Questions about Oaken's GICs in an RSP

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Jan 26th, 2018 12:42 pm

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Jan 26th, 2018 11:25 am

Striker60 [OP]: Sr. Member; Dec 29, 2014; 613 posts; 583 upvotes; Canada

Jan 26th, 2018 11:25 am

Questions about Oaken's GICs in an RSP

I'm considering investing in a 2 year RSP GIC with Oaken. I'd like to fund it from my Tangerine chequing account but I don't have any cheques. Would it be possible to fund it online or do they require a cheque?

After 2 years, would Oaken deposit the balance and interest into my Tangerine account or does it go into an Oaken savings account? If it goes back to Tangerine, does Oaken charge an RSP withdrawal fee?

9 replies

Jan 26th, 2018 11:31 am

Guest9939383742: Deal Addict; Jun 10, 2013; 3914 posts; 2520 upvotes; GrandTheftAutopolis

Jan 26th, 2018 11:31 am

Most of these banks have an electronic funds transfer feature.

If you hold your money at Oaken in a tax shelter, why would they withdraw to pay another institution? It'll just go into your own savings account.

You saving for a house/school? Tax-sheltered money is best invested in stocks/index funds/bonds/reits etc...RSP means you won't be withdrawing for emergencies so it can take more risk than say a TFSA (if that was your sole source of capital). Just a question to think about, this might just be your risk appetite.

Jan 26th, 2018 11:32 am

Striker60 [OP]: Sr. Member; Dec 29, 2014; 613 posts; 583 upvotes; Canada

Jan 26th, 2018 11:32 am

I don't currently have any accounts with Oaken. Would I need to setup a savings account with them at the same time I get the RSP GIC?

I'm saving for retirement.

Jan 26th, 2018 11:36 am

Striker60 [OP]: Sr. Member; Dec 29, 2014; 613 posts; 583 upvotes; Canada

Jan 26th, 2018 11:36 am

I just started the enrollment process on Oaken's website and they do require a cheque unless you're transferring from another bank. I'll check how much tangerine charges for cheques.

Jan 26th, 2018 11:40 am

akaManny: Deal Addict; Mar 8, 2013; 2891 posts; 1553 upvotes

Jan 26th, 2018 11:40 am

You can get a VOID cheque from Tangerine. Click on the chequing account button/box and you will see another button for that.

Jan 26th, 2018 11:55 am

Guest9939383742: Deal Addict; Jun 10, 2013; 3914 posts; 2520 upvotes; GrandTheftAutopolis

Jan 26th, 2018 11:55 am

Yeah, so assuming you have 20 years until retirement, you'll be better off in stocks/index funds where you can get an average annualized compound rate of 10% vs. the 3.5% I see at Oaken for 5 years. But that's cool if that's your risk tolerance that you've determined, just wanted to let you know you have other options (stocks are acquired at discount brokers like TD Direct Investing, Scotia iTrade, BMO Investor Line, CIBC Investor's Edge, Royal Bank Direct Investing, Questrade, QTrade), the only index funds I know in Canada are TD eFunds (but all the brokers can buy index ETFs). 3.5% should really be for a savings account to maybe offset inflation or for an emergency reserve, or money saved for a short-term purpose.

Jan 26th, 2018 11:59 am

Striker60 [OP]: Sr. Member; Dec 29, 2014; 613 posts; 583 upvotes; Canada

Jan 26th, 2018 11:59 am

@akaManny, I have a void cheque but I'm assuming Oaken needs an additional amount to setup the account.

@Hobotrader I thought about that but I use my TFSA account for stocks. I'd like to have something safer for my RRSP.

Jan 26th, 2018 12:11 pm

Guest9939383742: Deal Addict; Jun 10, 2013; 3914 posts; 2520 upvotes; GrandTheftAutopolis

Jan 26th, 2018 12:11 pm

Striker60 wrote: ↑ @akaManny, I have a void cheque but I'm assuming Oaken needs an additional amount to setup the account.

@Hobotrader I thought about that but I use my TFSA account for stocks. I'd like to have something safer for my RRSP.

It should be the other way around. Because you'd never ever pinch your RRSP in an emergency because it's a paperwork and tax nightmare. With TFSA you can withdraw whenever you please and re-insert the next year (if you maxed out). Especially a locked in RRSP - you can use more aggressive smart beta strategies in there cuz that money isn't being touched for a LONG time). I wouldn't waste shelter space to shelter 3.5% gains =/...I'd do that in my taxable account (non-sheltered), I'd much rather pay tax on 3.5% than 10%.

Jan 26th, 2018 12:12 pm

Guest9939383742: Deal Addict; Jun 10, 2013; 3914 posts; 2520 upvotes; GrandTheftAutopolis

Jan 26th, 2018 12:12 pm

But it depends on your risk tolerance and your capital setup...Good luck!
Most of these new banks are innovative so all will have EFT, I couldn't manage to use those in the Big 5...EFT you'd need the data from the void cheque anyway, transit number, bank number, account number etc...

Jan 26th, 2018 12:42 pm

Striker60 [OP]: Sr. Member; Dec 29, 2014; 613 posts; 583 upvotes; Canada

Jan 26th, 2018 12:42 pm

Good points but I'm also using my TFSA for retirement. I'll withdraw only if I really have to.

Thanks, I might just double check with Oaken to make sure I can transfer the funds online.

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