How to Exchange Currency with Qtrade Investor to buy US Stocks
If you're a Canadian investor looking to invest in US stocks, you've probably heard of Qtrade Investor. Exchange CAD to USD or USD to CAD with the best exchange rates and 0 Fees. 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.
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:
The New York Stock Exchange (NYSE) and the New York Stock Exchange (NASDAQ) are the world's two major stock exchanges. Investing in US equities gives you access to some of the world's most powerful corporations, including Microsoft and Apple.
Canadians can diversify their portfolios by investing in US stocks.
Qtrade Investor, until recently, was one of the best methods to buy US stocks with a Canadian account, owing to its extensive set of investing tools and free ETF trading option.
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.
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.
Here's how to connect your USD account to Qtrade Investor and start optimizing profits while trading US stocks.
