Do I Have to Pay a Fee to Take Money Out of My Online Non Registered Self Directed Brokerage Account?

Posted on 2014 07 23 by BetCrooks

We’ve never had a non-registered brokerage account. Between the mortgage, RRSPs, RESPs and TFSAs we haven’t had that much extra cash punting around. We did occasionally buy GICs and we have a few shares we bought directly from the companies themselves, but we’ve had no need for a broker or a “non-registered” trading account. Now I’m considering opening one but I’m suspicious about any fees the brokerage may charge: I especially don’t want to have to pay a fee to take any money out of the non-registered account.

I want to check this detail because all brokerages charge a fee (in addition to withholding taxes) for withdrawing money from a RRSP. Most do not charge a fee for a withdrawal from a TFSA brokerage account but some seem to be considering doing so. I don’t like fees but I absolutely hate unexpected fees, so I’ll check the details first before I open an account.

I’ll check the situation at

BMO InvestorLine
CIBC Investor’s Edge
RBC Direct Investing
Scotia iTrade
TD Direct Investing

(And now I’ve done checking, I’m glad I did. There’s quite a variation between brokerages!)

Does BMO InvestorLine Charge a Fee for a Non-Registered Account Withdrawal?

If you aren’t a BMO bank customer, InvestorLine actually sets you up with a BMO bank chequing account and a bank card when you open your brokerage account. This bank account permits you to make 2 free withdrawals or transfers a month.

I needed to check whether it cost anything to transfer cash from a non-registered InvestorLine account into this free bank account though. Rats: no online live chat….I hate brachiating along telephone trees.

No fee! I suspected as much but it never hurts to double check—especially since BMO is the bank that now charges a $10 annual fee for buying mutual funds at their bank branches.

It turns out that this is the only brokerage that offers this service. I think it earns InvestorLine a Bonus Point. Having a (free) connected bank account makes moving money around much easier.

As with CIBC IE, if you have a minimum balance of $10 000 in the account or if you also have a RRSP account with them, there is no annual fee or inactivity fee.

Does CIBC Investor’s Edge Charge a Fee for a Non-Registered Account Withdrawal?

I used Investor’s Edge online live chat to ask.

The agent advised me that so long as I am transferring cash from my non-registered account to my CIBC bank account there is no fee.

She warned me that there is the usual commission fee if I have to sell some stocks or other investments to create the cash to withdraw.

If you didn’t already have a CIBC account and if you didn’t have free withdrawals from that account you would end up having to pay to actually get your hands on your money. We have a no-fee CIBC account though, so for us that would not be a problem.

In fact, to electronically transfer money from an Investor’s Edge account to another financial institution you have to pay a fee of $25! (Source: https://www.investorsedge.cibc.com/ie/benefits/fees-and-commission/fees.html)

I guess this means if you don’t bank with CIBC and if you plan to make regular withdrawals from your non-registered account, you might end up paying quite a large amount in fees. If I was in one of those situations, I would phone Investor’s Edge and discuss any options to get at the money for a lower cost *before* I opened an account.

If you keep a minimum balance of $10 000 or more in an Investor’s Edge brokerage account, there is no annual or inactivity fee. You can also get the annual fee waived if your balance is below $10 000 if you also have a RRSP account at Investor’s Edge.

Does RBC Direct Investing Charge a Fee for a Non-Registered Account Withdrawal?

RBC Direct Investing does not charge a fee for a withdrawal *IF* you have a RBC bank account.

But if you don’t, you have to pay a $10 fee to get a cheque issued to make a withdrawal!

Ouch!

I asked it there was some way to make an electronic transfer to another bank, but was told generally no, not for a one-time withdrawal.

It is possible to set up a regular automatic withdrawal and transfer, called an Automatic Funds Transfer, AFT. So if I wanted to transfer out, say, the money generated each month by a regular dividend payment, I could do that. That transfer can send the money to any Canadian financial institution.

I’m not sure if you can “game” the system by initiating a regular automatic withdrawal and transfer and then cancelling it after one withdrawal or not. If you accidentally opened an account not knowing about the $10 cheque fee, you might want to experiment and find out: if you do, please let us know how it goes with a comment.

Anyway, this does *not* sound like a good place to set up my account given that I don’t bank with RBC.

