Personal Finance

RRSP term nearing: withdrawing RRSP

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[OP]
Deal Addict
Oct 19, 2007
2105 posts
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RRSP term nearing: withdrawing RRSP

I have an RRSP with RBC that was opened in Feb 2015. 5 yr term, locked in. It was just a measly $500 and I honestly don't remember why I did open up that RRSP.

I remember RBC telling me there's a $50 fee or something for transferring it to another financial institution RRSP.

In that case, I am just going to get it withdrawn as cash. Other than the taxes, anyone know if RBC would charge a fee for withdrawing? I can't seem to find that info on their website.
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Jan 31, 2006
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Seks wrote: I have an RRSP with RBC that was opened in Feb 2015. 5 yr term, locked in. It was just a measly $500 and I honestly don't remember why I did open up that RRSP.

I remember RBC telling me there's a $50 fee or something for transferring it to another financial institution RRSP.

In that case, I am just going to get it withdrawn as cash. Other than the taxes, anyone know if RBC would charge a fee for withdrawing? I can't seem to find that info on their website.
RBC will just take the withholding tax and will send you an T4RSP next year.
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Dec 20, 2006
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Seks wrote: I have an RRSP with RBC that was opened in Feb 2015. 5 yr term, locked in. It was just a measly $500 and I honestly don't remember why I did open up that RRSP.

I remember RBC telling me there's a $50 fee or something for transferring it to another financial institution RRSP.

In that case, I am just going to get it withdrawn as cash. Other than the taxes, anyone know if RBC would charge a fee for withdrawing? I can't seem to find that info on their website.
cgtlky wrote: RBC will just take the withholding tax and will send you an T4RSP next year.
I know it is too trivial.
Just extend the term deposit (or deposit into rsp saving account) till end of the year with RBC and then withdraw(close) all on/before 31 December
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Deal Fanatic
Jul 1, 2007
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Most banks charge a $50 withdrawal fee.

Sounds like you probably just met with some salesperson at the bank in 2015 and they got you to do the pointlessly small RRSP contribution just to get a sale. This happens all the time at every major bank.
Money Smarts Blog wrote: I agree with the previous posters, especially Thalo. {And} Thalo's advice is spot on.
[OP]
Deal Addict
Oct 19, 2007
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Thalo wrote: Most banks charge a $50 withdrawal fee.
u mean transferring to a diff financial institution rrsp plan?

or u mean withdrawing into cash?
Deal Expert
Aug 2, 2004
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East Gwillimbury
Seks wrote: u mean transferring to a diff financial institution rrsp plan?

or u mean withdrawing into cash?
Transferring and withdrawing is the same thing to the bank. The money is leaving their institution.

There is a 20% withholding tax. So you lose 100$, plus the 50$ fee. Your 500$ just became 350$

Any reason why you want to do this?
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Mar 23, 2004
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Markham
Your best bet is to transfer the money to your bank and make your bank pay the transfer fee. Of course that only works if you have a lot of money with them/transfer a huge sum. Good luck.
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May 17, 2010
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Gee wrote: Transferring and withdrawing is the same thing to the bank. The money is leaving their institution.

There is a 20% withholding tax. So you lose 100$, plus the 50$ fee. Your 500$ just became 350$

Any reason why you want to do this?
No. Withdrawals are free, transfer out is not.
Tax withheld for anything under 5k is 10%, not 20%.

OP, is it possible your RSP was opened for the multi product rebate?
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Mar 10, 2018
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Gee wrote: Transferring and withdrawing is the same thing to the bank. The money is leaving their institution.

There is a 20% withholding tax. So you lose 100$, plus the 50$ fee. Your 500$ just became 350$

Any reason why you want to do this?
bunget wrote: No. Withdrawals are free, transfer out is not.
Tax withheld for anything under 5k is 10%, not 20%.

OP, is it possible your RSP was opened for the multi product rebate?
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Jul 1, 2007
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bunget wrote: No. Withdrawals are free, transfer out is not.
Tax withheld for anything under 5k is 10%, not 20%.

OP, is it possible your RSP was opened for the multi product rebate?
Not always the case. At TD, for example, withdrawals from a GIC/cash RRSP are charged $50 regardless (unless the rep waives the fee).

Mutual fund RRSPs with the banks generally do not charge a withdrawal fee, as they're making enough profit via MERs anyway.
Money Smarts Blog wrote: I agree with the previous posters, especially Thalo. {And} Thalo's advice is spot on.
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Apr 5, 2016
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bunget wrote: No. Withdrawals are free, transfer out is not.
Tax withheld for anything under 5k is 10%, not 20%.

OP, is it possible your RSP was opened for the multi product rebate?
Don't be so sure. Scotiabank also charges $50 withdraw fee. I think only CIBC and BMO does not charge this fee for the major institutions.
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Mar 11, 2016
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You will pay a fee to do a one time withdrawal..especially if you are closing the account..$50 in most cases..and don"t forget the HST! so $56.50 and 10% WHT tax which is calculated net of the fee and HST
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Mar 11, 2016
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bunget wrote: No. Withdrawals are free, transfer out is not.
Tax withheld for anything under 5k is 10%, not 20%.

OP, is it possible your RSP was opened for the multi product rebate?
wrong....RIF auto withdrawals are free...most institutions charge for any other one time registered plan withdrawals ....not so much for TFSA/non-registered
Member
May 17, 2010
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Thalo wrote: Not always the case. At TD, for example, withdrawals from a GIC/cash RRSP are charged $50 regardless (unless the rep waives the fee).
bomber17 wrote: Don't be so sure. Scotiabank also charges $50 withdraw fee. I think only CIBC and BMO does not charge this fee for the major institutions.
OP is at RBC, not TD or Scotia.
Fjr2005 wrote: You will pay a fee to do a one time withdrawal..especially if you are closing the account..$50 in most cases..and don"t forget the HST! so $56.50 and 10% WHT tax which is calculated net of the fee and HST
I have done my fare share of withdrawals from RSP, there was never a withdrawal fee.

Now to be fair this was in 2012-2014, but usually there is at least one free withdrawal per year.

Also there is a withdrawal fee at Dominion Securities of $25, and at Direct Investing of $50, but not at Royal Bank.
[OP]
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Oct 19, 2007
2105 posts
769 upvotes
imoo2u wrote: I know it is too trivial.
Just extend the term deposit (or deposit into rsp saving account) till end of the year with RBC and then withdraw(close) all on/before 31 December
What is the advantage of doing what you stated?


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