– Unfortunately, you aren’t going to earn much interest on U.S. cash (or on
any cash for that matter). My recommendation was based on my expectation
that the loonie will decline in value against the greenback this year,
which would give you a capital gain on any U.S. cash you hold. (Of course,
if the loonie rises, you’ll lose.)
All the big banks offer U.S. dollar accounts, and some come with a variety
of bells and whistles, such as a U.S. currency credit card, cheques,
favourable exchange rates, etc. What they don’t offer is respectable
interest rates. For example, you would have to deposit at least US$25,000
with TD Bank in order to earn a miserly 0.10%. If you have over US$100,000
you can earn 0.25% with HSBC.
A good U.S. dollar money market fund may offer a better return. For
CIBC U.S. Dollar Money Market Fund
returned 0.7% over the year to Feb. 28. The average for the category over
that time was 0.3%.
You can find better rates with some smaller U.S. banks; however, they may
require a U.S. address. You can search for details at
www.bankrate.com/partners/sem/savings-accounts-mma-v3. – Gordon Pape
is one of Canada’s best-known personal finance commentators and
investment experts. He is the publisher of
The Internet Wealth Builder and The Income Investornewsletter, which are available through the Building Wealth website.
Follow Gordon Pape on Twitter at
and on Facebook at
Notes and Disclaimer
© 2017 by The Fund Library. All rights reserved.
The foregoing is for general information purposes only and is the opinion
of the writer. Securities mentioned carry risk of loss, and no guarantee of
performance is made or implied. This information is not intended to provide
specific personalized advice including, without limitation, investment,
financial, legal, accounting, or tax advice. Always seek advice from your
own financial advisor before making investment decisions.