Norbert's Gambit Questrade Tutorial - Save Money When Converting Currency

[@jessicamoorhouse]

In case anyone recently logged into their Questrade account on desktop and wondered "What the hell happened?" they recently updated the interface to what looks like their mobile version for desktop. In my opinion, it's not good. So I immediately started searching for how to bring back the old interface and thank goodness there's a way! Just go to Accounts - All Platforms - Questrade Edge, and it should bring back the old interface.

[@MrRenaud1990]

Thank you Jessica for making a video of the Norbert's Gambit. I just convert some cash with your help!

[@jessicamoorhouse]

Amazing, glad I could help!

[@smartdoorsinc.5704]

great ! can i use this just to convert CAD to US. not for investing purposes but using it to pay US vendors in US while im in canada. basically instead of going to the bank and getting a bad rate. thanks

[@galaxytrio]

That was really helpful, Jessica, and takes away a lot of my anxiety about the process.

[@jessicamoorhouse]

Awesome!

[@Psychotron72]

Just what I was looking for!

[@jessicamoorhouse]

Glad I could help!

[@amitpande9629]

Great video! Awesome to have a step by step!

[@jessicamoorhouse]

Thanks, glad you found it helpful!

[@beautanner8409]

A question here: if you want to make small monthly contributions to say an ETF like VOO, would you just allow those savings to accrue until you could buy an additional share, and do the gambit every time?

[@jessicamoorhouse]

Correct, but if you're only making small contributions monthly, likely the savings in foreign withholding tax (assuming you're investing inside your RRSP) and lower MER aren't really worth it compared to if you were making larger contributions and have a much larger nest egg. Instead, it may make more sense to invest in the Canadian listed ETF that tracks the S&P 500 like VFV or VSP.

[@beautanner8409]

@@jessicamoorhouse Hey thanks so much! This raises the question though - at what amount does it become more advantageous to go from a Canadian listed ETF to using the gambit in an American one? (does it make sense at $10-$12k? Or does one need to be investing $50k and up?)

[@zarinaz7554]

Hi Jessica, one more question from dummy🙂. I finally started to do it watching your steps again. Could you please advise if I do not see ask price, what does it mean, is that because of weekend? Sorry, first time ever doing that.

[@jessicamoorhouse]

The markets are closed on weekends and holidays so that's likely why. Market hours are Monday to Friday between 9:30am and 4pm ET.

[@WeimaranersAreTheBest]

hey gorgeous... question for u . im Canadian... is it worth my while to do the Norbert's gambit to then invest in etf's in us currency? or just leave in Canadian funds and buy etf;s in Canadian currency? thanks

[@zarinaz7554]

Hi Jessica, thank you for the video, much appreciated all the details. Could you please advise those -12 in the PL section. Was that a loss for couple of days? Could we sometimes just wait when there is no loss and then sell? Sorry, it might be a silly question but I am an absolute beginner in investing,

[@jessicamoorhouse]

The P&L shows a $12 loss due to currency fluctuation from the time of the initial buy to journalling it over. Not that big of a loss considering the amount of money I journalled over, but you very well you could wait for the value to go back up before selling the ETF and then using the cash to purchase your intended USD security. For me, I didn't want to wait to get back that $12 and miss out on potentially bigger gains by investing that money in the ETF I wished to buy shares of. And $12 is still a lot less than the amount I would have paid not doing Norbert's Gambit and just doing a currency exchange.

[@zarinaz7554]

@@jessicamoorhouse thank you for detailed response, I agree.

[@jessicamoorhouse]

@@zarinaz7554 You're welcome!

[@josephcollins6526]

very helpful video..i share this alot on various sites for those needing some visuals. kudos to Jessica.

[@jessicamoorhouse]

Thank you!

[@pokiblue5870]

What do you think about National bank direct one of the 6 largest bank of canada ? They now offer free commission and allow you to hold US dollar ? Seems like better than quest trade with their 4.99$ per trade ?

[@jessicamoorhouse]

Haven't tried NB myself but love that they are no commissions now. Might be worth a try. For me, I still like Questrade because they've offered free ETF buys for years and I've never found fault with their customer service, plus I don't do much stock trading so I rarely pay commissions. Still, if you're interested in NB, check it out and let me know what you think!

[@pokiblue5870]

@@jessicamoorhouse For RRSP and TFSA if you have only 5000-10000$ and your not interested with DDRIP i think 0$ per trade to reinvest small amounts like 10-50$ seems like a no brainer and on top of that with a very Large Bank

[@navookaur6100]

hey Jessica, I am puzzled, did u buy CAD at 12.65 and sell those 800 shares for 10 ??? did u buy at 12.65 CAD and sell at 10 use ?? or u have a loss while selling those 800 shares. could you plz explain this to me?

