Do you need a US bank account? A snowbird’s guide
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If you have ever exchanged currency into US funds, you have probably been asked by your bank teller whether you have considered opening a US bank account. Like most people, you likely declined and went on with your day.
However, snowbirds should put extra thought into opening a US bank account.
Can you get by without one? Absolutely, but if you use your Canadian debit and credit cards on a regular basis in the US, you will find that conversion costs and fees can add up quickly.
In addition to the exchange rate, you are also charged a fee by your bank to change money into US currency, and most credit cards charge at least 2.5% for making purchases in US dollars. If you are in the US sporadically, you may decide to accept and live with these fees, but if you are spending a number of months in the US each year, getting a US bank account can be beneficial.
“Canadians get that the U.S. is a different country, but we kind of don’t get it,” says Greg Quinn, vice president of cross-border banking for TD Bank to the Toronto Star. “The reality is that [the border] is an international boundary and there are laws and regulations and systems and traditions that aren’t designed to fit easily together.”
All Canadian financial institutions offer US bank accounts and credit cards, and they can make your life easier if you travel to the US frequently.
“Demographic trends are sending more Boomers into retirement, and many are seeking an escape from winter. TD’s research found that in 2007, 28 per cent of Canadians used U.S. dollars that year to shop or travel. By 2012, it was 60 per cent,” says Adam Mayers.
Banking fees for US bank accounts vary by institution. When you consider your options, make sure to take into account:
If you already have an account with a specific bank, you may be able to get a US account free of charge. After you add the US account, you can to transfer funds between both of your accounts.
A US bank account is worthwhile for snowbirds and for anyone who travels across the border on a regular basis. Talk to your bank about your options to save money on conversion rates and banking fees.