Wealthsimple’s prepaid Mastercard (aka the Cash Card) has stopped offering cashback on purchases, effective October 2nd, 2025. Don’t confuse this with Wealthsimple’s Visa card, which is an actual credit card, and still offers a nice 2% cashback reward.
I’ve been a fan of Wealthsimple’s prepaid Mastercard for a while now. I wrote about it over here. My favourite feature of this prepaid Mastercard is that it does not charge the usual 1.5% foreign exchange fees most other credit cards bury in their transaction costs.
The demise of the 1% bonus isn’t a deal-breaker for me but it was nice while it lasted. The card is also noteworthy because it permits ATM access globally with no fees. This isn’t a feature I’ve used, but it might be of interest.
I signed up for the waitlist for Wealthsimple’s Visa card when it was released, but the rollout has been v-e-r-y slow, and I’m still waiting for that to materialize1. Once I get my hands on one, I will have no incentive to use the prepaid card since the Visa card also offers no-charge foreign exchange AND 2% cashback on all purchases. That’s a great deal.
About every third post on Reddit’s Wealthsimple sub is complaining about the slow rollout. ↩︎
Since I hold a fair amount of USD in my retirement portfolio and most of my expenses are in CAD, I do have to convert between the two worlds from time to time. Most of the time I’m converting USD to CAD, but because of higher US interest rates, I’ve recently converted some CAD into USD to take advantage of that fact and earn a little more money on my cash positions1. My normal way of dealing with this conversion is using Norbert’s Gambit, which I’ve talked about here and here.
Anyway, I’ve decided to keep track on what these movements are costing me using my current broker of choice, Questrade. The answer is not quite as straightforward as you might think.
Fixed Cost
With Questrade, a journaling2 fee is charged every time you do the Gambit. This costs $9.95 plus HST for a total of $11.24, always charged in Canadian dollars. If you choose to subscribe to Questrade Plus, then your monthly fee covers these costs. I’ve done the Gambit twice this year, with one more planned in the 4th quarter. So for me, the cost of journaling is a pay-as-you-go cost. This cost is the same whether you are journaling one share or 10,000 shares, so larger transactions are better here.
Variable Cost: Changes in USD/CAD rate
Performing the Gambit using Questrade takes several business days. The foreign exchange rate moves all the time, so by the time you complete the conversion, the rate has almost certainly changed from when you started the process. Sometimes this works in your favour, sometimes not. Most of the reading I’ve done suggests you ignore this variability, since over time it should even out. For kicks, I’m tracking it.
Variable Cost: Buying and Selling DLR/DLR.u
Any trade you do has an inherent cost, even if you pay $0 commissions3, as I do. That cost is buried in the bid/ask spread. You may have noticed this at work immediately after completing a trade — it almost always seems that the market value of what you just bought is a little lower than what you just paid4. This variable cost is buried, but can be estimated by looking at the average bid/ask spread of DLR, which is featured on its fact sheet. It’s currently stated to be 0.07% when buying/selling DLR and 0.1% when buying/selling DLR.U5 . So, on average, you will sustain a total 0.17% cost when doing the Gambit. But I must reiterate — this cost is buried in the actual price per share you get when buying/selling DLR. Now, I actually paid very close attention to the bid/ask pricing last time I did the Gambit and I paid about half that rate but that’s all down to things like the volume of trading on the day, how many shares you’re moving and a whole bunch of other things that I don’t fully comprehend.
Anyway, here’s my tracking table that I’ll update as I do more of these trades:
Some definitions are in order:
DLR Buy: date upon which DLR (or DLR.u) was purchased.
DLR Sell: date upon which DLR (or DLR.u) was sold. There’s a lag because that’s how long Questrade takes to complete the journaling request. Seems like it’s 3 business days.
USD: The USD value of DLR bought or sold as reported by the trade confirmation6
CAD: The CAD value of DLR bought or sold as reported by the trade confirmation7
Effective rate: divide the previous two columns to come up with a USD in CAD rate8
Spot Rate on BUY/SELL date: daily average exchange rate9 as reported by the Bank of Canada
Target currency: what we end up with, USD or CAD. It’s the opposite of what we start with
Ideal in target currency: This is a calculation that takes the starting currency and applies the spot Rate on the DLR buy day to come up with the target amount. The ideal would be what you would have gotten if you had access to a no-cost conversion on the day you decided you wanted it.
