How can I reduce the foreign exchange costs in registered accounts?
U.S. dollar trades executed in your registered account (RSP, RIF, TFSA, LIF, etc.) at Credential Direct are subject to foreign exchange conversion. For example, if you buy a U.S. dollar security, the purchase will settle in Canadian dollars with the foreign exchange rate for buy orders applied. If you then place a sell order, the foreign exchange sell rate will be applied to that sell. We are currently in development to permit U.S. dollar cash in a registered account so that foreign exchange conversion will not occur. Until that time we are pleased to provide the following: “foreign exchange flat trades” also known as “washing FX rates”.
To wash the FX rates: Washing the FX rates must be handled manually through a phone order by a representative:
- Orders must be $10,000 USD and executed on the same day
- Execute the first USD order on-line
- Once filled, then phone Credential Direct to place any subsequent orders. Commission will be min $43 USD
- The representative will manually apply the same FX rate as the first order
Credential Direct will not be responsible for washing the rates on executed orders from prior days; or, on subsequent orders that have been executed using the on-line trading system.