What is the best way to convert USD to CAD (or CAD to USD)?

We live next to the world’s largest economy and so it is no surprise that a majority of Canadians find themselves in the position of having to convert USD to CAD on a regular basis.  What is the best way to do it?  Here are some things to look out for:

• Get the best exchange rate. Exchange rates change over time so ask your bank what rate it offers at any given point of time and compare it at the same time to another service provider.  Don’t get caught up in unnecessary complexities.  At the end of the day it is about getting the most for your money.  Ask “how much will I get in exchange for $XXXX dollars?”
• Look for a service provider that is transparent with their exchange rates. Avoid companies and websites that provide only “indicative rates” or “spot rates” or “inter-bank” rates on their websites.  If they are not upfront about their exchange rates immediately, they are likely not trustworthy.  Ask “is this the exchange rate that I would get if I were to book now”?
• Look for reputable service provider. Find an fx service provider that is regulated but also one that has physical locations you can visit and one that has been in business for a long time.  If your service provider is hiding behind a website or is based outside of Canada or doesn’t have a long history of providing the service, you might want to think twice.
• Ask whether you can convert online and on the phone and in person. Exchange rates are moving all the time.  You might be in Germany and it is 10 pm and you want to make a conversion.  Can you do it?  If the service provider does not allow you to book online as well as on the phone then you might want to look elsewhere.