Norbert’s Gambit can often help to save large amounts of money on currency transactions, but is it right for you?
First, its important to realize that Norbert’s Gambit becomes more efficient when you are changing larger sums of money. If you need to pay brokerage commissions on both sides of the transaction, it might not be worth using the Gambit for smaller amounts (say $1,000 or less).
If you are using a discount broker like Questrade (or another that offers free ETF purchases) this will tend to make Norbert’s Gambit efficient at smaller amounts. Doing the transaction at the right time of day, when liquidity is good, will help too.
Second, be aware that you will need to open a brokerage account to use Norbert’s Gambit. You may be able to open one with your existing bank (e.g. RBC, TD, BMO), or you may choose to open a trading account with one of the online brokerages like Questrade.
Lastly, you should know that many brokerages and banks offer excellent exchange rates for much larger sums of money. For example, if you are changing more than $200,000 you will probably get a rate from your bank that will match Norbert’s Gambit. Just make sure to put it through your local branch and get them to call their trading desk for the preferred rate.