Currency Conversions in Registered Plan Accounts
How You Can Avoid Currency Conversions
In Registered Plan Accounts
If you’re trading U.S.-dollar investments in any Registered Plan account, including a Tax-Free Savings Account (TFSA), we offer a convenient way to avoid foreign exchange conversions each time you buy or sell. For your RSP and TFSA, you can request the opening of a US$ component to your existing RSP or TFSA by simply calling 1-800-465-5463. For your RIF, RDSP or RESP you can simply take advantage of our free, automatic U.S. Dollar Money Market Sweep & Redemption Service.
With a one-time phone call, you can enroll in this service which will automatically:
- Sweep the proceeds from the sale of U.S. securities in your RIF, RDSP or RESP account into the TD U.S. Money Market Fund (Symbol: TDB 166)
- Redeem sufficient units of the TD U.S. Money Market Fund that you hold to settle the purchase of U.S. securities in your RIF, RDSP or RESP
Benefits of this free service include:
- More Savings: Avoid currency conversion charges when buying and selling U.S. securities in your RIF, RDSP or RESP account
- Enhanced Income: Yield on the TD U.S. Money Market Fund is generally greater than the interest rate paid on simple cash balances
- Greater Flexibility: Select the RIF, RDSP or RESP for which you wish to enroll
Enroll now by calling 1-800-465-5463
Dividends, interest payments and corporate actions are not eligible.
You must enroll to take advantage of this service.
Here are some sample buy and sell transactions showing how the service reflects in an account.
Typical WebBroker Activity Page Entries for transactions utilizing the Sweep & Redemption Service:
Example 1 - Purchase Security on U.S. Exchange
Step 1 – Purchase of U.S. Security
| Trade Date | Sett Date | Description | Action | Qty | Price | Comm |
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FICTIONAL CORP CONV TO CAD @3.55 %US PRE WZ*1572 |
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200 shares of Fictional Corp are purchased Mar 15th with a March 20th settlement date. To facilitate the purchase, the required amount of USD are purchased at a USD premium of 3.55% (1.0355). Total value of trade is USD $20519.99 and when converted to CDN$ at a 1.0355 exchange rate is $21248.45.
Step 2 – Redemption of TD US Money Market Fund to cover cost of purchase
| Trade Date | Sett Date | Description | Action | Qty | Price | Comm |
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TD US M/MKT U$-I /NL'FRAC WE ARE RELATED TO ISSUER AS OF MAR 19,2013 |
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To pay for the purchase TD Direct Investing automatically redeems TD US Money Market Fund on March 19th for settlement on March 20th to match the settlement of the Fictional Corp purchase. To avoid any foreign exchange spread cost to the purchaser of the Fictional Corp shares the exact same value of USD of the TD US Money Market Fund, $20519.99 is redeemed and the same exchange rate is applied to create the equivalent CDN$ amount of $21248.45.
Because this transaction is in a RIF, RDSP or RESP account, the Net Amount column is always expressed in CDN$. The net result of the transactions above is that there are no net Foreign Exchange Costs to the purchaser of the U.S. security.
The information displayed is for information purposes only and is not endorsed by TD Waterhouse Canada Inc., The Toronto-Dominion Bank or its affiliates and related entities.