# Exchanging Money in Canada? Do it Once You‘re There for the Best Rates

- Canonical: https://33rdsquare.com/exchanging-money-in-canada-do-it-once-youre-there-for-the-best-rates/
- Published: 2023-09-30
- Author: Nelson Ayers
- Categories: [Business & Worth](https://33rdsquare.com/category/games/worth/)

---

If you‘re an American traveler headed to Canada, when and where should you exchange your US dollars for Canadian dollars to get the most value? I recommend waiting until you arrive in Canada and using major Canadian banks to exchange money in order to get the optimal exchange rates and lowest fees.

As an investment analyst, I‘ve researched current and historical foreign currency markets in-depth. This guide will walk you through everything you need to know about exchanging money for a trip north to Canada. I‘ll explain exchange rate trends, fees, regulations, security issues, and tips to stretch your USD as far as possible so you can relax and enjoy your time in Canada!

## Current Exchange Rates: USD versus CAD

Before deciding when and where to exchange money, you first need to understand the current exchange rate between US and Canadian dollars.

As of April 2022:

- 1 USD = 1.27 CAD
- 1 CAD = 0.79 USD

So one US dollar can be exchanged for about 1.27 Canadian dollars at current rates. This means the US dollar is stronger than the Canadian dollar right now.

However, exchange rates are constantly shifting in response to economic conditions, interest rates, and other factors. To illustrate, here is a chart showing the past 5 years of exchange rates between the US and Canadian dollar:
 ![Chart showing USD to CAD exchange rate from 2017 to 2022](https://33rdsquare.com/USD-CAD_Exchange_Rate_Chart.png)
 As you can see, rates fluctuate daily but generally tend to stay within a range. Understanding the underlying trends and variables that impact currency markets can help you forecast if the US or Canadian dollar will strengthen or weaken before your trip.

## What Influences Currency Exchange Rates?

Foreign exchange rates are driven by the supply and demand for a currency. Factors that impact supply and demand include:

- **Relative interest rates** – Higher interest rates increase demand for a currency. Right now US rates are rising faster than Canada‘s.
- **Inflation** – Higher inflation typically reduces currency demand. Canada currently has higher inflation around 6% compared to 8% in the US.
- **Economic growth** – Faster growth drives up currency demand. US GDP growth is projected to be slightly higher than Canada’s this year.
- **Political climate** – Political uncertainty can weaken demand. This is a minor factor for the USD/CAD pair.
- **Trade flows** – More exports drive up demand for a currency. The US and Canada are each other’s largest trade partners.
- **Investor sentiment** – Positive outlook and higher confidence increase demand. Investor sentiment has been volatile globally amid recent market swings.

Understanding the factors above can help you determine if the US or Canadian dollar is likely to be stronger or weaker in the future.

## Historical Trends Between USD and CAD

Looking at historical exchange rates provides useful context on the relative strength between the US and Canadian dollars over time.

Here is a table showing the average annual USD to CAD exchange rates over the past two decades:
 ![Table showing average annual USD to CAD exchange rates from 2000 to 2022](https://33rdsquare.com/USD-CAD_Historical_Rates_Table.png)
 As you can see, the US dollar has remained consistently stronger than the Canadian dollar for years, with the one exception being a brief period of parity in 2007-2013.

Some key historical trends include:

- Early 2000s: USD significantly stronger, at about 1.50 CAD.
- Mid 2000s: CAD strengthens to 1.15-1.25 USD.
- 2008-2009: Currencies at parity (1 USD = 1 CAD) during recession.
- 2013-2014: CAD weakens back to about 0.90 USD.
- 2017-2022: CAD rebounds closer to 0.75 to 0.80 USD.

So while the US dollar has the dominant position, fluctuations are common making timing your currency conversion advantageous.

## Which is Better – Exchanging Money in the US or Canada?

Given changing exchange rates, should you convert your US dollars to Canadian dollars before leaving or once you arrive in Canada? Below I’ll compare the pros and cons:

### Exchanging money in the US:

**Pros**

- Convenient to secure Canadian dollars before departing
- Avoid scrambling to exchange money after arriving

**Cons**

- Exchange rates and fees vary widely depending on location
- Banks may offer worse rates compared to exchanging in Canada
- Pre-purchased CAD not refundable if rates improve before trip

### Exchanging money in Canada:

**Pros**

- Canadian banks offer better exchange rates due to local competition
- Can monitor rates up until departure and exchange at optimal time

**Cons**

- Inconvenient to exchange money after arriving
- Airport kiosks and hotels often charge higher fees

**The verdict?**

You almost always get a better value exchanging USD for CAD once you arrive in Canada. But for convenience, you may want a small amount of Canadian cash before departing to cover immediate expenses.

