Breaking Up Isn’t Hard To Do: Transferring Your RRSP
You’ve switched banks. You’ve moved. You want to start do-it-yourselfing in a discount brokerage account. Whatever the reason, you need to know how to transfer your RRSP, TFSA, or RESP money from one institution to another (or sometimes, from one part of an institution to another), and you want to make sure that it stays tax-sheltered, tax free, or tax deferred while you’re doing it.
No problem. Let me repeat: no problem. Here’s how to transfer your RRSP to another bank.
How to Transfer Your RRSP
Transfers between institutions – especially transfers of money registered as a Retirement Savings Plan, a Tax Free Savings Account, or a Registered Education Savings Plan – seem complicated and intimidating, but are in fact are regulated events, governed by federal forms, timelines, and procedures. Let’s all shout “hooray!” for bureaucracy and the tax man, shall we?
The first and most important mental hurdle to jump is this: you don’t have to break up with your bank or your advisor. There’s no scenario in which you’ll need to sit down across from someone who wants to keep your money and convince them to give it to you. You don’t have to worry about phone calls, or salesmanship, or awkward “it’s not me, it’s you” conversations, because it’s the receiving institution that initiates and completes the transfer.
If your RRSP is at Red Bank, and you want to move it to Green Bank’s self-directed brokerage, you go to Green Bank to do it.
The next hurdle that you need to get over is that you have the power to hold the receiving institution to an exacting standard of procedural correctness. They’re the ones filling out the transfer forms. They’re the ones with entire back offices filled with staff whose only job is to shepherd innocent flocks of money from one institution to another unharmed. Your job is to know what is supposed to happen and when, so you can hold their feet to the fire if it doesn’t.
Fortunately, with a tiny little bit of effort, and maybe a phone call or two, you can collect the necessary list of Things to Watch For and be as prepared as you need to be.
Before Signing the Paperwork:
- Track down and make sure you have a copy of the most recent statement that shows how much you have invested and in what. Are you cashing it all out and transferring the cash, are you hoping to keep all of your investments as-is (“in-kind” is the terminology you’re looking for) during the transfer, or do you want some combination of in-kind and in-cash? Make notes, and make sure the receiving institution knows exactly what you want.
- Is the institution you’re leaving going to charge you a fee to transfer your RRSP out? You can dig through their schedule of fees and commissions – which most banks and investment dealers have made available online – or you can ask directly by calling or live-chatting or whatever the young folks are doing these days.
- While you’re live-chatting about fees and commissions, take a minute to ask about how your account is registered. Is it the proceeds from an old pension plan? What province was it registered in, or does it fall under federal legislation? Is it a spousal RRSP? A family RESP or individual plan? If you didn’t keep the original documentation from way back when you opened the account, you’ll want to track this information down so the tax man can’t refuse the transfer and make you start all over again.
- Will the receiving institution rebate some or all of the fee charged for the transfer? If they aren’t offering it as an explicit promotion, it never hurts to ask. It’s a rare salesperson that doesn’t have the authority to sweeten the pot when faced with a pile of money about to land on their books.
- Ask the receiving institution how long a transfer like yours should take, and for the “When Should I Be Concerned” date. Write it on your calendar, create an alert on your phone, or put a post-it note on your coffee-pot.
While You’re Waiting for the Transfer
- If you’ve reached the “When Should I Be Concerned” date, and the transfer isn’t complete, be concerned. Call the receiving institution first, and ask if they can see a pending transaction or any notes on the file that might indicate a problem. If they don’t know anything, call the sending institution. Ask questions until you find someone who knows what they’re talking about, get the full story, and take names.
Once the Transfer is Complete
- Once the money is where it’s supposed to be, you need to look at your statements; both the one from the institution that used to have your money, and the one from the institution that has it now. Were you charged a transfer fee? Was it rebated? Do you have the right amount of cash or the right investments? If the answer is no, start making some noise at the receiving institution. Procedural correctness is their responsibility, remember?
If your investments are now sitting prettily (and registered correctly with the tax man) at your new institution of choice, happy investing. The crooners were wrong: breaking up ISN’T hard to do.
