Tag Archives: CBA

It’s Official: Tangerine is Charging a Fee to Transfer your RRSP or TFSA to Another Bank

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Although I have yet to receive a notice from Tangerine either by email or by the message system they use within your bank account online, it appears to be official that Tangerine will be charging a $45 fee to transfer out your RRSP or TFSA balance.

UPDATE: I received a email notice inside my Tangerine account messages section on December 20 that advised that as of January 19 2015 I would have to pay a $45 fee to transfer out a RRSP or TFSA.

I updated my website with warnings when the rumour of this fee first appeared back in mid-October 2014. To date, I still have received no information directly from Tangerine about this new fee.

Tangerine Will Charge a $45 Fee to Transfer Out a RRSP

In the Frequently Asked Questions on the Tangerine site, it says they charge $45 to transfer out a RRSP.  It does not say when this new fee is applicable! I was told on the phone that it would be in January 2015 but that is not clear here.

Will Tangerine Charge a Fee to Transfer Out a TFSA?

At this point, Tangerine has not yet said anything about a TFSA transfer out fee on their website. Nor have I received any notice by mail, email or message.

For a TFSA, one way to avoid a fee is to wait till December. Instead of transferring your funds, withdraw them. Then on January 1 of the next year and NOT BEFORE you can contribute them into your TFSA at another institution. If you deposit them in the same year you withdraw them you will be fined 1% a month by the CRA. You MUST wait till January 1 of the next year.

Will Tangerine Now Refund a Fee Charged by Another Bank for Transferring a TFSA or RRSP into Tangerine?

In the past, I moved a cash RRSP into Tangerine (when it was called ING Direct.) I asked if they would pay me back the fee that the other bank charged me for moving out my RRSP. They replied that because they did not charge a fee for transferring a RRSP away from Tangerine, they also would not pay a refund for a fee charged for transferring a RRSP in to Tangerine.

So has that now changed? Will they pay up to $45 to cover the fee paid to transfer a RRSP from another bank into Tangerine?

I’ve sent that question to Tangerine and will update this article when they reply.

UPDATE: Ok the reply so far is not encouraging. I emailed to inquire and was told that because I have an account with Tangerine I have to phone them to discuss this. That suggests they don’t have a formal policy yet although if you are interested in transferring in, I would suggest you call and see if they will reimburse your fee.

The worrying part was they also said that owners of registered products had been notified of the “transfer out” change via the messaging system within their account. I have several registered products and have not received any type of notice!

I’ll provide additional updates if/when I can get them.

Can Tangerine Start Charging a Transfer Out Fee Without Any Formal Notice to Customers?

Usually banks warn you a few weeks or months ahead of time when they are changing their fees.

So far I have not received any notice from Tangerine about this new fee. I have not received a letter, an email, a message when I sign in to my accounts, a message on the message system inside my account, or even a few words written in my October banking statements about it.

Do they have to give notice of this fee?

That’s hard to find out! In the USA, they clearly do. The US Government Consumer Financial Protection Bureau website says “a bank or credit union can start charging you fees…[if they notify] you in writing at least 30 days before it starts charging fees….”

I wrote the Canadian Bankers Association, CBA, on November 18, 2014 to ask if there is any required notice for new fees. Unfortunately, they chose to respond that I should direct my question to the federal government’s Financial Consumer Agency.

The (federal) Department of Finance Canada appears to be working on a new Financial Consumer Protection framework, judging by a consultation paper from December 2013 posted online. It’s not clear to me whether this is one of the issues that may be included.

I will update this article if I get any further information about requirements from the Financial Consumer Agency.

UPDATE 1: They have replied that I should expect to wait 10 business days for a reply.

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How Long Will It Take To Transfer My RRSP or TFSA? Are There Rules?

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I was reading through some posts on the Canadian Money Forum one of which was about how to transfer a RRSP, in cash, from one financial institution to another. One of the replies said that financial institutions can work very slowly and may even phone you to try to talk you out of the move. That got me thinking about all of the RRSP and TFSA transfers I’ve done in the past 2 years and how long they took–and whether there are any rules banks have to follow.

