This is a part of the Investing Series.
By the way, this is information that would only really be helpful for Canadians!
I looked into moving my Registered Retirement Savings Plan (RRSP) or Tax-Free Savings Account (TFSA) from TD Canada Trust (whom I bank with) to Questrade.
As it can get kind of unwieldy, I thought I’d post on how this is done.
(P.S. if you sign up with Questrade using my referral, you get $50 in free trading credits and I get $70.)
WHY THE HECK WOULD YOU WANT TO MOVE ACCOUNTS?
Sounds like torture right? I know.
Basically it’s cheaper in terms of fees.
This lil’ piggy hates paying fees!
I am doing this because at Questrade, they don’t charge their commissions on ETFs (although ECN fees might still apply), and you can buy Vanguard ETFs which are cheaper than if you were to buy index funds at TD Canada Trust
- What is an ETF, and what’s the difference between an ETF and an Index Mutual Fund?
- Comparing TD E-Series from TD Canada Trust to Vanguard ETFs on Questrade
- What are ECN (Electronic communication networks) fees?
I am also doing this because it would be nice to have everything in one place, although I’m kind of screwed because of the way my RRSPs are set up.
I don’t want to pay anything to move my accounts, the fees just would not be worth the trouble.
QUESTRADE OFFERS A $150 REBATE / CREDIT IF YOU MOVE ACCOUNTS
It sounded too good to be true, so I called and peppered them for details on this “free” credit:
- Can only be used for ONE account (RRSP or TFSA)
- Has to be more than $25,000 in an account (RRSP or TFSA)
- Is a ONE-TIME promotional coupon, PER client, for ONE account, not for multiples
- You have to show that the RRSP money has been in your account for more than 90 days*
*You cannot credit the account, show them a statement to get the money, and then immediately debit the account. They want to see statements for 3 months that the money has been sitting there, to give you any kind of credit.
It’s restrictive without being restrictive.
THIS KIND OF SCREWS ME FOR MY LOCKED-IN RRSPS
This screws me because I have locked-in RRSPs hat are only totaling $12,000.
Locked-in RRSPs differ from regular RRSPs in the sense that I can’t pilfer the fund to withdraw the money early and pay a penalty, or do other weird things.
I don’t contribute to this fund, but it’s a carryover from the company I worked at.
It’s there until I’m 65.
Even worse, I can’t combine my regular RRSPs with my locked-in RRSPs to make the balance more than $25,000 to do it in one fell swoop (two accounts with one stone).
I CAN MOVE THE TFSAs AT THE END OF THE YEAR
At the end of the calendar year (December 31st 2013 as of this post), I will withdraw all of my TFSA money and transfer it to Questrade into my TFSA account there without penalties.
That should do it without incurring a fee.
THE ONLY ACCOUNT I CAN TAKE ADVANTAGE OF THIS $150 CREDIT IS MY REGULAR RRSPs
They’re maxed out and just under the limit at $25,000 (unbelievable but true, as I take my salary in dividends not earned income), and I’ll be able to move that account once I contribute a little more to it, about $1000 more at least.
Then I can shift out my money, and basically leave TD Canada Trust with barely anything in it, just my locked-in RRSPs which I can’t touch or do anything useful with.
So if you want to move your account from your bank to Questrade, those are the rules and that is how you do it.