Anyone have any experience doing this within TD? I am leaving TD Waterhouse Private Investment Advise to a self directed with TD Waterhouse. They tell me I have to deal through my current advisor to make the transfer. Doesn’t make much sense.
I’m only guessing here, but it’s possible that what you’re experiencing is an internal policy. Boomer will know more, but from my banking experience it was common practice for one part of the bank to “own” a client, and have to give approval for that client to move to another part of the bank (but not externally).
If I could offer a suggestion, it would be to ask whoever it is that’s telling you to talk to PIA *why* exactly you have to talk to them. Unless the reason is “because you hold investments with PIA that aren’t available in a Waterhouse account”, then keep asking until you get someone who will do it for you.
A good, straightforward article for someone like me who a) needs hand-holding; b) gets overwhelmed and confused by all the intricacies involved; and c) is looking ahead to converting to a RIIF or annuity.
Not “hand-holding”, Tom: Cheerleading!
I have to go through this with my wife’s old retirement account from her first job. These are great tips to help me through the process. Thanks!
So how / where do you make a complaint? CIBC has just flat-out told me there is ‘no way’ to transfer a RESP. I do ALL my banking with them – and I’m so angry now that I think with little effort I can change EVERYTHING to another bank. ANY other bank!
The only kind of RESP you *can’t* transfer is a Group RESP – described here by the Investor Education Fund (http://www.getsmarteraboutmoney.ca/en/managing-your-money/investing/resps-for-education/Pages/understanding-group-resps.aspx#.Unz-LuI4lFI). If you have a family RESP or individual RESP with a bank or an investment company, it absolutely *is* transferable, provided the details on both accounts are exactly the same.
For example: you are the only subscriber (“owner”) of the RESP, and you have two kids, who are both named as beneficiaries of the RESP. The original account and the new account both have to be the same in those respects for the transfer to be acceptable to Human Resources and Development Canada. Their transfer form is here: http://www.hrsdc.gc.ca/eng/jobs/student/promoters/forms/SDE0088EN.pdf, which is what your bank should be using to transfer, unless – as I said – you’re trying to transfer a group plan.
I might not have said this very clearly, so don’t hesitate to ask for clarification!
Do you want to transfer your RESP *to* CIBC, or to another bank? As Sandi says, you speak to whoever is going to get the money delivered to them.
If they are refusing to help you transfer a RESP *to* CIBC, you need to give us a bit more info.
For example, many banks cannot transfer GICs until they are matured and deposited into a cash account. That’s because the new bank does not have any way to hold a GIC from the old bank. If that’s the problem, you need to arrange to have all GICs mature to a daily interest cash account, and then transfer them.
If the problem is that your RESP is at one of those “group plan” places, you may have a lot of trouble transferring it any where and the fees and lost money for making the transfer will be very high. Unlike self-directed or bank RESPs, the group insurance plans ones are full of problems.
I hope something can be worked out for you! (I don’t work for CIBC, by the way.)
I was trying to transfer to CIBC – now the CIBC where it *was* held has collapsed the GIC’s early 🙁 So now I’m just going to open something up somewhere else and move it all with me when I go on vacation later this month.
Oh, and it was a ‘family’ plan for my two kids… one of whom is now 20, so the advisor said ‘well your kid is already too old, so it doesn’t matter now anyway’! Just another reason I’m leaving that bank.
Wow! Sounds like a good one to leave! If you opened the plan for your 20-year-old, does that guy even know you can keep the RESP open till your 20-year-old is 34! (Plans can be open for 35 years.) I have relatives who didn’t go to college till they were in their mid-20s.
I wish I could recommend a great place to take it to, but I don’t know of one. I’m at BMO right now, but it’s nothing special.
PS Make sure the money does move as a *transfer* when you move it, so you don’t have to pay back the CESG.