[@jessicamoorhouse]

The 12.65 was the price of DLR.TO. 10 was when it was journalled over to DLR.U.TO (in USD).

[@josephfan9731]

Hi Jessica! Do you know if doing this in your TFSA/RSP account affects the contribution room of those accounts?

[@jessicamoorhouse]

No, doing Norbert's Gambit in your TFSA or RRSP account wouldn't affect your contribution room because all you're doing is buying then selling an ETF to convert currency. For example, if you were to buy and sell some other security inside your account, it wouldn't affect your contribution room. The only things that would affect it are any new contributions you make and any withdrawals you do.

[@racingwithryan214]

Hi Jessica, Great video and really appreciate the real-time way of doing the trade. Do you have a video on how to transfer the USD funds into a Canadian USD account? What would you suggest for an amount over say 20 or 30k ?

[@jessicamoorhouse]

I don't have a specific video on that but it's fairly straight-forward to do. Connect your Canadian USD bank account to your Questrade account, then make a withdrawal request and choose that bank account www.questrade.com/learning/questrade-basics/making-a-withdrawal/how-to-place-a-withdrawal-request

[@VIp-yv7kq]

From someone who has never done this before, could you provide the exact instructions you gave in the chat for “journaling” into the US stock? Thank you

[@jessicamoorhouse]

Sure, just tell them "Hi, I'd like to journal over my shares of DLR.TO to DLR.U.TO in my USD account please." Or if it's a stock, then insert the Canadian stock ticker to journal over to the U.S. stock ticker.

[@cjdoniego]

Hey Jessica! Such a great video. Just wondering, I have some money in my US bank account that I want to convert to CAD using this process. My issue with questrade is, whenever I try to fund my questrade account with USD, it charges me $20-$30 wire transfer fee as my money has to go through a "intermediary bank" which is JP Morgan Chase, and JP Morgan charges a fee before they deposit my USD into my questrade account. Any way I can get around this? Thank you!

[@jessicamoorhouse]

Great question! I'd have to do more research on that, but I feel like one work around could be to deposit your USD from your U.S. bank account into a Wise account, then from there, transfer funds into your USD Questrade account? I haven't tried this myself but might be worth looking into wise.com/

[@cjdoniego]

@@jessicamoorhouse Thank you very much for getting back to me! I do have the Wise account but I didn't know you can open up a US questrade account? Something I need to do more research on as well

[@jessicamoorhouse]

@@cjdoniego And I found this thread with more info on how to do it (but you can always talk to Questrade's customer service). www.reddit.com/r/Questrade/comments/oo5lj8/wise_transferwise_usd_to_questrade_usd/

[@cjdoniego]

@@jessicamoorhouse you're the best! truly appreciate you

[@PGcrazy6]

Dear Jessica, what are my options for CDN Margin account switching to USD. Do i buy an CDN ETF from my CDN Margin & then ask Questtrade to convert them to the US ETF ... and then sell ETF to get USD Funds ? Or do i have to tranfer most my Margin funds to TFSA & then purchase ETFs ???

[@jessicamoorhouse]

You can do Norbert's Gambit exactly how I should it inside your TFSA, RRSP, or taxable (margin) account, it all works the same. Just be aware there may be tax implications such as capital gains inside your taxable account.

[@ft888]

Hi Jessica, thank you for the useful information. Have you come across ppl buying etf's doing dollar cost average on their diy investing while using this process?

[@jessicamoorhouse]

Not too many. Since Norbert's Gambit really only makes sense for bigger sums of money, it would make more sense when doing lump sum investing.

[@Jake51500]

Great video...2 questions : what other currencies can be used besides Cdn & US? Also, do I have any tax concerns if I do this within my RRSP? It is not considered taxable like a withdrawal?

[@jessicamoorhouse]

So technically you can do Norbert's Gambit in different currencies but it really depends. Remember, in order to do Norbert's Gambit you need to exchange equivalent, dual-listed shares from different exchanges. In the video you see me do this with DLR.TO (the Canadian-listed Horizons US Dollar Currency ETF) which I journal over to DLR.U.TO (the U.S.listed Horizons US Dollar Currency ETF). Another example of doing this is journaling over TD.TO (Canadian-listed stock of TD Bank) to TD (U.S.-listed stock of TD Bank). If you wanted to convert your Canadian dollars to British pounds for example, you'd need to find equivalent, dual-listed Canadian and BritishETFs to do so. Also, not many discount brokerages offer foreign exchange accounts outside of USD. I believe only HSBC Direct and Interactive Brokers. Here are some other resources for you to check out: www.moneysense.ca/save/investing/etfs/canadian-brokerages-accounts-foreign-currencies/ www.theglobeandmail.com/globe-investor/investment-ideas/how-to-trade-on-foreign-exchanges/article4201250/

[@Jake51500]

@@jessicamoorhouse thank you for such a detailed response!!

