Easy Canada-US Cross-Border Banking

Posted On 27 August 2023

Last updated on April 4th, 2024

Everybody has different cross-border banking needs. Some people are fine with bringing cash with them or using a credit card in the US. Other people are frequent travellers to the US, maybe truck drivers or snowbirds that spend months at a time in the US. Another group that would find a cross-border bank account beneficial are students attending an American school.

For those who live in Canada and have banking needs in the US, there are bank accounts that can meet your needs. These accounts are offered to Canadians through the Canadian banks’ US counterpart.

Benefits

Having a cross-border bank account gives the account holder an account with a US routing number. These accounts have the following benefits:

• Bill Pay for US bills.
• Deposit US checks through the banking app.
• Direct deposit from US sources into your account.
• Transfer money from your Canadian account to your US account.
• e-Transfer money to someone else in the US.
• Bridge the gap between Canadian and American banks.
• The cross-border bank account is an American account and is not included with the FBAR. (This is only noteworthy for American citizens.)

Disadvantages

• The cross-border bank account needs to be opened online – they cannot be opened in the bank. A phone call for verification may be needed as well.
• The banks may not have branches where you are in the US.
• The exchange rate may not be the best but consider that you are paying for the convenience.
• It is another bank account, which does add a person’s banking complexity.
• You are dealing with two different banks (Canadian and American) that do not know how the other bank operates.

The Banks

Four of the “Big 5” banks in Canada currently offer cross-border bank accounts with their American counterpart to Canadians. Some of the banks offer free accounts with no minimum balance. Other banks charge fees. There are even some that offer bundle deals to customers.

Here’s what the banks have to offer (in alphabetical order):

BMO

Their US bank is called BMO Harris Bank. There are some cross-border bank account options that you can choose based on your needs. With the BMO or BMO Harris app, you can transfer between your Canadian and American accounts. They also offer a US dollar Mastercard and US mortgages.

CIBC

CIBC Bank USA is their US counterpart. They don’t charge a monthly fee for having the cross-border bank account and there is no minimum balance required. Funds can be transferred between your Canadian and US account with the CIBC banking app. There is a feature where you can transfer between your USA Smart account and an external US bank account. The external account must be in your name. A US dollar Visa card is available, and they offer US mortgages.

RBC

RBC Bank is the US counterpart. They have choices of cross-border bank accounts available. There have a banking bundle available. When you get the bundle, your first year’s account fee waived. Yes, they charge an account fee. RBC bank also offers a Visa card and they have mortgage options.

Scotiabank

Unfortunately, they do not offer a US banking option to Canadians. When looking at their cross-border banking options, they talk about how you can use your Canadian Visa debit card in the US. See Pro Tip #3 about using Canadian cards in the US. There are no fees except the exchange rate.

TD

TD Bank is the name of the bank in the US. They offer a range of cross-border banking options to meet your needs. TD Bank has branches mostly on the East Coast of the US. If you need a local bank in your area, see Pro Tip #2. They have chequing, savings, and a US Visa to help you with your US banking.

Taking Your Banking Up a Level

For the person who is frequently on both sides of the border, having a cross-border bank account can be a game changer. It allows us easy access to our money on both sides of the border.

I don’t know your situation, so I can’t tell you which bank would be the best one for you. This post is intended to bring the idea of a cross-border bank account to your attention and let you know how it can help you with your US banking needs. Just learn the rules of the game so that you can do the things you want with greater ease.

Bonus – Pro Tips

Pro Tip #1: Open a US dollar account (savings account will work) at your Canadian bank. That way you can deposit or withdraw American dollars without having to exchange your money twice. Going from US to CAD back to US can get expensive!

Pro Tip #2: Open an account with a US bank with branches in the area(s) you travel to in the US. This will allow you the option of in-person banking. Money can then be sent to your cross-border account. In this case, your cross-border account would act as a bridge between the two countries. US banks with branches nationwide give Canadian residents the most in-person banking flexibility in the US. If you only go to a certain area in the us, a regional bank could serve you well.

Pro Tip #3: If you are using a Canadian card in the US it will work just fine. Sometimes, you might be asked for your zip code. There is a work around for that! Enter only the numbers in your postal code followed by “00”. So, if your postal code is A2B 3C4 you would enter 23400.

Pro Tip #4: With a US checking account, Americans can write a check from that account to renew their US passport through the mail.

Pro Tip #5: The US account can be linked to the IRS for receiving tax refunds or stimulus checks.