@Taking_Control – I made the switch from TD Waterhouse Private Investment Advise to TD Waterhouse Brokerage (now TD Direct Investing). They also told me to talk to my then-advisor, which I did. I explained to him that I was ready to go the do-it-yourself route and he made a couple mild volleys to try to warn me about pitfalls to look out for and against which he could protect me. When I resisted, he said he would look after all the transfer documents, confirmed what I wanted moved in-kind and what I wanted in cash, and took care of all the paperwork painlessly for me. I hope it works out that easily for you!
Does this mean you could transfer an Investors Edge account RRIF without having to sell all the stocks and repurchasing them in the new account with a different bank?
You can absolutely do that.
I actually had the WORST time trying to do this. My old bank wanted to charge $150 for my TFSA and $150 for my RRSP for the transfer. The form got lost several times and I had to make many phone calls. Lots of frustration. I hope I was an anomily.
It wasn’t, unfortunately. Mistakes happen all the time, which is why the consumer’s job is to know what “right” looks like, and keep making noise until “reality” and “right” look the same.
I’ve found my transfers out of and into ING Direct have all gone well. My transfers out from BMO and CIBC were slower but eventually made it. The only one I had trouble moving was a LIRA. I think they needed some other form to be signed, but rather than contact me they just gave up and shredded it. I eventually moved it to another location instead.
All done. Transfer is in the works. Was misinformed at the branch which led to some initial confusion. Now what to look at versus those high MER mutual funds I was holding.
Where is that post about investing from within my RRSP? 😉
Now *there’s* some fast work!
Great post Sandi. Having done this in the past for my wife’s account, the key is, make great friends with the institution getting your money. They will fight for it to increase their AUM. 😉
Mark
You hit the proverbial nail Mark. Knowing what the incentive is and LEVERAGING THE HECK OUT OF IT is the most effective way to approach the transaction.
This article is very timely for me as I’ve been in the “process” of getting RRSP funds transferred from an insurance company (Segregated Funds) to my Investor’s Edge account at CIBC. I’ve been stuck harassing them for the last 2 months which seems ridiculous! CIBC seems very unorganized. You wouldn’t think it would be that difficult to give them funds. I have ALL of my products with them as well and have been very disappointed with the level of service.
Any hints as to how to get money out of a group RRSP (while remaining an employee)?
In these RRSPs, the declaration of trust (which has not been sent to me, despite repeated requests) typically grants full control over the RRSP to the employer. The legality seems questionable, but I have not been able to find any way around it.
I am with TD and informed that I can only transfer my rasp with a letter and not by email/fax/calling. I am out of country and find communication very difficult with this security requirements to make contact as an account holder. What is the Canadian law with reference to my lack of authority to move my funds when I want to move them?
I decided to move my RSP from TD to Scotiabank. My Scotiabank completed all the forms, I signed and got the faxed to TD.
Four weeks later – no transfer done, TD branch representative “I’m not in charge to look after transfer request”, I called Easy Line and got transfered to 8 different persons, explain to each one what I need and none could provide an answer.
Eight weeks now sinces the transfer request – nothing.
I don’t know what to do. TD is playing the “no fax request received game” even if my Scotiabank advisor have the confirmations as they went through. No luck over the phone with Easy Line (not easy at all!). I was given 3 different fax numbers so far, I spoke countless times on the phone, i got transfered form A to Z …no results.
Any ideea what else I can do to have my RSP transfer done?
Thank you
Hi Gabriel, sorry to hear that you’ve had so much trouble with this. I think you need to press Scotia to take action, not TD. If they want your business they need to take the steps to make it happen. What has your Scotia advisor said about all this?
Quick question for anyone who might know… I am moving my RRSP from Scotiabank to a discount broker. The transfer form request is “in cash” instead of “in kind” as I want to switch from Mutual Funds to ETF’s. Am I able to take the money, once transferred into the RRSP account at the discount broker, and purchase ETF’s without any type of tax issues? I have a feeling as long as the money stays in the RRSP account, how it is invested is irrelevant, but would love to know if someone knows for sure!
Hi Nic, in-cash just means the mutual funds will be sold at market value and transferred over to the new brokerage account. As long as it’s an RRSP-to-RRSP transfer there won’t be any tax consequences. Once the funds have moved over to the new brokerage then you can buy ETFs with the cash inside your RRSP account.