[@jessicamoorhouse]

@@Jake51500 You're so welcome!

[@tinatzoganakis4011]

I haven't done this before, but I'm not sure it's that foolproof. By the time everything settles, are you not risking a loss because of currency fluctuations? If the currency conversion was "stable" during the days leading up to settlement, that would be great, but it isn't...am I missing something?

[@jessicamoorhouse]

Correct, there is the risk that the currency may fluctuate.

[@commandarkify]

This is great! I’ve watched a few videos about this but didn’t fully understand it. Yours just connected all the dots. Questions, isn’t it also possible to open a usd bank account with a bank that doesn’t charge fee and fund usd to Questrade directly? I’ve been looking for an answer but don’t see anyone talk about this option. I’m starting to think thar there might be a hidden fee or something.

[@jessicamoorhouse]

Correct, if you have U.S. dollars, you can open up a USD bank account with a Canadian bank, fund that account with your U.S. dollars, then transfer those U.S. dollars directly into your USD Questrade account.

[@commandarkify]

@@jessicamoorhouse thank you!

[@Denisbonsaint2023]

Great video! Does it make sense to go through all this process on order to buy only a few shares worth less than a 900$?

[@jessicamoorhouse]

Likely not. For smaller orders, Norbert's Gambit usually isn't worth the hassle.

[@Denisbonsaint2023]

@@jessicamoorhouse Thanks 🙏🏼

[@Alikhan78611]

Need to covert 90K USD into CAD, would this be beneficial to me? TD is offering a horrible rate to convert... Thanks!

[@marycampos7563]

After all can I transfer the US money to my regular bank us account?

[@jessicamoorhouse]

Yup, if you do Norbert’s Gambit, you can then transfer the USD cash in your investment account to a USD bank account if you have one.

[@marycampos7563]

@@jessicamoorhouseThank you Jessica for answering me. For a big amount like 100k the process would be the same? I am Canadian and also resident of United States and need to bring to Us around 100k usd, but with the regular bank is crazy! We lost a lot! So I am looking for other options. Thank you again.

[@jessicamoorhouse]

@@marycampos7563 you’d likely have to call your discount brokerage about the best to transfer such a big amount, same with whatever bank you’d then want to transfer that to as well. Another option is using Wise to exchange USD to CAD, however there is an exchange fee for this though it’s lower than most currency exchanges (I use it for example when paying international contractors because the rates are more favourable).

[@mandingo1125]

Awesome video. Thank you

[@jessicamoorhouse]

So glad you found it helpful!

[@sheryk13]

@jessica moorhouse Is there a $ limit for this transaction? Can I do let's say >$1M CAD to usd ?

[@jessicamoorhouse]

That's likely up to the discount brokerage, you'd have to contact them about limits.

[@reliablehomescanadianchapt9153]

How do you use norberts gambit with IBKR? From what I have seen IBKR Only charges $2.00 transaction fee. please help as I am looking to convert at least $300 CAD. Thank you

[@jessicamoorhouse]

I've never used Interactive Brokers but I'd assume it would be a similar process. But I did find this Reddit thread about it. www.reddit.com/r/interactivebrokers/comments/xwkz77/norberts_gambit_in_ib/

[@wsm382]

Hi Jessica, after the trading is finished will the trade be at par? So if you put in 5000 CA funds will you receive 5000 US funds less small fees?

[@jessicamoorhouse]

No, that's not how currency conversion works. Using today's currency conversion rate, if you start with $5,000 CAD and convert it into USD, you would end up with $3,896 USD. $1 Canadian dollar is only worth $0.78 American dollars.

[@wsm382]

@@jessicamoorhouse ah, I figured that but someone told me they used N.G. to convert CA funds to US at par. I thought it was too good to be true. Thank you for your quick reply.

[@jessicamoorhouse]

@@wsm382 Ya that's not possible.

[@galaxytrio]

How about doing a video about using Passive with Questrade or Weathsimple when you use Norbert's Gambit to buy ETFs in $USD?

[@jessicamoorhouse]

I probably won't because that honestly sounds more complicated that just doing it directly through Questrade.

