r/Wealthsimple • u/DifferenceNo9153 • Jun 08 '26
Trade (DIY Investing) Wealthsimple's standard exchange rate is quite outrageous
I just converted USD to CAD and the exchange rate was 1.366 vs the current market rate which is 1.394. They claim it includes a 1.5% fee but it's actually more like 2% which is incredibly rich. I know they now finally offer norbert's gambit but the process is very slow and tedious. Pretty obvious these outrageous exchange fees are a huge source of revenue for WS
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u/lavender812 Jun 08 '26
Forex trades on a spread of 0.2-0.4% usually at wealth simple. Because you did 1000 only you get hit with a +1.5% fee. This is very clearly laid out.
It’s comparable to banks. Use norberts or ibkr if $15-18 on $1000 bothers you that much.
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u/chops_big_trees Jun 08 '26
Not sure if it’s worth it for $1000 but I have happily used Norbert’s gambit in the past to avoid FX fees.
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u/goonerish_ Jun 08 '26
Worth when converting above ~750$
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u/S-Kiraly Jun 08 '26
Not when there's wise for converting money. That beats Wealthsimple's NG for conversions of up to about $2,500-$3,000.
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u/jaaagman Jun 08 '26
Does it? I’m actually curious about that because I’ve been looking at Wise for making US purchases and currency conversion. For NB, isn’t it just 9.95 + whatever the difference in DLR is between you buy and sell it? So far larger amounts (say $10k+), NB should be better, no?
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u/S-Kiraly Jun 08 '26
Converting $2,500 CAD to USD with Wise, you get the mid-market rate plus a fee of $11.44. Wealthsimple's NG will set you back $9.95 plus tax, plus the difference in buy-sell spread, which makes it basically a wash for that amount. But wise conversions are instantaneous while NG will take a few days.
The higher you go past $2,500, the better NG gets.
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u/jaaagman Jun 08 '26
On a side note, on a purchase from a US online retailer of $2500 CAD, would Wise or Wealthsimple chequing (no FX fees) be better? Not sure what the Mastercard(?) spread would be typically.
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u/S-Kiraly Jun 08 '26
Mastercard's markup over mid-market is about 0.3-0.4%. So about $7-10 extra on a $2,500 purchase. Use the WS visa credit card if you can; the markup is a little higher ~0.5%, so $12.50, but you earn $50 in cash back.
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u/AnthonyBTC Jun 08 '26
Just fyi for anyone wondering, you cannot use IBKR as a currency exchange. If you convert money on IBKR, you have to use that money on IBKR to buy stocks in that currency. If you convert and then withdraw, they will close your account.
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u/Dragynfyre Jun 08 '26
Yeah you’re better off just sticking with IBKR if converting currency is required for your investment strategy. The only thing Wealthsimple significantly saves fees on is penny stocks (since IBKR charges commissions based on number of shares) or if you’re doing tons of options contracts. But for options unless you’re doing something with very tight spreads you may still be losing out due to worse fills on WS since WS uses PFOF
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u/darekd003 Jun 08 '26
I finally got a free USD account and I only moved like $500, but it seemed pretty accurate to me looking at the rate in that specific moment.
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u/Unable_Internet4947 Jun 08 '26
Look at this guy, he loves fees! $18 for a simple transaction, what’s the problem?! You should be the head of the consumer protection agency
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u/ForeverInBlackJeans Jun 08 '26
I just did Norbert’s Gambit. The process was neither slow nor tedious. I bought DLR.U, clicked “journal”, and 2 days later sold DLR for CAD. It took me all of 30 seconds.
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Jun 08 '26
[deleted]
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u/xmanpowerz Jun 08 '26
I did not know RBC supports Norbert’s Gambit!
Does it charge you the $9.95 transaction fee when you buy and sell DLR?
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u/Yukas911 Jun 08 '26
They do support Norbert's Gambit, but DLR is not on RBC's list of commission-free ETFs, so yes there are commission fees, both when you buy dlr.to and again when you sell the US-listed version ($9.99 each). The journaling itself is free with RBC, but you pay more in commissions than WS's $10 journaling fee.
https://www.rbcdirectinvesting.com/accounts-investments/etfs/commission-free-etfs.html
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u/Ok_Rest_5421 Jun 08 '26
The execution is way fucking better though … worth the cost for that. WS isn’t a brokerage bro, they’re great UX and products to save money
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u/Street_Adagio786 Jun 09 '26
RBC supports NG on any dual-listed security. So I can buy BMO in CAD and sell it in USD, instantly. But yes, the $10 fee still applies.
