I do my banking with TD Canada Trust, and have a brokerage account with TD Waterhouse. I find that I always get a slightly better exchange rate going through my brokerage account than my bank account.
To illustrate: a minute ago, I obtained the following exchange rate quotations if I were to purchase $10,000 in US dollars:
1.3385 - TD bank
1.3319 - TD Waterhouse brokerage
so on a $10k transaction, I would have saved $66 Canadian by going through my brokerage account.
TD has a bunch of different types of bank accounts and brokerage accounts, which I assume have different conversion rates. I also know that the rate is slightly better for larger transactions.
************************
Around ten years ago, I learned about what is probably the most cost effective way of doing conversions between Canadian and US dollars. It is kind of complicated, and It does involve some risk, so it is not for everyone.
Let's consider a large liquid stock that trades on both the Canadian and US stock exchanges, for example, Bank of Montreal. At any given moment, the price on the Canadian exchange tracks exactly with the price on the US exchange, after taking into account the current exchange rate. There CAN'T be any sort of price differential, since if there was a price differential large players could (for example) buy 100,000 shares of BMO on the Canadian exchange and simultaneously sell 100,000 shares on the US exchange, and pocket the difference in price.
I've now done the following series of transactions twice (five years ago and ten years ago):
- buy 200 shares of BMO on a Canadian exchange using Canadian funds
- phone TD Waterhouse, and ask them to move my BMO shares from my Canadian brokerage account to my US brokerage account
- sell the BMO on the US stock exchange, so the end result is that Canadian dollars have been converted to US dollars
THE PROBLEM: in my case, it always took around 2 days for the BMO shares to move between accounts. So, the price of BMO could drop during that time, and perhaps drop by a significant amount. I was fortunate both times I did this because the price of BMO went up, so I actually made a small profit on the transaction. So, a person shouldn't be doing this sort of thing unless they really know what they are doing, and can accept the possibility that they may end up with BMO shares they would take a loss on if they sold.
As I mentioned at the start, this procedure is kind of complicated, so definitely not for amateurs or the faint of heart.