Someone’s ears must be burning!  Since my last post (Consider exchange rate risk when contemplating foreign investments), RBC announced that it is now offering a US dollar-denominated RRSP account through its online brokerage, RBC Direct Investing, with several other banks looking to do the same.  (See the last page of their Spring 2010 Newsletter)

The advantage of these new accounts is that you only need to do the conversion from Canadian to US funds once.  Then you can buy and sell US dollar denominated stocks, bonds, etc. without worrying about exchange rate fluctuations, because your US dollars will remain US dollars until you decide to convert them back to Canadian. 

RBC will also be offering such opportunities in its Registered Retirement Income Funds (RRIF) and Tax Free Savings Accounts (TSFA) as well.

No word on other currencies being considered for this type of account, but given our proximity and knowledge of the US economy the US is a logical first choice.

For more information on these developments see Rob Carrick’s article “Online brokers lower cost of U.S. stocks in RRSPs.”