What Is the Process for Transferring a RRSP or TFSA to Another Bank, Brokerage or Institution?

The actual process is very similar no matter which two financial institutions you are talking about. In almost all cases, you open the account that will receive the money or assets, then you fill in a T2033 form provided by that receiving institution which either they or you mail to the bank, brokerage, credit union, or other institution that currently has your holdings.

The T2033 is pretty straightforward. On it you list

  • the name and address of the place that will be receiving your assets
  • the name and address of the place that will be sending your assets
  • the account numbers, client numbers, transit numbers or other identifying numbers for the RRSP or TFSA at both institutions
  • your name, address, phone, and sometimes SIN
  • how to move non-cash assets.
    For example:
    transfer stocks and mutual funds as is, or sell them and then move the cash;
    convert any cashable GICs to cash and then move the funds, or move them as GICs, or move them as they mature to cash

There’s nothing very complex about a T2033 although some brokerages seem to make them look pretty ugly.

Are There Any Rules for Transferring Assets from one RRSP or TFSA to Another?

The disgruntled comment on the forum made me wonder if there were any actual rules about how quickly financial institutions have to handle these routine transfers.

Reading a line in In Your Best Interest piqued more of my interest. It said “The former firm must reply [to the requested transfer] within 2 days and deliver all the securities and cash, within ten days.”

So I went out and looked for more information.

While I couldn’t find the exact document I was looking for on the IIROC website, I did find another document on the Government of Canada Financial Consumer Agency of Canada website.

It answers the specific question of how long can an institution take to complete a RRSP transfer request.

It says:
The length of time depends in part on what is held in the RRSP. It could hold cash, stocks, mutual funds, etc. Each of these may require different handling times. So the longest time allowed is the time required to handle the most complicated asset in the request.

For “deposit-type” products, the target time is that within 7-12 business days after receiving a properly completed request , the chartered bank will send the cheque to the receiving institution.

If the “deposit” has to mature first, that extends the time permitted.

Note that the time is for chartered banks. It doesn’t say how long for other institutions.

For “mutual fund-type” products, it says to check Guideline 81-102 of the Investment Funds Institute of Canada.

For” securities-type” products, which presumably includes ETFs and stocks, it says Transfers by chartered banks of registered plans containing securities will be processed according to Regulation 2300 of the Investment Dealers Association.

Clear as mud, right?

I tried to go to the next level and look up Guideline 81-102 but it’s slow going so far. So in the meantime, here are some personal experiences for what they’re worth.

Time for Cash to Move from one RRSP or TFSA to Another at a Different Financial Institution

We had assets scattered all over the place from disorganized contributions made during the early years. Gradually we’ve been rounding them up and corralling them in a few brokerage accounts. It’s led to many transfers and I’ve timed a lot of them. Here are some examples.

These moves all happened in 2012-early 2014. As described in another article, the TFSA transfers from ING Direct to BMO InvestorLine this year show the randomness of some of these events. Both transfers were initiated at the same time in the same way, but there is a 7 business day difference between the results!

Each of these transfers was of cash only. Each was initiated by mailing the T2033 from a public mail box, so some of the required time includes the time for Canada Post to pick up and deliver the T2033 to the first financial institution.

And just in case you’re interested, no one has ever contacted us to try to talk us out of transferring our funds. (I suspect they’re glad to see me go!)

Where the Money Started Where the Money Stopped How Many Business Days It Took
The Canada RSP ING Direct 15
CIBC BMO InvestorLine 16
CIBC CIBC Investor’s Edge 3
ING Direct BMO InvestorLine 18
ING Direct BMO InvestorLine 11
ING Direct CIBC Investor’s Edge 12
ING Direct RBC Direct Investing 14 to leave ING
7 to then reach RBC DI!

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Have you had to transfer funds in a registered account from one place to another? How long did it take? Please share your experiences with a comment.