Great, thanks for the reply Echo 🙂
I recently moved my RRSP to RBC and was charged $600 in commission fees by my former Richardson GMP adviser because RBC requested the funds in cash. Do I have to accept these fees because I didn’t educate myself about the ins and outs of transferring investment funds first? I feel that I received poor advice, i.e. no advice/warning, on both ends. Should my former adviser (with whom I still have an investment) or RBC help pay some of these fees? I’d be grateful to hear related experiences and opinions on this. Thanks.
RBC Should have known. There are ALL IN KIND OPTIONS AS WELL to save you money. Depending on the size of the account, RBC should be offering you some rebate/recovery costs.
Funds are almost always transferred “in cash”. The “commission” you were charged was likely because your former institution had deposited your funds using a “back end” or “deferred” load. The “back end” means a charge is levied when you withdraw funds the “deferred” is the load is reduced each year for up to 5, 6 or 7 years. Before that time elapses (from your deposit with them) a reducing percentage is charged. This should have been explained clearly to you by Richardson when you opened the account with them. If not, you have the ability to complain.
If I transferred a pension fund from my employer to Investor’s Group, and now want to take that money from Inverstors Group to my own TD self-directed account, is it as simple as having TD fill out the forms? I’m not sure if because it was a pension account it makes a difference… Thanks!
It is, however most pensions are “locked in” and are governed by provincial regulations (unless the company you worked for was federally mandated), so is transferred as a LIRA of LIF now that it has been moved from your original pension company (you said now with IG). TD should have the form as would any institution you are transferring to.
What is the maximum time an institution has to honour a transfer request in BC? I’ve heard it’s 90 days.
Hi Sandi,
I have a question that you may be able to help me with.
In truth, I am not asking for myself directly since all my “invested” money is already in self directed accounts of various types, so I am good to go. However, I have a friend here in Vancouver with whom I have started a “journey” of exploring/explaining the financial world, in the hope that she will eventually progress toward a better long term management of her assets.
Now, the journey is far from complete, we started a couple months ago with the tax season, where my casual conversation with her led me to suspect that her RRSP contributions and deductions were incorrectly reported with the CRA. We have since waited for her partially incorrect incorrect 2015 tax return to come, modified her return for 2014, waited for that to come back (with the 800$ that came with it, that made her happy!), then modified the 2015 again (there were more unused contributions she could not claim in her 2014 due to the max deduction limit). Right now she is waiting for her revised 015 to come back with another 900 or so. The process is slow, but it suits me just fine, we have had the time to chat once or twice a week about finances for like 7-8 weeks.
From the above, I am sure you can actually figure she is a saver. She has RSPs (fairly limited so far, but something is better than nothing!), TFSAs (she funnily refuses to confirm the number that is easiest to guesstimate, but i assume she is actually maxed out at either 40000 as of dec 31st, or 45500 contributions including 2016 already), and she does have some unregistered savings as well. By today’s standards in Vancouver she is not rich, but hey, she has no debts, lives rather frugally, has a decent if not spectacular income, so that’s a good starting point.
Currently, she pretty much holds only 2 types of savings: GICs and basic savings accounts. In particular, all or most of her TFSA and RRSP money is GICs i think, and I currently assume that the fixed term deposits are in the basic things offered by her bank(s). I think her TFSA is at TD, and her RRSP at PC Financial.
So lets say eventually she decides to move some RSPs from PCFinancial to a self directed RRSP at another institution.
Does she need to wait for the GICs to expire since they are “tied” to the emitting bank? In particular, if I want her to minimize transfer fees (and all other fees as well), is the best idea to convert her GICs slowly as they mature and put the cash in a plain savings account inside the PCFinancial RRSP until all or enough for her taste is converted to RSP cash, then initiate the transfer toward whatever she would eventually choose to use for Self directed accounts? Or can one simply say “transfer everything i own there, and the GICs will move alongside the cash, and remain payable by the original institution once held by another?
