I Sold My U.S. Vacation Home…Now What?

vacation home

Photo: Eisenlohr/Getty Images

Gordon Pape advises a reader on managing the U.S. funds he gained from selling his vacation home south of the border.

Q – My wife and I recently sold our U.S. vacation home. We took the
cash and transferred some into Canadian dollars. We will use these
dollars to pay our Canadian tax obligations as well as a couple of large
purchases. We are left with over US$200,000. At the moment these
funds are sitting in a U.S. dollar account at RBC. This account pays next to no interest. Presently we have no need for this money. In the future
we would like to use some for travel.

It might be a good time because of the exchange rate to transfer some of
these dollars to Canadian. What do you think? Also, we would like to
keep most of this money in U.S. funds. Do you have a suggestion as to
where we could park/invest this money? Many thanks! – Martin K.,
Okotoks, Alberta

A – I think your idea of keeping most of the money in U.S. dollars is
wise. It’s hard to see the Canadian dollar significantly appreciating in
value in the near- to medium-term unless there is a sudden spike in oil
prices – which is highly doubtful.

As to where to park the money, according to RateHub.ca, the best rate
available is 1.35 per cent on a one-year GIC at ICICI Bank Canada, a
subsidiary of a large Indian bank. – G.P.

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