Foreign Bank Stocks and Especially Canadian
What are the advantages and disadvantages of investing in Canadian Banks?
Terry Says
If you’re talking about just putting money into a foreign bank, you have “exchange-rate” risk. That is, currently the Canadian dollar is worth about 72 cents compared to the American dollar. If Canada falls into a recession, the exchange rate could drop, costing you the extra interest you earn. Of course, since Canada is a sort of “petro-dollar” if oil prices soar, the Canadian dollar would get stronger. And when you convert back to American dollars in the future, you would get a windfall.
Also be aware that you must file a FATCA form with the IRS every year if you have more than $25,000 in an “offshore bank.”
If you are talking about buying stock in a foreign bank — just don’t.