RBC Direct Investing requires you to have $15 000 in your non-registered account or in a combination of brokerage accounts to avoid paying any annual or inactivity fees. There are some other ways around the annual fee too, if you check their website.

Does Scotia iTrade Charge a Fee for a Non-Registered Account Withdrawal?

Well their ‘fee’ list is full of ambiguities. It says “cheque withdrawal fee: NO FEE” but it also says partial account transfer out “$150.” I believe that means when you try to transfer part of your account to another brokerage, but I’m not sure. I’d better check.

Yay! Another site with Live Chat.

This is interesting!

“There is no fee to move funds out of your account.”

Once you open a non-registered account at iTrade you can submit a completed “Easy Transfer” form along with a cheque from the bank account you wish to link with your iTrade account. They will then electronically link the bank account to the trading account. The bank account can be at any banking institution.

That’s better than any of the other brokerages so far.

Scotia iTrade also requires a minimum balance of $10 000 in the account to avoid an account inactivity fee. There are some other ways to get the fee reduced: see the website for details.

Does TD Direct Investing Charge a Fee for a Non-Registered Account Withdrawal?

It looks like TD charges $6.50 if you want them to issue a cheque from your non-registered account for you to pick up at a TD branch. (Source: http://www.tdwaterhouse.ca/document/PDF/forms/521778.pdf)

It looks like you can also transfer money out using an Electronic Fund Transfer service. I need to check whether that’s just to TD accounts, or to any account, and whether there is a fee.

OK, I had to go with verbal information from an Agent. He said there is no fee to make an electronic transfer out to another bank. However, he did warn me that it’s a bit “complex” to set up the transfer link. It sounded like there may be some aggravation getting it first set up but after that it should be fine.

He also said, though, that it’s free to get a cheque and it’s not, so I’m not sure how accurate his information is. If I (or you) was going to open an account, I’d try for written confirmation of this before proceeding.

He did mention that if you transfer part of your account to another brokerage there is a major fee. That’s the same for all brokerages though and not a surprise.

Scanning to the TD fees brochure, there’s another fee I would check into before opening a non-registered account. It says
“Summary of Annual Trading Activity Fee $50” This fee is waived for President’s Account members, accounts which generated at least $150 in trading commissions and accounts which earned $50 in interest. So it sounds like a Couch Potato investor might get stuck with this fee. Be wary and check before opening an account.

I don’t think I’m interested in an account at TD Direct Investing, so I won’t pursue these fee issues any further.

IF you have $15 000 or more if you combine the amounts in all of your TD Direct Investing accounts you do not have to pay their quarterly “custody” fee. The minimum is removed if you also have a RRSP account at TD Direct Investing. There are various other ways to reduce this fee: see their website for details.

Which Brokerages Are the Best (Well, Cheapest) for Withdrawing Cash from a Non-Registered Account?

So to recap

All will let you transfer money out to your bank account with the same bank for free.

BMO InvestorLine gives you a free BMO bank account and 2 free withdrawals or transfers a month.
Scotia iTrade lets you transfer cash out electronically for free.
TD Direct Investing should be free for electronic transfers out but charges $6.50 for you to pickup a cheque.
RBC Direct Investing charges $10 for a cheque and does not support electronic transfers out.
CIBC Investor’s Edge appears to charge $25 to electronically transfer money out.

Which Brokerage Will I Choose?

Based on this part I’m leaning towards InvestorLine or Investor’s Edge. Frankly I was surprised there was so much difference between the 5 brokerages. I guess they all intend to get you to open a bank account with them. Only BMO seems to realize you might not be interested in doing that.

Related Reading

What Is a Non-Registered Brokerage Account?

Join In
Have you ever been zinged with an unexpected fee just for taking your own money out of your own investment account? Did you have to open a new bank account just to manage your brokerage account? Please share any insights with a comment.

How to Transfer RRSP Cash to a RBC Direct Investing RRSP

Posted on 2014 06 16 by BetCrooks

UPDATE: This article is historical, from 2014. I no longer invest with RBC Direct Investing.