I know this is kinda silly, but the fact is I never had that issue myself, so I am not sure on what the best advice I should give her once we reach that point of our journey.
Thanks for reading and for any suggestions you may have.
Hi Ludo,
Your friend will probably have to wait to transfer her GICs until after they’ve matured, and will have to give transfer instructions before each maturity (rather than in advance).
There’s a very small chance that – depending on the kind of GICs she owns and who she asks – that she’ll be able to redeem them early if she’s willing to lose some or all of the interest she’s earned up until now.
The most likely scenario is that she’ll have to give the bank instructions for each GIC to be redeemed at maturity to a cash RRSP account at the same institution, and then to initiate the transfer out after this happens, either every time a GIC matures or once all of them have matured. I suspect that she’ll have to pay a transfer-out fee each time she transfers money from the RRSP cash account to another institution (although she should check on this), so she’ll have to weigh the costs of keeping cash un-invested as she waits to collect all the GICs prior to transfer vs. potentially paying transfer out fees one GIC maturity at at time.
Two things to check with this scenario, then:
1. Can she redeem all or some of her GICs early and what will she pay in lost interest to do so?
2. Will she pay a transfer-out fee every time she requests a transfer from her RRSP cash account?
If my suspicion is correct, and she has to wait out each GIC, then she needs to give detailed, written instructions to the bank that each GIC be redeemed to either a completely flexible and open term or to an RRSP cash account. These instructions should include account numbers, approximate amounts, and dates, and she should both keep a copy for herself and make a point to follow up with the bank at each maturity date. Believe me, banks lose future-dated maturity instructions all the time, and keeping a backup can’t hurt and will very likely help if the GICs are rolled over again instead of redeemed.
I’m glad I found this article. I’m running into nothing but headaches as I’m trying to transfer my RRSP from TD Waterhouse over to a Discount Brokerage under their RRSP. I’ve kept it simple and its all cash that needs to be transferred.
I’ve filled out the form for transfer from the Discount Brokerage and they sent it to TD. I contact TD they have nothing and give me a fax number for this request to be sent to. The Discount Brokerage does this. I contact TD again and they have nothing and instead I’m told the Discount Brokerage has to contact TD to get this done at X number provided. So I provide this info to the Discount Brokerage and still have no idea if anything is happening.
I would think that TD would have something on file within their system or from their faxes etc. When I contact the Discount Brokerage for more info as to what is going on I get no answers.
It’s no wonder people feel jaded by the banking system and financial institutions. It’s a dog eat dog world and no one cares about you.
We transferred our father’s bank accounts including a RIFF account from Scotia to RBC 2 years ago. Our Dad died in January of 2017. When we went to cash out the RIFF the beneficiaries were not there. They were listed on the Scotia Riff, but did not get transferred over to the RBC. The banking rep says he remembers that we didn’t know who it was to be. Now because of there mistake we now need to probate the will to have happen what should have been done by RBC, which is going to cost us 2500.00. Is there any recourse for us? We have sent a complaint into RBC and are awaiting a response. Did they follow the transfer procedure? Is there any pressure we can apply at this point to have this fixed? (If you require any more info please let me know.)
Thanks
Roy r
This is not the answer you will want to receive, but my take here is that RBC is most likely going to be completely not at fault. Please let me explain before getting frustrated at the answer.
As I understand it, a RRSP/RRIF/LIRA/etc transfer is a mechanism that happens between two pre-existing accounts. In other words, your Dad’s Scotia RRIF was not uprooted and transplanted at RBC. Instead, a new account was created at RBC, with or without beneficiaries, and the *assets* (cash/equities/bonds) were transferred from the Scotia account to the RBC account.
Now why does that matter? well, it matters because the *transfer* process has absolutely no references to beneficiaries. The standard form from the CRA is at http://www.cra-arc.gc.ca/E/pbg/tf/t2033/t2033-16e.pdf (most banks use it as a template) and contains no beneficiaries section whatsoever.
The result of this is that neither bank dealing with the transfer process has to care about beneficiaries, as long as the owner of the account is the same person and is acting in all freedom and consciousness, or someone with a power of attorney to do the same.