Net Cost subtracts either the USD or CAD column from the ideal amount. If it’s negative, it means the foreign exchange rate moved in our favour between the buy and sell dates. Net Cost is given in the target currency.
Journal fee is charged by Questrade
Total cost adds the journal fee and the net Cost and converts everything to CAD using the spot Rate on the buy day. If it’s negative, we actually made money doing the conversion.
% cost takes total cost and divides by the CAD column
If you want a comparative cost, a typical broker charges 1.5% of the amount changing hands. Looks like I’m doing far better than that so far!
And by “cash” I mean either ICSH or ZMMK, which are ultra-short-term bond funds denominated in USD and CAD, respectively. They are both featured as ETF All-Stars.↩︎
“Journaling” is the technical term for moving an interlisted stock/ETF from the CAD side to the USD side of your account or vice versa. ↩︎
An attractive feature of Questrade, among others ↩︎
This effect is often masked by the volatility in the asset you’re buying, but when you buy very stable priced assets like ZMMK or ICSH or CASH it becomes quite noticeable. ↩︎
And 0.07% happens to be one cent divided by the current DLR Canadian price of $14.12. And 0.1% happens to be one cent divided by the current DLR.u price of $10.24 USD. ↩︎
I have a lot of US dollar assets in my retirement portfolio. I’m not really convinced it’s a good idea, but it has taught me the ins and outs of USD foreign exchange rates. Here I’m talking about getting access to (or changing from) US funds for the purposes of investing in your brokerage account. Getting access to US funds to buy things is a different1 animal, one that I covered in a previous post.
Here’s a few things I’ve learned.
Google is your friend for real time foreign exchange (FX) rates
“1000 USD in CAD” is a terrific search term to get an instant FX rate. (also: Euro, GBP, THB…). This is as close as you’ll get for the absolute best FX rate and should serve as your target.
For most brokerages, foreign exchange is a profit center
Meaning: They’re making money every time you convert one currency to another, usually on the order of 1.5% a transaction. Some providers seem to go to great lengths to hide what rate they are using on any given transaction. (I’m looking at you, QTrade2).
There are exceptions in the brokerage community, to be sure.
Interactive Brokers comes very close to the ideal rate for any sizable transaction3 and is the big winner when it comes to converting currency for investing purposes45
Wealthsimple recently introduced a tiered FX rate depending on how much you’re converting6:
Under $10k, 1.5%
Up to $25k, 1%
Up to $100k, 0.5%
Over $100k, 0%
The cheapest way to convert at most brokerages is to use Norbert’s Gambit
Norbert’s Gambit, in a nutshell, involves the following steps.
Buy an interlisted Canadian stock or ETF in Canadian dollars. “Interlisted” means that the stock trades on both Canadian and US stocks exchanges. Most will suggest using Global X’s US Dollar Currency ETF, namely DLR/DLR.U, but I’ve also used Royal Bank (RY7). There’s a few lists out there that are periodically updated:
Move the stock or ETF to the US side of your account8. The technical term for doing this is called “journaling” your shares.
Sell the US stock on the US side of the account, and settle the trade in US dollars.
Result: you get US dollars from the Canadian dollars you used in the first step, minus any fees9,10.
I must say at this point that although the steps are reasonably straightforward, there are usually delays introduced at each step. For example, you probably have to wait a day for the initial trade to settle before making the journaling request. And journaling may not be instantaneous either11.
With no guarantee that any of these are accurate, here are the specific steps to do the Gambit on a number of popular platforms.
