You will save a considerable amount on conversion fees, by following the Norbert’s Gambit. Our calculations suggest that you can save around $2,100 CAD for converting $100,000 CAD into USD.
What is Norbert’s Gambit?
You can convert Canadian dollars to US dollars using banks or exchange kiosks. However, Norbert’s Gambit is a cheaper method to convert Canadian dollars (CAD) to US dollars (USD), by making use of online brokerage account that has access to both US and the Canadian stock exchanges. Since it is claimed to be a cheaper way of conversion, it is natural of people to ask how much one can save in via Norbert’s Gambit method in comparison to a bank. Let us explore.
How much does Norbert’s Gambit save?
Let us image you would like to convert $100,000 CAD to USD. As at 10th October 2022, the conversion rate is $1 USD = $1.37 CAD. Given you have an account with TD Commercial bank in Canada. The bank offers conversion at $1.4113. For $100,000 CAD, you need to get $72,992.70 US dollars before any fees, but you receive only $70,856.66 when you convert with TD bank, after fees. So basically, the conversion fee is $2,136.043 CAD.
The DLR trades at $13.88 CAD per share as on 10th October 2022. This means you need to buy 7205 units of shares.
Let us imagine you buy this with Questrade, the commission is $1 cent with a minimum of $4.95 CAD and a maximum of $9.95 CAD. For 7205 shares, you will be charged a maximum commission of $9.95.
The ECN in Questrade is $0.0035/share. When you buy DLR, TSE you need to pay an ECN of $0.018 CAD and when you sell the DLR.US, you need to pay $25.218 USD. The total fees you pay in CAD is $9.97 and the total fees you pay in USD is $25.218. When converting $25.218 into CAD it will result in $18.41 CAD. Thus, the overall fees you need to pay is $28.37.
You will save $2,107.673 fees by following the Norbert’s Gambit method.
Savings through Norbert’s Gambit
Thus, with Norbert’s gambit method you can save substantially when you need to convert huge amount of money.