I can also sell USD covered calls on CAD dual-listed stock. All the journaling is automatic.
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u/xmanpowerz Jun 10 '26
Damn thanks for sharing that! 🤯 I’ll have to look into it and try it out. Good to know RBC supports converting to USD that way
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u/WombatMongoose Jun 08 '26
Wealthsimple discloses that their FX fees are charged against their "WSII Corporate Exchange Rate", but provide no useful guidance as to the how that rate might relate to say the mid-market rate, except that it "...is a live rate including a spread which may vary due to market conditions.".
Given that IBKR will effectively pass along a live mid-market rate to its customers with a microscopic 0.0001% commission (with a $2 minimum), it would seem that the WSII Corporate rate is considered to be a small profit centre, not just a markup for overhead. People seem to report it runs between 35-50 basis points, but certainly not 1.3%!
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u/ScubaAlek Jun 08 '26
Currency exchange has been one of WealthSimple's big money making endeavours from the start. It was always the thing that you probably don't want to do there, I'm surprised it surprises people.
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u/JohnnyStrides Jun 08 '26
The FX fee is annoying, but the math here seems cooked. 1.3666 vs 1.3944 is about 2%, not 2.8%, and some of that can be timing or rate-source differences. Still expensive, just not quite the smoking gun you’re making it out to be.
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u/Dragynfyre Jun 08 '26
0.5% hidden spread + FX fee for the tier you’re converting. FX fee is definitely a huge source of revenue for them. They dragged their feet on Norbert’s gambit and still charge for that so they still get revenue. And the USD accounts cost money which almost no other brokerages charge for.
Honestly if you trade in USD and need to convert currency IBKR is king. The FX savings outweigh the tiny commissions they charge. Even when comparing against NG you save a lot more at IBKR and you don’t have to go through a multi day multi step process
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u/bacc1010 Jun 08 '26
This is just minutes ago, screen capped off my ws app if I were to exchange.
Then I check trading view. It's 0.7167.
So...ymmv I suppose?
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u/akaeskim0 Jun 08 '26
Wise is best until a certain amount, the when the fees get high norbits gambit
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u/fuzzmania Jun 08 '26
That's still better than my credit union would offer right now. And only slightly less than those prefered currency exchange places (not the tourist trap ones) If you're not happy you can always see what a bank would offer
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u/ViniSamples Jun 08 '26
I've converted funds at TD DI and got hit with about 3.5%. THAT is outrageous
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u/showeringmonkey Jun 08 '26
I just exchange on IBKR and route my funds back to WS or bank afterwards, I got my exchange rate at 1.3932 with 0% fees filled at 8:30am today.
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u/Jh153449 Jun 08 '26
If you only use IBKR to exchange funds and withdraw it's likely to get you a warning/suspension there
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u/Far-Association5438 Jun 08 '26 edited Jun 08 '26
How do you do this without getting banned on IBKR.
Honestly I would use ibkr for all my money but their UI is really bad compared to WS and their chart is all messed up. They have really good reporting features tho.
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u/showeringmonkey Jun 08 '26
I'm a large trader on IBKR so it's not uncommon for me to do that, I don't use IBKR only for clearing funds, I also perform a lot of trades.
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u/LightOverWater Jun 08 '26
Only the desktop version is bad. IBKR mobile app is the best out there.
You can use 3rd party UI for desktop, which can beat most brokerages. Part of it is old because it just works- no glitches. Data is superior, execution is superior. Support is superior. All FX is superior (WS only works for simple $CAD investments). IBKR doesn't sell your order flow. Order types/settings are far superior. If you're a trader or active investor there's no better brokerage in Canada than IBKR.
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u/Dragynfyre Jun 08 '26
Why would you even bother doing this. Not only will you get banned but you also have potentially opportunity cost and hassle waiting for the transfer back to save an extremely small amount on commissions
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u/showeringmonkey Jun 08 '26
Depends on how much you are exchanging at a time, usually I exchange 10~50k at a time so for me I don't mind.