For most people. Since I am a CIBC USD savings account client, using Norbert’s Gambit is also a way for me to fund my USD shopping purchases. ↩︎
When attempting to buy a USD ETF from my Canadian account, the only indication I’m about to get fleeced is the warning message “The account funds do not match the market currency. Currency conversion and foreign exchange rates will apply.” No indication of what the exchange rate they are using. ↩︎
But that web interface, wow is it ever complicated ↩︎
See https://www.wealthsimple.com/en-ca/legal/fees/trade for the details. You’ll need a Wealthsimple USD account to pull this off, of course, and the only kind of USD account Wealthsimple offers is non-registered. ↩︎
Did this at BMO Investorline since you cannot buy DLR online. Apparently you can buy it if you call in your order. At BMO using RY, I was able to get USD on the same day. ↩︎
HOW to do this will vary considerably depending on who your broker is. Best to Google for specific instructions involving your broker. ↩︎
Possibly for buying and selling the ETF, possibly a fee imposed for journaling, something Questrade is doing starting April 1, 2025. ↩︎
And minus (or plus) any changes in the price of the thing you bought. Depending on your broker, each step in the process may take a day or two. If you do the Gambit often enough, I figure this sort of thing just averages out. Sometimes you win, sometimes you lose. ↩︎
I’m not sure when I first made a purchase of a USD-denominated ETF. Probably over 10 years ago. Clearly, I thought it was a good idea, because as of today I find that 57% of my retirement savings1 are denominated in US Dollars.
And unlike other people I’ve talked to, there’s no underlying rationale for that. I’ve never earned employment income in USD and I don’t own property in the US. So why?
I’m a cheapskate.
I started investing in USD based ETFs simply because they were a much better deal than their Canadian equivalents. This is less true now than it used to be, but it’s still true. Take for example the comparison between comparable USD and CAD ETFs that track the same index:
The Canadian market has become more competitive, and MERs have come down, but given the size of the US market, it’s still cheaper to invest there.
I’m not a very savvy cheapskate.
So although the MERs of US ETFs were stunningly attractive, I failed to consider the cost of currency conversion. For this I blame naivete as well as a lack of transparency on the part of my provider. It was not possible for me to easily figure out how much each CAD to USD transaction was costing me. A good estimate is about 1.5% the cost of the transaction, but some providers make this much cheaper5.
I also had USD investments in my TFSAs, which, from a tax perspective, isn’t the best idea.
Over time, I discovered the joys of Norbert’s Gambit to do currency transactions on the cheap and I became more savvy. And I eliminated all US holdings from my TFSA.
Preparing for Retirement
In preparing my portfolio for retirement (steps I took are outlined here), I did seriously consider converting everything to CAD in the interest of keeping things simple. I did not, and here’s why:
I figured that having ready access to USD would be rather useful to retired me, since I do vacation there. And I had made other preparations in light of that, setting up a USD credit card and USD savings account for RRIF payments to go to.
Although I knew that having USD RRIFs would make getting paid in retirement more complicated, I thought I had worked out a plan with my provider6 that would make extracting USD RRIF payments achievable, with some effort on my part.
I sort-of liked having some of my investments in USD since it’s a stable currency. Usually.
My provider decided to backtrack on allowing me to extract USD from my USD RRIF;7 we’re still going back and forth on that front, but my friends at QTrade are on my naughty list as a result. I’m not hopeful.
What it means practically is that although the value of my USD RRIF is used to calculate my RRIF minimums, I can only withdraw RRIF payments from the Canadian side. At present, the Canadian side of my RRIF will fund my RRIF minimum payments for a while, but at some point I’ll have to use Norbert’s Gambit to move funds from the USD RRIF to the CAD RRIF.
My Advice
I don’t think that holding USD assets in retirement — especially in a RRIF — is a great idea for the DIYer. Unless platform providers give really clear processes8 for how to extract that money from a USD RRIF, expect trouble.
At some point, I will either switch providers to find one that supports my requirements9, or I will convert everything to CAD. Right now, I have a process that works, but older me I expect will find it too complicated.
Majority of the USD holdings are in my / my spouse’s RRIF; small portion is in my non-registered account. ↩︎
Not an apples to apples comparison, admittedly. This ETF is hedged so it’s less impacted by changes in the CAD/USD exchange rate but this comes at a cost. ↩︎
This is ALMOST the same thing; RSSX uses a capped version of the index ↩︎
And try as I might, I couldn’t find a USD ETF that invested in the TSX/S&P 60. Not really surprising, and my USD retirement holdings have very limited Canadian exposure. AOA has about 2.4% Canadian exposure. ↩︎
The Money Engineer 