The result of all the above is that the failure is not in the transfer process, but in the account opening step. I am pretty sure the form that was filled for opening the RRIF at RBC contained a beneficiary section. If it was not filled, either because “… we didn’t know who it was to be”, because you overlooked it, or because you received bad advice by the bank rep, I would guess you are out of luck in all cases.
If someone reading this thread wants to correct me on this answer and can find you a workable answer to avoid the fees, I’d be most happy for you. But with the information I currently have, I am afraid you wont get off the hook.
Help! I have a GIC RRSP coming to term in Sept 2017.
I want to transfer the amount to something that I wouldn’t have to pay tax on when I transfer. I would like it to be something that if I needed a small amount I could withdraw and pay the tax. Something that wouldn’t be tied for years.
I am 68 and pretty illiterate about these things. It isn’t a large amount. Just 13,000.
Any help would be greatly appreciated!
Have you ever opened a TFSA? If not as of this year you could technically put in up to around $50,000 and have total control…transfers can be done easily online with your existing bank. Unfortunately you’d need to pay the initial withholding tax on any RRSP withdrawal though ie 20% $5-15K outside Quebec.
My ex-wife has her RRIF with Scotia McCleod. She has dual citizenship, Canadian and USA, and has been residing in the United States for several years. Her RRIF is managed by Scotia and she is very unhappy with them. She wishes to transfer her RRIF in kind to another broker and convert it to a self-directed RRIF. Can she do this transfer without traveling to Canada?
Maybe a little late on this thread but hopefully someone can set me right. I have RRSPs both personal and spousal in group Sunlife accounts. These are all holding mutual funds of some kind. I am assuming that these funds are proprietary (only available to Sunlife) but perhaps that is not the case. I am thinking of transferring out to another institution into self directed RRSP, so that I can avoid the management fees and diversify to some ETFs and dividend stocks.
Does anyone know if the Sunlife funds are transferable ‘in kind’ or would they need to be cashed out of the funds to be transferred? If that is the case, can I assume that the RRSP to self directed RRSP would have no tax consequences?
Hi Larry, great questions. The funds would be proprietary to Sun Life so they’d have to be sold first and then transferred as cash. Not a problem.
I recently did this with an RRSP I had at Tangerine. It was invested in one of Tangerine’s balanced funds (proprietary) so when TD made the request to transfer the RRSP they had to first sell the fund and then transfer the cash. It took a few weeks before the funds landed in my TD Direct Investing account, but all-in-all it was fairly smooth.
To answer your last question, there will be no tax consequences as the funds will remain within the ‘container’ of an RRSP the entire time – you’re just buying something else within that RRSP container (and you’d like to use a different brand of container).
to add on echo’s excellent comment:
1) find the self directed institution upfront and ask how to proceed for them to cover the transfer fee that Sun Life might tackle on the process. (it is typically in the 100-150 $, unless you have a waiver sometimes available for people leaving a group RRSP)
Most institutions (like TD-DI in Echo’s comment) will offer to cover the fee of the other institution (like Tangerine)
2) fill up the form (T2033) requesting that everything be sold before transfer. This yields for a simple transfer in cash.
3) if your transferred amount is large enough, you might also be able to negotiate some bonus from the self directed institution, either in free trades or even a cash bonus. That part may or may not be worth your energy, it really depends on the amount and the promotions offered currently. But if you get it, it may make the initial purchasing of ETFs and stocks devoid of commissions in your new self directed RRSP.
I have a family RESP with RBC and want to transfer everything to my BMO. Is this possible and how complicated will it be?
I’m about to transfer my RRSP from Tangerine to Modern Advisor. From what I’ve learned so far, you don’t have deal with the institution you are transferring FROM. The new institution will do it for you, and may even pay the fee that your current bank will charge you. I’m sure a BMO rep will be happy to help.
If your bank pays interest on the last day of every month, and you transfer the account to another bank, say, in the middle of a month : do you get $0 interest for that month ? I would think yes, you get no interest for that 1/2 month.