If you're a Canadian investor looking to invest in US stocks, you've probably heard of Qtrade Investor.
Whether you've used their platform before or not, after reading this post, you'll see how cheap and simple it is to trade US stocks from Canada.
We'll start by looking at the advantages of investing in US stocks. Then we'll go over how to buy them online with Qtrade Investor, including how to convert your Canadian dollars for US dollars (CAD to USD) in order to maximize your earnings.
##Why invest in US stocks?
If you haven’t already you should know there are several reasons why so many Canadians invest in US stocks. For starters, consider the following three major reasons:
Let's say you wish to invest in Walmart stock, which is traded in the United States (and is not a Canadian stock). Assuming you only have funds in your Canadian bank account, there are a few main approaches to this.
Whether you have a registered account (such as a TFSA) or a non-registered account will determine your options. To begin, if you have a registered account, Qtrade Investor will automatically convert your funds.
Trading Walmart stock (or any other US company or ETF for that matter) allows Qtrade Investor to convert the currency from CAD to USD at the rate of its choice. The platform explicitly says that it earns revenue on these currency conversions.
Then you accept whatever exchange rate Qtrade Investor offers, even if it isn't the most competitive.
Despite its convenience, this method is not the most cost-effective (more on that later).
You can also trade US equities on margin as a second option.
Allow me to explain. When you trade on margin, you are essentially borrowing money.
Qtrade Investor will borrow the cost of Walmart in USD for you, even if you have CAD, and you will pay interest on that US dollar amount.
Let's imagine you have 5000 CAD in your account and decide to invest 1000 CAD in Walmart stock. Qtrade Investor will borrow US money and keep your Canadian account untouched, even if you have enough money in your Canadian account to buy the Walmart stock.
Of course, you'll have to pay interest on the money you borrowed. This isn't the most cost-effective method of purchasing US stocks.
An alternative way to buy US stocks on Qtrade investor
It’s important to note that Qtrade Investor also charges a fee of $15 per quarter for USD RRSP and TFSA accounts. Another option for purchasing US stocks is to fund your Qtrade Investor account with USD.
Here’s how to do it.
To begin, you'll need a US bank account, which is simple to obtain if you live in Canada. We've discussed several possibilities for opening a USD account from Canada.
When you're trading less than $10, a fee of 1.99% may not seem like a massive issue. When you start getting serious about trading, however, you'll kick yourself for not doing more research at the start.
Qtrade Investor rates of 1.5%-1.99% may not seem like much at first, especially when compared to what banks and credit cards charge (about 2.5 percent), but after trading $5000, you've already lost nearly $100.
That's a nice dinner for two that you're missing out on because you don't know of another way to convert your CAD to USD.
You also have no choice but to use the Qtrade Investor CAD to USD conversion rate, which means you'll lose even more money. There is, however, a technique to save money on exchange rates.
When converting your Canadian dollars to US dollars, the newly launched Remitbee Currency Exchange charges no fees and offers highly competitive exchange rates. Compare the CAD to USD exchange rates for yourself.
You can exchange up to $50,000 each day with Remitbee and there are no hidden fees. It only takes 2-3 business days to complete the exchange.
Step 1 Sign Up for Remitbee and verify your account Step 2.Click currency exchange Step 3. Connect your CAD and USD accounts for EFT Step 4Confirm conversion rate and exchange currency Step 5 Your converted money will be in your account within 2 business days
Step 1: Set up your account for EFT or Electronic Funds Transfers.
Step 2: Select My Accounts → Transfer Funds → Electronic Funds Transfer.
Step 3: Alternatively, use bill payment by logging into your online bank system, searching for Qtrade and selecting it as a payee.
“How long does it take to exchange funds in Qtrade Investor?” you might be thinking. It may take up to two business days for the process to be complete.
It's that simple and fast!
Qtrade Investor is one of the top methods for Canadians to trade US stocks, and until recently offered some of the best CAD/USD rates. Remitbee Currency Exchange, which was just launched, is an alternate option to convert your money so that you can trade US stocks with Qtrade Investor and save money. When it comes to investing, every dollar counts.
FINTRAC regulates and audits Remitbee Currency Exchange, so you can feel secure. Get your Remitbee account today to start converting your CAD to USD or USD to CAD. We want to make your first exchange even better, so we're going to give you a $15 bonus! To get your bonus, sign up right now!
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