Today, I completed a currency transfer of $25,000 U.S. dollars from the U.S. side of my RRSP to the Canadian side.
The process was to buy DLR.u (an exchange traded fund that simply holds only U.S. dollars) on the U.S. side of the RRSP and have it journaled to the Canadian side and sell it there as DLR which is the same U.S. dollar fund but trading in Canadian dollars. The overall exchange rate that I got after all commissions and any bid/ask spreads was excellent as I got an exchange rate of 73.7 U.S. cents per Canadian dollar. That was very close to the wholesale rate at the time.
The total commission were 9.99 U.S. plus 9.99 Canadian. I was supposed to pay a $43 commission but the TD Direct representative had a work-around that even saved me the $43. But that would not have changed my exchange rate by more than about 0.1 cents.
Overall this was an excellent way to move money from the U.S. side of an account to the Canadian dollar side. I estimate this saved me at least $400 compared to just entering a standard transfer at TD Direct.
I still plan to move some more money in a different account suing the same method. By tomorrow, I should have some DLR (which again is effectively U.S. dollars) settled on the Canadian side of my margin account where I can sell it easily at my leisure.
The TD rep that I spoke to was knowledgeable and helpful and suggested that this whole DLR strategy only made sense for amounts over $5000 due to the fixed Commissions (and there is also the time and hassle of having to call in to do it).
As I have said before, my preferred strategy is just to keep a certain percentage of my accounts more or less permanently in U.S. dollars and not move money back and forth. But given the recent out-performance on the U.S side of my accounts and given a low Canadian dollar, and given I could use some cash on the Canadian side it seemed reasonable to move some money at this time.
As far as paper money for vacations I would just pay the fee at the bank as doing anything else is probably not worth it. For frequent trips to the U.S. get a U.S. dollar account or credit card or find a Canadian credit card that does not charge the standard 2.5% markup on all currency conversion (I believe Amazon offers one through Chase bank for Canadians).