## Where to Exchange Money in the US and Canada

Where you actually convert your USD to CAD also makes a significant difference in the exchange rates and fees you’ll pay.

Avoid airport currency exchanges if possible – they tend to offer the worst rates. Here are some good options in each country:

### Recommended places to exchange money in the US:

- **Major retail banks** – Bank of America, Chase, Citi, and Wells Fargo have competitive rates and lower fees, especially for account holders.
- **AAA offices** – Offer currency exchange for members with minimal fees. Rates are comparable to banks.

### Recommended places to exchange money in Canada:

- **Major Canadian banks** – RBC, TD, Scotiabank, BMO, and CIBC provide the best retail exchange rates and lowest fees.
- **Vancouver Airport** – This airport is known for very competitive rates from various currency exchange counters.
- **Local mall currency exchanges** – Better than the airport but not as good as banks. Expect to pay 5-10% above official rates.

I suggest comparing actual exchange rates in your area to find the best US location before departing, then using a major Canadian bank once you arrive.

## Getting the Optimal Exchange Rates

The official “mid-market rate” you see listed online is the wholesale exchange rate. Retail banks and currency exchanges add a markup to these mid-market rates, so you always lose a percentage when exchanging money.

However, there are ways to minimize this markup and get closer to the true mid-market rate:

- Shop around and compare retail exchange rates in your location
- Avoid high-fee providers like airport kiosks and hotels
- Exchange larger sums of cash at once to reduce the percentage lost to fees
- Use a no foreign transaction fee credit card for purchases when possible

Timing currency conversions according to market fluctuations can also help. If the Canadian dollar appears to be rising in value before your trip, you may want to exchange sooner to lock in a better rate.

## How Much Cash to Carry to Canada

When it comes to how much cash to carry when traveling to Canada, I recommend following general safety guidelines:

- Carry no more than $200-300 USD or CAD equivalent as pocket money
- Avoid displaying large amounts of cash publicly
- Use the hotel safe, money belt, or dividing cash into multiple locations on your person for security

There are no legal restrictions on bringing cash into Canada. However, if you carry over $10,000 CAD in cash it must be declared at customs. Anything under $10,000 CAD can easily be brought into Canada with no declaration needed.

For purchases, using a credit card with no foreign transaction fee provides excellent security compared to carrying cash. Leave the majority of funds in your bank account and withdraw CAD as needed at Canadian ATMs for the best value exchange rates.

## Forecasting Exchange Rates Before Your Trip

Keep a close watch on currency markets in the months leading up to your trip. Compare USD/CAD forecasts from banks like TD, RBC, and CIBC. Reading expert analysis can provide insights on if the US or Canadian dollar is expected to rise or fall.

If the Canadian dollar appears likely to strengthen, you may want to exchange USD sooner to lock in a higher rate rather than waiting. Just be cautious of pre-paying too far in advance, as short term fluctuations are difficult to predict.

## Minimizing Exchange Rate Impacts on Your Budget

Here are some tips to minimize unexpected swings in exchange rates impacting your Canadian travel budget:

- Book refundable hotels and activities in case exchange rates shift significantly before your trip dates.
- Pay upfront for as many Canadian expenses as possible in USD before departing.
- Hold off exchanging USD for CAD until arrival in Canada when you understand current rates.
- Bring a mix of payment methods – credit, debit, cash – and use credit for most purchases when feasible.
- Only exchange the CAD amount you expect to need for cash expenses to avoid unused funds.

## Let‘s Review – Where is it Best to Exchange Money?

To summarize, here are my recommendations as an analyst on getting optimal exchange rates for your upcoming trip to Canada:

- **Wait to exchange USD until you arrive in Canada** – You generally get better rates at major Canadian banks compared to US airports, malls, hotels, etc.
- **Compare exchange rates** – Shop around once in Canada as rates vary. Good options are major banks, Vancouver airport, and local currency exchanges.
- **Pay with credit cards** – For most expenses, use a credit card with no foreign transaction fee to benefit from wholesale rates.
- **Limit cash exchanges** – Only take out what you need for cash spending via ATMs or bank tellers to minimize fees.

I hope these insights help you feel more confident you‘re getting the most Canadian dollars for your US dollars. Let me know if you have any other questions leading up to your trip! I‘m always happy to help.

---

Source: [Exchanging Money in Canada? Do it Once You‘re There for the Best Rates](https://33rdsquare.com/exchanging-money-in-canada-do-it-once-youre-there-for-the-best-rates/)