I am from Canada and looking to start a business with a partner in the states. For our business I will need to transfer cpaital from my IB account to his IB account on a frequent basis (once per day for the first 6 months and than once a week after). The flows will be going both ways. For example today I might be sending him money and tomorrow he might be sending me money. I was thinking of opening up a joint business account with chase to act as the intermediary but they responded by saying our account will be flagged and frozen if we are doing that kind of daily money transfer. Transfers will most likely range between 25k-75k. Does anyone know how to do quick wire transfers? ps In Canada our banks take 3 business days to clear a wire transfer. Chase and US Bank said it would only take them a day. Thanks guys
That seems like unnecessary busy work. Even the banks in Canada don't do this. They net it out on a weekly basis (iirc.)
After talking with IB they said I can transfer in and out to a joint account Unfortunatelty it will be necessary
Yeah I can see the need for it to build trust, I presume that's the reason. Escrow could work as well.
I don't remember the cut off but didn't you ask them what amount you can move back n forth daily without being flagged ? They (the bank) may say 8k. Anyways, you should call other banks to see what you can do. Here in Canada I move money around weekly or monthly from one of my accounts to another via Interac e-transfer and one of my accounts at another bank that is linked to my business account in France and U.S. (the accounts are all in my name) although I realize it may not be helpful because you said from IB to a bank (account) in the U.S. belonging to someone else. Thus, my post is about Canada bank to a bank in another country. One of the reasons why I move funds from country to another country is to take advantage of changes in the currency rates assuming I can make a profit after the banking takes out their currency rate exchange fees. I'm surprise your account rep at your bank isn't helping you with this for that amount of money transfers. Also, I've never heard of a bank in Canada taking 3 days on a wire transfer to a U.S. account unless you meant it takes 3 days for the other account to be credited with the wire transfer. Talk to your bank about banks they do business in the U.S. and you may then need to ask that friend of yours to open an account with that U.S. bank. Last of all, I thought Chase was one of those banks that linked accounts in the same name of the account holder between U.S. and Canada. Depending on your relationship with the bank, type of account and funds...they may even wave your fees. wrbtrader
Perhaps crypto can help with that, I know you can make lots of transfers at low fees with BTC lightening network
Are you also doing the currency exchange each time or does it stay in CAD or USD the entire time? I have a subsidiary in Canada and a U.S. parent and have this same kind of thing, although it's every couple weeks vice every day. My Canadian company RBC account has both a USD and CAD account, and I can initiate wires or direct deposit payments from that account to any account in the U.S. or Canada. So if I was in your situation and everything was staying in USD I'd just wire or direct deposit in and out of that RBC USD account to the U.S. bank USD account. I presume you could do the same thing in CAD if your friend can find a U.S. bank that allows you to set up a CAD denominated account. If you need to convert currency every time there's really no option that will work other than IB because the bank currency exchange rate absolutely rapes you no matter the bank and even someone like Transferwise who has the next best rates isn't sustainable long-term in your situation. There is Norberts Gambit which involves buying dual listed stocks, but in your case the time to do that would probably be prohibitive. At the end of the day you will almost certainly get flagged by the AML screens. It's best to explain what you're planning to do in advance to your account manager (make sure you get a commercial account with a real, live account manager you can actually go talk to in person). Then plan for your account to be frozen a few weeks in, when the compliance department of the bank steps in without talking to your account manager. Then you call your account manager, have some meetings with their compliance departments, and a couple weeks and bunch of hassle later you're good. But you have to plan for that disruption. Times 2 because your friend will get the same thing from his bank. Is there no way you can set up a secured letter of credit or something similar to avoid this? Feel free to PM me if you want to brainstorm.
Unless IB is a critical piece consider trading at JPM as well as banking there. Depending on size you may be able to bring your costs close. The scale will be a big issue.
This is exactly the reason why we need to get rid of banks....not their ph...cking business how many times I send monies back and forth.... And if your relationship manager would have HALF a brain, he would have been educated that drug dealers, smugglers of weapons, sanction breakers and pedophiles work in much more sinister ways..... I was once annoying my bank by sending out 10.000 transactions each USD 10.... They got the "warning".....!