Investing

RBC Mutual Funds - When is Full Balance Available After Sale?

  • Last Updated:
  • Jul 21st, 2015 1:46 pm
[OP]
Newbie
Apr 22, 2012
10 posts
ETOBICOKE

RBC Mutual Funds - When is Full Balance Available After Sale?

Hi all,

I have automatic monthly RRSP contributions that buy into RBC index funds. Every 6 months or so I sell all my mutual fund holdings and buy up the ETF equivalents. When I go to do this, I have noticed that after I have entered all of the sell orders, I do not have the full balance available that I should have. I worked out the exact numbers on the latest occasion, and it seems like they hold back 10% of the book value of the funds. These funds then appear a few days later, presumably after the settlement date (which I understand to be T+2).

Can anyone confirm that what I am seeing is normal, and that the above description is accurate? I have asked both a RBC DI rep as well as the RBC in-branch rep this question and neither had any clue (they both thought the full balance should be immediately available). I don't even especially care, but I do want to understand the exact sequence so I can go place my final ETF order after the last of the cash appears.

Thanks for your help!
6 replies
Jr. Member
Dec 29, 2006
118 posts
3 upvotes
Calgary
Isn't this because you are doing it via an RRSP and there is a 10% withholding fee regardless and tax implications, prob best to do it via a TFSA
[OP]
Newbie
Apr 22, 2012
10 posts
ETOBICOKE
Just to clarify, I'm selling the mutual funds but the funds are staying inside my RRSP. I then use those funds to purchase ETFs within that same RRSP account. I'm not sure if that somehow triggers the 10% withholding tax (until they realize it's not being withdrawn?), but I wouldn't have guessed that that would be the case.
Deal Expert
Feb 29, 2008
29097 posts
4786 upvotes
Montreal
Normally, with RBC DI, the balance is almost available immediately. The sale only settles three days later

Are these RBC funds or other funds from institutions elsewhere?
[OP]
Newbie
Apr 22, 2012
10 posts
ETOBICOKE
They're all RBC funds (RBF556, RBF557, RBF559, RBF563).
Deal Fanatic
May 22, 2003
8740 posts
5593 upvotes
Vancouver
Is it possible that there are early redemption fees?
[OP]
Newbie
Apr 22, 2012
10 posts
ETOBICOKE
There are early redemption fees with these funds (2% for units sold within 7 days), but the last of the units I sold were purchased 21 days ago.

I'm still waiting for the remaining balance to appear on the latest set of trades I made, but historically it has all showed up after a few days.

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