily Interest Chequing Account
- $0 monthly fee
- Earn interest on every US dollar, calculated daily
- $1.25 USD transaction fee per transaction
- Minimum monthly balance of $1500 USD to get no transaction fees
TD Borderless Plan
- $4.95 USD monthly fee
- $3000 monthly balance to get monthly fee rebate
- Unlimited transactions per month
- Annual fee rebate of $39 USD for a TD US Dollar Visa Credit Card
- TD offers a variety of cross-border banking services for people living in the US part-time or just visiting to shop or for business or leisure. All combined through the handy TD banking app.
Simplii Financial - High-Interest USD Savings Account
Simplii offers a high-interest USD savings account as well, similar to Tangerine.
- No monthly fee
- Simplii is a digital bank, so it is easy to open accounts from your home
- No minimum balance required
- Earn interest on your balance
CIBC - USD Personal Account
CIBC offers the USD Personal Account with a tiered interest rate and no monthly fee, but they do charge per transaction. It's not the most optimal account, however if you're a stickler for big banks, it's one you could consider. Here are some details on the CIBC US dollar account:
- $0 monthly fee
- $0.75 USD fee each for transaction
- Earn interest on your balance
Scotiabank - US Dollar Daily Interest Account
Scotiabank's US dollar account is the US Dollar Daily Interest Account. Here are some highlights of this account:
- $1.00 USD per month fee, avoidable by having a $200 US minimum daily closing balance
- 2 free debit transactions per month. Additional transactions are $1.25 USD each
- Also offers a tiered interest rate on the daily closing balance
BMO - USD Premium Rate Savings Account
BMO requires that you visit a branch if you want only the USD Premium Rate Savings account. If you are currently a BMO client, this addition can be done easily online and without any additional monthly fee for the USD Premium Rate Savings account.
This is one of the more basic USD accounts. However, it still does have some perks.
- Earn daily interest on every dollar
- Share transaction limits with your chequing account, if also a BMO account
National Bank of Canada - US Dollar Progress Account
The National Bank of Canada offers the US Dollar Progress Account. Below are some key points:
- You can earn interest, but there is a minimum $5000 balance required.
- Must visit a branch to open this account
Why open a USD account in Canada?
For Canadians who frequently deal with US dollars, opening a US dollar account in Canada can be a smart move. With a US dollar account, you can easily deposit, withdraw, make bill payments, and transfer US dollars without worrying about currency exchange fees, which can chip away at your savings.
Most major Canadian banks, including TD Bank, RBC, and Scotiabank, offer US dollar accounts, along with many of the digital banking companies like Equitable, Simplii, and Tangerine.
These accounts can be opened either as a separate account or as a sub-account of your existing Canadian dollar account.
You might need to shop around. Depending on what province you are in or if you are the age of majority in your province, it could impact your eligibility for these types of accounts:
- Savings accounts: These accounts typically offer interest on your deposits and are a good option for those who want to save US dollars and earn some interest on their balance.
- Chequing accounts: These accounts are designed for day-to-day transactions and usually come with a monthly fee. However, they offer features such as debit cards and online banking. This will likely be more appealing to regular visitors and frequenters of the United States.
- Investment accounts: For those looking to invest their US dollars, investment accounts can be a good option.
It's also important to consider the fees associated with any US currency account. Some banks may charge monthly account fees, transaction fees, or foreign exchange fees.
It is important to compare different banks and account types to find the best option.
Key features of USD accounts
When looking for a US dollar account in Canada, it is important to consider the key features affecting your finances. Here are some things to keep in mind:
If you intend to open a savings account, the interest rates can vary widely, so people should consider those. Also, sometimes cash cannot be withdrawn or deposited from these accounts. They don't operate like chequing accounts.
Interest rates are an important consideration when choosing a US dollar account. Some accounts offer higher interest rates than others, so it is important to compare rates to find the best option for your needs.
Keep in mind that interest rates can change over time, so it is important to stay up-to-date on any changes that may affect your account, like promotional rates you qualified for but have run out.
Fees can vary between different US dollar accounts. Some accounts charge a monthly fee, while others do not. Some accounts also have minimum balance requirements that must be met to avoid fees.
It is important to carefully review the fee schedule for any account you are considering to ensure that you understand all of the fees that may apply.
It is highly likely you find cheaper fees at digital banks like Equitable and Tangerine. I, for one, swapped to Equitable Bank last year and am saving a considerable amount of money relative to my traditional bank I used to go to.
Transaction details are critical to look at with any bank account. These fees can add up in a hurry if they are charged.
