Personal Finance

RRSP account funding by employer

  • Last Updated:
  • Oct 11th, 2020 2:39 pm
[OP]
Newbie
May 3, 2017
12 posts
1 upvote

RRSP account funding by employer

My ex-employer, as a part of settlement, has to transfer some funds to my RRSP account. My RRSP account is with Interactive Brokers (IB). IB it seems can only process RRSP cash transfer from an external bank if the account holder at the externak bank is the same as that at IB. My question is this: can I accept the funds in my checking account at my regular bank and then transfer it to my IB RRSP account?

Any suggestions thoughts?
8 replies
Deal Fanatic
User avatar
Feb 19, 2010
6237 posts
2968 upvotes
vikx01 wrote: My ex-employer, as a part of settlement, has to transfer some funds to my RRSP account. My RRSP account is with Interactive Brokers (IB). IB it seems can only process RRSP cash transfer from an external bank if the account holder at the externak bank is the same as that at IB. My question is this: can I accept the funds in my checking account at my regular bank and then transfer it to my IB RRSP account?

Any suggestions thoughts?
Presumably the arrangement is designed to avoid withholding tax which would happen if the money was paid to you. IOW, the answer to your question is no, the money cannot be received by you to remit to IB.

I don't deal with IB but this sounds like a ridiculous condition. Try contacting them and talking to somebody in a better position to assist.
[OP]
Newbie
May 3, 2017
12 posts
1 upvote
Thanks Conquistador.
When I chatted with someone at IB they mentioned that IB's back-office cannot process the employer sending funds directly to my account. I'll reach out again and see if I can talk to someone else with better understanding. I'll update the thread with whatever I find.

Thanks again!
Member
Dec 7, 2012
405 posts
762 upvotes
Could you try opening a Wealthsimple rrsp account then once that account is funded have your usual rrsp broker IB transfer the account. Not sure what fees would be involved. Perhaps someone on here knows a free self directed rrsp account you could open. I mentioned Wealthsimple only because it’s really easy to open up the account quickly with them. Get your account number and information and have your employer send the money to that account first then transfer the whole account? Just an idea I don’t know if it will work but maybe this idea generates another simple method.

I know I had a similar case years ago and sent all the money to a spousal rrsp which was with RBC at the time
[OP]
Newbie
May 3, 2017
12 posts
1 upvote
Thanks sfayerman.
That's a wonderful suggestion. This is from wealthsimple's website: "At Wealthsimple we don't believe in transfer fees. We don't charge anything on top of our management fee. We don't charge anything for withdrawals, transfer outs, or leaving your account open with a zero balance." The management fee is 0.5% per year for amounts less than $100,000.

This is the path I'm planning to take unless IB allows me to have the employer directly wire the funds in cash.
Member
Dec 7, 2012
405 posts
762 upvotes
vikx01 wrote: Thanks sfayerman.
That's a wonderful suggestion. This is from wealthsimple's website: "At Wealthsimple we don't believe in transfer fees. We don't charge anything on top of our management fee. We don't charge anything for withdrawals, transfer outs, or leaving your account open with a zero balance." The management fee is 0.5% per year for amounts less than $100,000.

This is the path I'm planning to take unless IB allows me to have the employer directly wire the funds in cash.
Wishing you success
[OP]
Newbie
May 3, 2017
12 posts
1 upvote
Update. After months of back and forth with my ex-employer, I was finally able to get them to fund my RRSP account at wealthsimple. Wealthesimple is very very slow. I am very disappointed. It took them almost a month and a half to process a check. But I finally have my funds in wealthsimple.
Deal Addict
May 15, 2013
1766 posts
477 upvotes
Montreal
vikx01 wrote: Update. After months of back and forth with my ex-employer, I was finally able to get them to fund my RRSP account at wealthsimple. Wealthesimple is very very slow. I am very disappointed. It took them almost a month and a half to process a check. But I finally have my funds in wealthsimple.
Thanks for the update.

Well, if you want the cheapest of the cheapest that don't charge you any fees at least don't expect a fast service.
[OP]
Newbie
May 3, 2017
12 posts
1 upvote
I was expecting a 10 days to 2 weeks. Six weeks for cashing a cheque is awfully slow. It's also 5 weeks of float for the company, not to mention the fat exchange rate margin in USD/CAD conversion.

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