Personal Finance

TFSA Transfers for Investment vs Savings

  • Last Updated:
  • May 6th, 2020 9:53 pm
[OP]
Newbie
Apr 11, 2018
1 posts

TFSA Transfers for Investment vs Savings

I noticed that banks offer two different fees for transferring a registered account out to another bank. For example, let's look at Tangerine:

https://www.tangerine.ca/file_source/fb ... hedule.pdf
https://www.tangerine.ca/file_source/fb ... ule-En.pdf

They are charging $50 to transfer out a Registered Savings Account vs $125 to transfer a Registered Investment Fund Account. In the case of Tangerine, it's just their mutual funds.

My question is why would you pay $125 when you can just sell the mutual fund which you were going to do anyways as Tangerine funds are exclusive to Tangerine, transfer to a TFSA Registered Savings within Tangerine, then initiate the transfer to another bank for $50, and then just buy the mutual fund or stocks you want on your own at your new bank?

Am I missing something? I know that RBC also has separate fees as well ($50 and $135), but since RBC has a brokerage, it would be different because you can do in asset transfers to other brokerages. I think Tangerine is the best example to use for my question, since they only offer mutual funds, and these are exclusive to Tangerine only.

When would someone choose the $125 over the $50? Please let me know if I'm understanding this incorrectly.
3 replies
Newbie
Jul 7, 2019
49 posts
39 upvotes
indecisiveconsultant wrote: I noticed that banks offer two different fees for transferring a registered account out to another bank. For example, let's look at Tangerine:

https://www.tangerine.ca/file_source/fb ... hedule.pdf
https://www.tangerine.ca/file_source/fb ... ule-En.pdf

They are charging $50 to transfer out a Registered Savings Account vs $125 to transfer a Registered Investment Fund Account. In the case of Tangerine, it's just their mutual funds.

My question is why would you pay $125 when you can just sell the mutual fund which you were going to do anyways as Tangerine funds are exclusive to Tangerine, transfer to a TFSA Registered Savings within Tangerine, then initiate the transfer to another bank for $50, and then just buy the mutual fund or stocks you want on your own at your new bank?

Am I missing something? I know that RBC also has separate fees as well ($50 and $135), but since RBC has a brokerage, it would be different because you can do in asset transfers to other brokerages. I think Tangerine is the best example to use for my question, since they only offer mutual funds, and these are exclusive to Tangerine only.

When would someone choose the $125 over the $50? Please let me know if I'm understanding this incorrectly.
The way I see it is that it’s just a deterrent from switching via a transfer. And the transfer is much more than a simple wire as there’s forms that have to be completed for CRA.. the bank you are switching to normally covers the fee’s to transfer it anyway so really the fee isn’t anything to worry about. I’m not in banking though just my opinion based on switching registered accounts between banks before
Deal Addict
User avatar
Nov 18, 2007
3501 posts
586 upvotes
Valleywood
Or just sell everything and withdrawal everything but $10. (This approach is best done in mid-December.)

Write yourself a cheque, deposit it at the new institution and on January 2nd contribute to your new TFSA.
Deal Addict
Sep 14, 2012
1277 posts
881 upvotes
Montreal, QC
TorontoTheo wrote: The way I see it is that it’s just a deterrent from switching via a transfer. And the transfer is much more than a simple wire as there’s forms that have to be completed for CRA.. the bank you are switching to normally covers the fee’s to transfer it anyway so really the fee isn’t anything to worry about. I’m not in banking though just my opinion based on switching registered accounts between banks before
Yes. The only thing i want to add is that the bank the customer is switching to MIGHT cover the fees to transfer but it will depend on the amount of the transfer fee versus how much the customer is transferring. For example, if transferring $1000 RSP or less from one institution to another and if the transfer fee is around $100, the receiving bank will probably be reluctant to cover the transfer fee. When I transferred my RSP (fee was $100) from my company's group RSP plan to my personal RSP at my financial institution, my financial institution asked me for the amount that I am transferring as well as how much the transfer fee was before agreeing to pay the transfer fee.

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