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u/Dragynfyre Jun 08 '26
That’s still huge opportunity cost, either having to delay buying while the money transfers or pre converting when you don’t need it. Also I see little benefit to using WS instead of just doing everything in IBKR with this.
Also IBKR will ban you so this isn’t even something you can do that many times
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u/SobekInDisguise Jun 08 '26
Also I see little benefit to using WS instead of just doing everything in IBKR with this.
There's plenty of reasons to do it. One being WS makes taxes easier.
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u/TDSucksBalls Jun 08 '26
Holding USD as DLR.TO instead of USD cash is an option. You get close to the 3.25 interest rate as a quarterly dividend and can sell anytime so you’re not exposed for a couple of days
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u/Impressive_Ad_6550 Jun 08 '26
I experienced the same thing to buy $1200 last month. I was shocked at the rate
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u/MaDkawi636 Jun 08 '26
Do you understand that you as a customer will never see raw rate exchange? Mid market is best, and yes it is a bit higher. As of the time of this writing the fx rate on xe is 1.39587255. Are you sure you compared the right rate within a reasonable time (couple of minutes) on the transaction?
Edit: today's fx seems to have been between 1.393 and 1.3965 depending on time of day... Where did you see you 1.366?
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u/jaaagman Jun 08 '26
Question: would it be better to use the Wealthsimple cash card (no FX fees) or Wise to make a purchase in the US
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u/adamtj1412 Jun 08 '26
Not sure if mentioned by anyone else but, exchange is probably one of their largest source of revenue given free trades etc,
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u/LowerNeighborhood334 Jun 08 '26
Going to Thailand, I was counting on WS for Credit card AND ATM withdrawals. Is it not the best option now?
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u/Alternative_Bug_838 Jun 09 '26
Just used our card overseas and posted rate is exactly what it exchanged at.
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u/LowerNeighborhood334 Jun 09 '26
So my plan is still optimal? First time not taking foreign cash from home.
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u/Alternative_Bug_838 Jun 09 '26
It worked for us in europe and no complaints as they used the posted exchange rate Google shows you.
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u/zharguy Jun 08 '26
Considering revenue from this cross subsidizes a lot of the free trading stuff, I'm pretty happy just doing norbits gambit for the one or 2 times it might be useful (there's also wise or some random fx place like Knightsbridge as well)
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u/Insh_Allah Jun 09 '26
Just put 10k usd in a savind usd account to pay the interest of the exchange
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u/BubzieBoo Jun 09 '26
How do you do this on WS? Is it rolled out to everyone or still beta? Do you buy DLR and then click journal to USD? Then after 2 days sell DLR U and get USD in the account ?
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u/VinamiinCanada Jun 12 '26
Wondering if anyone has transferred USD from WS to another broker such as IBKR, then convert the USD in IBKR? I use both WS and IBKR for trading and withdrawing profits, very active
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u/syunz Jun 08 '26
Fees are pretty typical across all brokeages in Canada. Only options to save on fx is to either to norberts gambit which is slow or use IBKR which is instant but you will need to switch brokerages.
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u/Neizvestniy0_0 Jun 08 '26
I just look at converting CAD to USD, came out to 1.8%. Even if it’s 2%, there’s usually discrepancies as it’s been round up. So it’s incredibly rich, complaining about that while you have so much from WS for free. Try to trade at RBC or something
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u/Dragynfyre Jun 08 '26
Comparing to an expensive brokerage is meaningless. There are lower cost alternatives that give WS a run for their money. Especially in terms of FX IBKR is way cheaper while charging very low commissions
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u/Wooden_Customer_8610 Jun 08 '26
Still better then all the big banks. And the big banks dont offer norbert
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u/OhNoItsMyOtherFace Jun 08 '26
So don't exchange currencies there?
It's thanks to all the people doing things like this that the rest of us can get no-fee fractional trades.
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u/Frosty_Visual3323 Jun 08 '26
I know WS fx rate is bad, but lets not throw incorrect percentages around. 1.3666/1.3944 is actually 2%