[@ianfu6523]

Thank you for your explanation. I just want to ask if I want to convert more than 400,000 CAD into USD, is Norbert's Gambit a good way to do it? are there any potential issues with this relatively large amount of money?

[@jessicamoorhouse]

This might answer your question www.financialwisdomforum.org/forum/viewtopic.php?t=124582

[@mgupta]

Cool - simple easy video! Also, does this mean I could move this money to a U.S. bank account to withdraw US dollars for a vacation type thing?

[@jessicamoorhouse]

Yes, you can do that via wire transfer. More info here www.reddit.com/r/Questrade/comments/wehybb/does_questrade_allow_me_to_transfer_usd_to_a/

[@muhammadabdulwahab3941]

There is a contribution limit on tfsa account. How do we deal with that when we want to convert money more than the tfsa contribution limit.

[@jessicamoorhouse]

Then you'd have to do Norbert's Gambit in an unregistered (taxable) account.

[@kanchidave192]

Hey, can you confirm after the final journaling ( i.e selling it) the amount will be credited will be USD?

[@jessicamoorhouse]

Of course it will, that's the whole point of NB. This article also shows a visual wealthsavvy.ca/norberts-gambit-questrade/

[@1HundredP]

Much appreciated!

[@jessicamoorhouse]

Glad to help!

[@spencerkanen5975]

I heard there was an amount you should move over so that it makes sense. Would it make sense to anything less than $2k. Norberts Gambit $10-$15 or straight 2% on say $1k = $20 to save a few days

[@jessicamoorhouse]

It's recommended by most people to wait until you have minimum $10,000 to do Norbert's Gambit since you have the fees to consider. I'd probably agree.

[@wildwheelsdarin]

Thanks for making this video! How much were the fees for both transactions? Were there any other fees beyond that? I've learned about this method years ago, but have been hesistant to try it. But seeing it done in Questrade was very helpful. I'm going to try it. I know someone who's been drawing $5000 at a time from their RRSPs, so that exchange fee could potentially be $100 each time... Eek!

[@jessicamoorhouse]

There were no fees beyond what was shown in the video which was $2.80 CAD to buy, and $10.85 USD to sell.

[@r.t.7925]

@@jessicamoorhouse You also lost 12 USD from the ETF itself. It went down $0.015. But compare to $200 i exchange fee its a pretty good deal . Thanks for posting.

[@jessicamoorhouse]

@@r.t.7925 Yes absolutely, the ETF value can go down in the process which can lose you some money, but still minimal compared to the exchange fee. Thanks for watching!

[@chauffeurmarco]

Thank you. I learned that but That was the part that i was nervous about because I learned it in french and the journal thing was not clear in my mind because it can't be translate really.

[@jessicamoorhouse]

Glad I was able to help :)

[@watsss]

Are you saving some of the currency conversion fee or all of the currency conversion fee?

[@jessicamoorhouse]

This strategy is so you bypass the currency conversion fee.

[@derp3044]

well, you still get charged a commission fee, but other than that you are saving. If you are trying to convert fees under 200 for example, I think taking the 1.5% - 2.0% conversion fee @ $3.00 would be better than paying $10 for 2 commission fees.

[@TaddyBare]

Sounds like an elaborate chess strategy. 😅 I’ve read about it but couldn’t wrap my brain around it. May have to try now. Thanks for the visual!

[@jessicamoorhouse]

It's definitely a bit of chess, but it sounds more complicated than it actually is in practice. :)

[@taimoor722]

what if we want cad to chines yuan

[@jessicamoorhouse]

In order to do Norbert's Gambit, you need to buy a dual-listed security (i.e. CDN and U.S. listed security). You would also need to find out if your discount brokerage allows you to hold yuan. From what I've read online, I don't believe you can do NG converting CAD to CNY.

[@jonathankrimer]

You are technically missing a step. You should sell dlr in the usd at the same time you buy in the cdn account so that when they convert, you haven't lost to currency fluctuations that may occur over those few days.

[@jessicamoorhouse]

That would be ideal but it takes a few days for the shares to journal over and settle into your account so you wouldn't be able to do it the same day.

[@jonathankrimer]

@@jessicamoorhouse I'm not saying the trade would settle in a day. Re read. Your method introduces risk of a currency movement over the days it takes to settle the trade. The proper way is to do the opposite on the day of you make the purchase, you also sell the other side. Think about it.

[@davidgervais5974]

@@jonathankrimer how do you sell something you don't own? DLR.U.TO only exists after Questrade has journaled it. It takes a few days as Jessica said.