Some accounts may offer unlimited transactions, while others may have limits on the number of transactions you can make each month. It is important to consider your transaction needs when choosing a US dollar account to ensure that you choose an account that will be the most cost-efficient, as most of them are structured differently and will suit different people better.
Exchange rates can have a big impact on the value of your US dollar account. Some accounts offer better exchange rates than others, so compare rates to find the best option.
Remember that exchange rates can fluctuate over time, so it is important to stay up-to-date.
Benefits of USD accounts
For Canadians who frequently travel to the United States or conduct business in US dollars, having a US dollar account can be a practical and convenient choice. Here are some of the benefits of opening a US dollar account in Canada:
Hold USD directly
US dollar accounts offer several advantages over traditional Canadian dollar accounts. One of the most significant benefits is that they allow you to hold US dollars directly, which can help you avoid currency conversion fees when you make purchases or receive payments in US dollars.
Some places offer decent exchange rates anyway, but costs incurred from exchange rates can depend on how often you are crossing the border or dealing in USD.
For myself, a US bank account is super handy for not carrying so much physical cash when I am travelling in the US and not having to be constantly converting money back and forth from Canadian dollars as I move between the two countries.
For those who frequently visit the US, a US dollar bank account makes a lot of sense. People then just have to pick the account that has the least amount of costs associated with its use or has some other perk that makes sense for their unique situation.
Most banks offer a USD debit card that can be used to make purchases in the United States and withdraw cash from ATMs.
Some banks may charge a fee for using an ATM outside of their network, so it is important to check the terms and conditions before using the card.
Overdraft protection is a service that allows customers to link their US dollar account to another account, such as a CAD account, to cover any overdrafts.
This can help customers avoid costly overdraft fees, all while still allowing them to make purchases if they forget to top up their balance.
This isn't a feature I'd suggest people utilize frequently, but is handy for last-minute emergencies.
Bank drafts are a secure way to make USD payments or transfers. Customers can request a bank draft from their bank, which will be drawn from their US dollar account and sent to the recipient.
Many Canadian banks have partnerships with US banks, which allow their customers to make ATM withdrawals without incurring any fees.
It is important to check with your bank to see which ATMs are in their network, as the out of country fees can be quite high for ones that aren't.
US Dollar credit cards
A USD credit card can be a convenient way to purchase in the United States and avoid currency conversion fees. Some banks may offer rewards or cash-back programs for USD credit card purchases.
Easy to open
Opening a US dollar account in Canada is typically straightforward. Many banks and credit unions offer US dollar accounts, and you can often open one online or in person with minimal documentation.
Drawbacks of USD accounts
While USD accounts can offer many benefits, there are also some drawbacks to consider before opening one.
Some US dollar accounts may come with monthly maintenance fees, which can add up over time. Because these are niche type accounts, banks tend to charge more for them than a traditional CAD chequing account.
It is important to carefully review the fee schedule before opening an account to ensure that the fees are reasonable and will not eat into your savings, and whether or not the fees are even worth opening the account for.
Foreign transaction fees
When using a US dollar account for transactions in a foreign currency, there may be additional fees charged by the bank.
These fees can vary widely and may be a percentage of the transaction amount or a flat fee. It is important to understand these fees before using your US dollar account for foreign transactions.
How to open a USD account
Opening a US dollar account in Canada is a relatively straightforward process. Most major banks offer US dollar accounts to Canadian residents, and it is easy to open one with a few simple steps.
To open a US dollar account, the first step is to choose a bank that offers this service. Don't skip researching your options and compare different banks to find the one that best suits your needs and costs. It's exactly why we covered an extensive amount of them above.
Once you have selected a bank, the next step is to gather the necessary documentation. This may include government-issued identification, proof of address, and proof of income. It is important to check with the bank to determine the required documentation.
After gathering the necessary documentation, the next step is to visit the bank in person or apply online. This is usually pretty easy. The bank will guide you through the application process and may require you to sign some forms.
Once your application has been approved, you can deposit funds into your US dollar account.
Online banking and USD accounts
Online banking has made it easier for Canadians to manage their finances, including their USD accounts.
Many banks in Canada offer online banking services that allow customers to access their accounts and perform transactions from the comfort of their homes. These banks can be entirely digital, which allows the bank to save a ton of money in overhead costs running their day-to-day business.
In turn, these digital banks can often offer better interest rates to their customers, lower fees, and the ease of not having to travel to the bank to do all the banking you have to do.
Overall, watch the fees and look for the features that fit your activities, such as ATMs, withdrawal rules, cheques and drafts, etc. There are plenty of options here in Canada for these USD accounts, and their features are well-varied, so there is likely something for everyone.