I’ve been on a quest to pull our RRSP assets into some sort of organized structure. Like many people, we often bought RRSP investments (usually GICs) at the last moment and from whoever was offering a good rate that day or whichever institution was close by. Then we met, married and had kids. Unlike normal people who manage to stay organized even while raising a family, our RRSPs ended up a disorganized mess. Bit by bit, we’re fixing that. I had one (1!) GIC at CIBC for over 15 years. It was past time to get it consolidated, so I decided to transfer my CIBC RRSP to my BMO InvestorLine account.
Why Banks Really Charge a Fee to Transfer RRSP Assets
I suspect the real reason many banks charge $50-150 to transfer RRSP assets is because it’s a strong psychological deterrent to investors. I had a very small GIC with CIBC. The transfer out fee was (and apparently as of April 3, 2013 still is) $100. It’s emotionally painful to PAY $100 of your measly annual interest to the bank just to get your money out.
Still, after running some numbers, I realized I was being an idiot leaving the money there. In general, even after phoning and threatening and complaining, the best rate I could get on a GIC from CIBC was still 0.5% – 1% lower than what I could get for a GIC using BMO InvestorLine. That isn’t killer but it’s very annoying. I decided to bring it over to InvestorLine, buy a dividend blue chip stock that pays 4-5% a year and mentally earn back the transfer fee that way. (Of course with my luck, the bank stock will then plummet 25%, but at least I feel comfortable holding a bank stock at 4-5% for several years while waiting for a hoped-for rebound.)
Can I Transfer a RRSP GIC from CIBC to BMO InvestorLine
Nope. Unfortunately, BMO InvestorLine does not offer or support this type of CIBC GIC. So the first thing I had to do was wait for the GIC to mature at CIBC. That sounds straightforward, until you realize the term to maturity had another 2.5 years to go. No one said fixing up our RRSPs was going to be fast!
Two weeks before the GIC was set to mature, I visited a CIBC branch. (Not the branch I bought it from: that was 3 moves and 2 houses ago!) I filled out all the required paperwork to create a RRSP Daily Interest Savings account. Then I filled out all the paperwork to have my existing RRSP GIC mature and cash out with the principal and interest to be paid to the new DISA.
Then I started waiting. I had to have the new RRSP DISA account number and know the money was in it, before I could submit the request to move it.
How do I Move the Money from CIBC to InvestorLine
As I’m sure you know, you don’t want to withdraw your RRSP cash to move it. You’ll have to pay tax on it if you do, and you can’t contribute it again unless you have lots of unused RRSP room. You want to transfer it directly from the bank to the brokerage.
To do this, I filled out a BMO InvestorLine T2203 transfer form. It authorized CIBC to release the funds to InvestorLine.
How Long Does It Take to Transfer the RRSP Money from Bank to Brokerage?
I hope you don’t plan to re-invest any money you transfer this way any time soon.
The GIC matured February 28, 2013.
The first week in March, I received a statement from CIBC with the DISA account number and cash balance.
I filled out the T2203 form on 2013 03 15. I mailed it March 16 to InvestorLine.
On April 3, 2013 CIBC sent me a letter confirming the money had been transferred out. (And confirming that it cost me $100 for the honour.)
On April 10, 2013 the cash showed up in my InvestorLine account, back dated to say it had arrived on April 9, 2013. (Don’t ask me where it was for the interim 5 days!)
So all in all, it took me 25 days after I mailed the T2203 before I had the cash ready to re-invest in my InvestorLine account.
Maybe they had to roll the amount in pennies one by one with their nose from one location to the other?
- Try not to invest your RRSP money all over the place like I did.
- When you realize you’re losing money by leaving your assets scattered hither and yon, get cracking and start consolidating them.
- Don’t ever expect anything involving two major Canadian financial institutions to happen quickly. (Except perhaps increases in mortgage rates, and decreases in GIC rates.)
Still, at least I got the GIC cashed, and the cash moved from CIBC to InvestorLine. That’s another item checked off my list. If I die tomorrow, I’m sure my husband will appreciate my improved organization.
- How to Transfer Assets to a BMO InvestorLine Account from Another Bank Using a T2033 Form
- Can I Transfer my RRSP and TFSA GICs from CIBC to a Self Directed Investor’s Edge Account?
Are all your RRSP savings in one or two planned locations? Or do you have a haphazard collection of investments with only the vaguest idea where they all are? Please share your experiences with a comment.