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Currency settlement in registered accounts
August 13, 2018

Before Questrade introduced the option to choose how currency settled, no other institution in the industry allowed investors to hold U.S. cash in a registered account. Cash was always in Canadian dollars, meaning any trade in the U.S. markets would trigger a currency conversion.

One of the great features of Questrade’s registered accounts, including RRSPs and TFSAs, is being able to hold both U.S. and Canadian dollars. This means you can trade in markets on both sides of the border without paying currency conversion each time you trade.

The currency settlement preference lets you control how money is deposited (settled) in your registered account when you sell securities, receive cash, and when you transfer in funds from another financial institution.

With this feature, you can set your account preference to Currency of transaction, USD or CAD settlement. No more surprise currency conversions means more savings for you.

  • Currency of transcation

    This is the simplest option. If you invest in U.S. markets, your currency will remain in U.S. dollars. If you invest in Canadian markets, your currency will remain in CAD. Invest in both? Great, your currency will always settle in the currency of the trade.

    For example, assume you sold XYZ stocks and received $500 USD. You also sold DEF.TO stocks and received $800 CAD. As there is no currency settlement in the account, your cash balance the following business day would be USD $500 and CAD $800.

    The exception to this rule is if you hold a debit balance on one side of the currency overnight.

    For example, if you have $500 USD cash and have -$100 CAD, your USD cash will be converted to cover the debit balance on the CAD side. This auto conversion is based on the CRA rule which does not allow registered accounts to hold debit balances.

  • CAD settlement preference

    If your currency settlement preference is set to CAD, any funds deposited into your account will be converted to CAD automatically overnight. If you received USD from the proceeds of selling US stocks, dividends or any USD cash will be converted to CAD overnight.

    For example, assume you sold XYZ stocks and received $1,000 USD. This amount would be converted to the equivalent amount in CAD overnight using the end-of-day exchange rate on the market. The following business day, you will CAD Cash and 0 USD.

  • USD settlement preference

    If your currency settlement preference is set to USD, any funds deposited in your account will automatically be converted to USD overnight. If you received CAD from the proceeds of selling CAD stocks, dividends or any CAD cash will be converted to USD overnight.

    For example, assume you sold XYZ.TO (Canadian) stocks and received $2,000 CAD from the sale. The proceeds would be converted to the equivalent USD overnight using the end-of-day exchange rate on the market. The following business day, you will hold the equivalent USD amount (adjusted for spread).

  • Updating your preference

    To update your currency settlement preference, log in to your Questrade account, click ACCOUNT MANAGEMENT and tap Currency settlement to make changes. Please note that changes made after 2 p.m. ET may not be applied to any end-of-day conversions that are scheduled to occur on the same business day. In that case, the change will be effective the following business day.

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The information contained in this website is for information purposes only and should not be used or construed as financial or investment advice by any individual. Information obtained from third parties is believed to be reliable, but no representations or warranty, expressed or implied is made by Questrade, Inc., its affiliates or any other person to its accuracy.

Questrade Wealth Management Inc. (QWM) and Questrade, Inc. are wholly owned subsidiaries of Questrade Financial Group Inc. Questrade, Inc. is a registered investment dealer, a member of the Investment Industry Regulatory Organization of Canada (IIROC) and a member of the Canadian Investor Protection Fund (CIPF), the benefits of which are limited to the activities undertaken by Questrade, Inc. QWM is not a member of IIROC or the CIPF.