TD eseries account fees? Transferring from existing RRSP?

[pricerror]

I currently have an RRSP account with Sun Life that was setup by my previous employer, and it's time to move it into my own RRSP account. The MER's on the Sun Life mutual funds are an awful 2%+

I do not have any accounts with TD right now, so I'm wondering what the process is to create an eseries account and transfer my RRSP into it.

From what I've read I can open a registered TD Mutual Fund Account (do I need a chequing account with TD to do this?) and then transfer my RRSP from Sun Life into this account.

Then, I can convert the TD Mutual Fund Account into an e-series account and use the money I have to purchase efunds.

Other than the MER on the efunds, are there any monthly or annual fee's I would be paying to maintain these accounts?

[S5]

Other than the MER on the efunds, are there any monthly or annual fee's I would be paying to maintain these accounts?

No, no such fees for TD MFs. Sunlife will probably charge you a transfer fee, check with TD to see if they will pick it up but it's doubtful.

If the amount is high enough to avoid their account maintenance fees then you'd be better off with TD Waterhouse who would likely pick up the transfer fee.

Those are your only 2 options for owning e-series funds.

[cjottawa]

I currently have an RRSP account with Sun Life that was setup by my previous employer, and it's time to move it into my own RRSP account. The MER's on the Sun Life mutual funds are an awful 2%+

I do not have any accounts with TD right now, so I'm wondering what the process is to create an eseries account and transfer my RRSP into it.

From what I've read I can open a registered TD Mutual Fund Account (do I need a chequing account with TD to do this?) and then transfer my RRSP from Sun Life into this account.

Then, I can convert the TD Mutual Fund Account into an e-series account and use the money I have to purchase efunds.

Other than the MER on the efunds, are there any monthly or annual fee's I would be paying to maintain these accounts?

I'm a fee avoidance nut and I use TD accounts myself so take what I'm writing with that in mind.

Don't bother with a TD Canada Trust investment account; skip right to TD Waterhouse.
You don't need a TD chequing account. Get a TD Canada Trust "Savings Plus" account as a "gateway" to move money in and out of the TD Waterhouse account.

TD Waterhouse Commission Schedule and Statement of Disclosure of Rates and Fees: http://www.tdwaterhouse.ca/apply/forms/521778.pdf

A basic RSP has an annual fee of $25. The basic RSP is all you need to house the e-Series funds. (I asked)
If your account exceeds $25,000 market value, the $25/year fee is waived, making it free.

A TD Waterhouse TFSA is free.
A non-registered account is free, if you hold a registered account.

I use a PC Financial chequing account for my day to day.

Getting a bit off topic but for an emergency fund, open two accounts with Canadian Direct Financial:

KeyRate Savings (2% interest)
KeyReach TFSA cash (3% interest)

No other bank is going to pay that kind of interest on cash deposits. (People's Trust is a trust company, not a bank; similar rates but no online banking options)

The KeyRate account comes with an ATM card that is free to use at any Exchange Network ATM. (HSBC, National Bank, Alterna etc) One free withdrawal per month, unlimited deposits and internal transfers, much like the TD Savings & Waterhouse linked accounts.

Basically, do all that and you have access to your money, access to e-Series funds and access to the highest cash interest rates in Canada, without paying a single dime to a bank. ($25/year under $25k on the RSP being the only exception)

[S5]

I'm a fee avoidance nut and I use TD accounts myself so take what I'm writing with that in mind.

Don't bother with a TD Canada Trust investment account; skip right to TD Waterhouse.
You don't need a TD chequing account. Get a TD Canada Trust "Savings Plus" account as a "gateway" to move money in and out of the TD Waterhouse account.

TD Waterhouse Commission Schedule and Statement of Disclosure of Rates and Fees: http://www.tdwaterhouse.ca/apply/forms/521778.pdf

A basic RSP has an annual fee of $25. The basic RSP is all you need to house the e-Series funds. (I asked)

If he has an RRSP under 25k, why pay $25/year for a lousier experience(not as easy to manage online, not as many PPP options, etc) ?




