RBC Direct Investing (read my review) is letting clients know that it will soon be offering the option of holding U.S. dollars in registered accounts such as RRSPs and TFSAs. The Direct Investor newsletter included along with the March brokerage statement contains this announcement:
Coming soon, you will be able to hold U.S. dollars in your registered accounts
In response to requests from our clients, RBC Direct Investing is pleased to offer investors the option of holding U.S. dollars in their registered accounts. This will enable you to buy and sell U.S.-dollar-based investments without the inconvenience of converting currencies.
Starting later this spring, you will be able to hold U.S. dollars in most of your registered accounts, including the Registered Retirement Savings Plans (RRSPs) and Registered Retirement Income Funds (RRIFs). You will also be able to hold U.S. dollars in the Tax-Free Savings Account (TFSA).
If you currently hold one or more of these accounts, you will find this new capability automatically added to your accounts.
RBC Direct might choose to characterize currency conversion as a mere “inconvenience”. At 1.5% each way, clients would more aptly term it (in polite conversation) as “expensive”.
It is not clear if RBC Direct Investing will charge a separate admin fee (like QTrade does) or charge extra commissions for transacting in US dollars (like Questrade does). But RBC Direct Investing, which currently does not offer a way to save on foreign exchange fees when buying and selling US dollar denominated stocks in registered accounts, has removed a major irritant with the discount broker.
Here’s my question to TD Waterhouse, BMO InvestorLine and the other majors: what are you waiting for now?
PS: Hat tip to Chris for his heads up on RBC Direct Investing’s announcement.