Getting a bit off topic but for an emergency fund, open two accounts with Canadian Direct Financial:

KeyRate Savings (2% interest)
KeyReach TFSA cash (3% interest)

No other bank is going to pay that kind of interest on cash deposits.

Peoples Trust offers 2.1% and 3% respectively. These threads might be of interest.
http://forums.redflagdeals.com/official-rfd-thread-savings-accounts-698055/
http://forums.redflagdeals.com/official-rfd-tfsa-thread-savings-accounts-681290/

[cjottawa]

If he has an RRSP under 25k, why pay $25/year for a lousier experience(not as easy to manage online, not as many PPP options, etc) ?

Lousier than what?

I find accounts easy to manage through the TD Webbroker and Easyweb interfaces.

To directly answer the question of why: access to the lowest cost index funds in Canada.

Details on that here: http://canadiancouchpotato.com/2010/06/25/should-you-use-index-funds-or-etfs/

TL;DR: Index ETFs may have lower MERs but trading costs make them cost-ineffective until account size grows to overcome the trading commissions.



Peoples Trust offers 2.1% and 3% respectively. These threads might be of interest.
http://forums.redflagdeals.com/official-rfd-thread-savings-accounts-698055/
http://forums.redflagdeals.com/official-rfd-tfsa-thread-savings-accounts-681290/

People's Trust doesn't offer online banking, AFAIK, making access to funds more difficult. Futher, they don't appear to be part of the Exchange Network like CDF; this limits how you can get money into and out of your accounts there. I stand by my recommendation - for an emergency fund, CDF offers better access.

[pricerror]

I only have about $6000 in my RRSP right now so I won't qualify for the fee waiver at Waterhouse.

I also remember reading that e-series accounts start becoming less attractive once you get over $20,000 at which point it makes sense to move to ETF's.

[cjottawa]

I only have about $6000 in my RRSP right now so I won't qualify for the fee waiver at Waterhouse.

I also remember reading that e-series accounts start becoming less attractive once you get over $20,000 at which point it makes sense to move to ETF's.

Yes, per the link I posted previously, the break-even on ETFs depends on the amount you pay for trading commissions. With a $29 commission, the break-even is more like $75,000.
With a discount broker offering $10 commissions, the break-even is lower.

An option to consider, if your TFSA contribution room is large enough: use a fee-free TFSA to house the e-Series funds until your portfolio grows large enough to exempt you from the RRSP fees.

[S5]

Lousier than what?

I find accounts easy to manage through the TD Webbroker and Easyweb interfaces.

To directly answer the question of why: access to the lowest cost index funds in Canada.

Details on that here: http://canadiancouchpotato.com/2010/06/25/should-you-use-index-funds-or-etfs/

Lousier than the TD MF alternative, wasn't that clear as day in my post? I even gave specific examples of things that are easier to accomplish with a TD MF account than with TDW. Good luck setting up a PPP online at TDW, or changing it.

And what's with the ridiculous answer about lowest cost funds in Canada? Where did I suggest anything other than e-series in this thread? You need to do a lot more reading on this board before lecturing. Weird how different your posts are here than on FWF, pretty revealing actually.

[wm009]

I only have about $6000 in my RRSP right now so I won't qualify for the fee waiver at Waterhouse.

I also remember reading that e-series accounts start becoming less attractive once you get over $20,000 at which point it makes sense to move to ETF's.
Stick with the e-series mutual fund account for now. You can always move it to waterhouse later (and it should be free). As for the amount you should have before you make the jump to ETF's, it really depends on how much you're buying and how often. I'd aim for more like minimum $50,000 before I go into ETFs. And with TD Waterhouse you need $50,000 in assets with the bank to get the $10 a trade rate.

[Stryker]

Our own RRSP's are with TD Waterhouse so I can't help with specifics, but TD Canada Trust shows on the application form at their website (http://www.tdcanadatrust.com/products-services/investing/mutual-funds/investment-options/new-acct.jsp) as to the steps to take on opening an account.

[sansera]

If I already have a TD MF account (and a chequing acct) there are no fees to switch that to e-series fund right (I'm doing so because of the lower MERs)? Also I'm hoping it doesn't count as an early switching fee if I have a PPP every month, it's only 30 days of the initial purchase right? Thanks!

[notbill]

If I already have a TD MF account (and a chequing acct) there are no fees to switch that to e-series fund right (I'm doing so because of the lower MERs)? Also I'm hoping it doesn't count as an early switching fee if I have a PPP every month, it's only 30 days of the initial purchase right? Thanks!

There's no cost to switch a regular mutual fund account to an e-series account. If the funds you currently hold have an early redemption fee applied if you sell within 30 days, then that fee would apply to any units of the fund you have held for less than 30 days. If you're concerned about that, then cancel the monthly purchase plan and wait the 30 days before selling those units. You can convert your account to an e-series account and then buy/sell/switch your mutual funds when you're ready.

[notbill]

I only have about $6000 in my RRSP right now so I won't qualify for the fee waiver at Waterhouse.

I also remember reading that e-series accounts start becoming less attractive once you get over $20,000 at which point it makes sense to move to ETF's.

It also depends on how you want to invest your contributions. If you want to contribute and invest smaller amounts monthly or more than a few times a year, then the e-series funds make more sense.

[JayWang]

I was just about to make a new thread but this one is very relevant to my current situation as well.

Thanks for the great info in here everyone and I will be posting up later in the week once I confirm some of my numbers!

[tim008]

Yes, per the link I posted previously, the break-even on ETFs depends on the amount you pay for trading commissions. With a $29 commission, the break-even is more like $75,000.
With a discount broker offering $10 commissions, the break-even is lower.

An option to consider, if your TFSA contribution room is large enough: use a fee-free TFSA to house the e-Series funds until your portfolio grows large enough to exempt you from the RRSP fees.

What about the commission free ETFs? How do they stack up against the e-series when looking to just buy some indices?

[notbill]

What about the commission free ETFs? How do they stack up against the e-series when looking to just buy some indices?

I haven't looked into them extensively myself, but I believe the problem with the commission free ETF offerings is that they've been somewhat limited and don't cover the same broad indices that the e-series funds do. There's a recent MoneySense article that gives an overview of these and which brokers offer them:
http://www.moneysense.ca/2012/06/28/an-overview-of-commission-free-etfs/

[tim008]

I haven't looked into them extensively myself, but I believe the problem with the commission free ETF offerings is that they've been somewhat limited and don't cover the same broad indices that the e-series funds do. There's a recent MoneySense article that gives an overview of these and which brokers offer them:
http://www.moneysense.ca/2012/06/28/an-overview-of-commission-free-etfs/

If you look at iTrade's Horizons S&P/TSX 60 and iShares S&P/TSX Completion, it seems pretty broad for capturing Canada's indices. And the Vanguard MSCI EAFE ETF looks like a good low cost option if you want Europe, Asia and the Middle East. I'm pretty new to this, so is there anything I've left out?

Obviously it doesn't include everything, but considering the free trades, doesn't this make ETFs viable for small accounts (or is there some other hidden fee)?

[S5]

If you look at iTrade's Horizons S&P/TSX 60 and iShares S&P/TSX Completion, it seems pretty broad for capturing Canada's indices.

Agree but it requires that you be comfortable owning a swap based synthetic ETF and that you aren't in a low tax bracket where trading low/no tax dividends for capital gains wouldn't be advisable in non registered accounts.


And the Vanguard MSCI EAFE ETF looks like a good low cost option if you want Europe, Asia and the Middle East. I'm pretty new to this, so is there anything I've left out?

You mean Far East. The problem is it includes currency hedging and is a US clone fund which creates additional tax drag.


Obviously it doesn't include everything, but considering the free trades, doesn't this make ETFs viable for small accounts (or is there some other hidden fee)?

No cheap unhedged US option. Other fees vs e-series would include the bid/ask spread on ETFs.

[tim008]

Agree but it requires that you be comfortable owning a swap based synthetic ETF and that you aren't in a low tax bracket where trading low/no tax dividends for capital gains wouldn't be advisable in non registered accounts.

You mean Far East. The problem is it includes currency hedging and is a US clone fund which creates additional tax drag.

No cheap unhedged US option. Other fees vs e-series would include the bid/ask spread on ETFs.


Thanks for clearing things up S5