Well, the promotional interest rate on my 2014 RRSP contribution at Tangerine, formerly ING Direct, has now expired. It’s time to transfer my cash from my Tangerine RRSP to my RBC Direct Investing RRSP brokerage account and invest it in some incredibly-low-fee buy-the-entire-market ETFs using those lovely free trades I got for opening my RBC DI account.

Like most of these transfers, I need to fill out a T2033 form to transfer my assets from one RRSP to the other. Transferring the money means I don’t pay any taxes and I don’t lose any contribution room. As usual, I need to fill out the form provided by the place where I want my money to go. So in this case, I need a transfer form from RBC Direct Investing which they will then send to Tangerine.

UPDATE: Please be aware that as of January 2015, Tangerine has started charging a fee if you transfer your RRSP or TFSA from Tangerine to another bank, credit union, brokerage or financial institution.

Before You Start the Process of Transferring Your RRSP Cash to RBC Direct Investing

You’ll need the following info before you start:

the name and address of the bank or financial institution where your RRSP is now
the type of account you are transferring the RRSP money out of (for example, personal or spousal or locked-in)
the account number for the RRSP you are transferring the money out of, and also any other required identifying number such as a client number if necessary
the amount of money you want to transfer.

You will probably need a printer ready to print out your transfer request form.

How to Get a T2033 for RBC Direct Investing

Go to http://www.rbcdirectinvesting.com/
Sign in to your RBC DI RRSP account.
Under the My Home tab, from the list across the top of the screen, click on the Forms link.
Click on the listed link: Transfer Your Personal Account from Another Institution.
On the Transfer Your Account from Another Institution page, click on the link: Transfer assets to your Registered account.

The Introduction Screen
Read through the information then click on the Continue button.

The My Information Screen
Review your name, address, phone number/s, email address and social insurance number. If they are correct, click the Continue button

The Delivering Institution Information Screen

From the drop-down list, choose the bank that has your RRSP money right now.
If it’s not listed, select Other at the bottom of the list.
I had to select Other for Tangerine.
If you had to select Other, you will also have to provide the name and address for your bank or financial institution.
I filled in the fields for
- Other Delivering Institution Name:
- Address (line 1):
- City:
- Province:
- Postal Code:
with
- Tangerine
- 3389 Steeles Avenue East
- Toronto
- Ontario
- M2H 3S8
From the Delivering Institution Account Type: drop-down list select
- RSP
- Spousal RSP; or
- LIRA
In the Client Account/Policy Number: field, type the number for the account from which you are taking the money.
I could only fit in my RSP number not my client account number.
Select one of the following choices by clicking to select the radio button beside it:
- Transfer all of my assets as they are (“as is”) including any existing cash balances to RBC Direct Investing (All in Kind)
- Sell all of my assets and transfer the cash proceeds to RBC Direct Investing (All in Cash)
- Transfer all of my assets. However, sell a portion of them and have the cash proceeds along with the remainder of the account transferred “as is” to RBC Direct Investing (All Assets, but Mixed – in cash and in kind)
- Transfer only a portion of my assets to RBC Direct Investing (Partial)
Because I want to leave $1 in my Tangerine account so that it’s ready and open for a future contribution, I selected the “only a portion” option.
Click on the Continue button.

For my specific choice, I have to give further instructions.

The Partial Transfer Details Screen

Click to select the answer Yes or No to the question: Are you transferring an existing cash balance from your plan?
I selected Yes.
Fill in the Transfer Details for Cash Balance table by typing in the amount of Canadian and/or US dollars you want to transfer into your RBC DI RRSP account or by clicking to select the ALL option for one or both types of dollars.
Click to select the answer Yes or No to the question: Would you like to sell some of your assets and transfer the cash proceeds from the sale?
I selected No.
Click to select the answer Yes or No to the question: Are you moving existing securities to RBC Direct Investing as is (in kind)?
I’m moving cash so I selected No.
Click on the continue button.

If you had something to transfer differently, you may have to complete some other screens.

The RBC Direct Investing Information Screen

Read the information about where you RSP money will be transferred.
From the Transfer to Account: drop-down list, select the proper RRSP account into which to deposit the money. (You really usually only have one choice for this: your RRSP.)
Click on the Continue button.

The Transfer Your Account from Another Institution Screen

Read through what they are proposing to do. This is the information they will be mailing to Tangerine to start the transfer.
If it all looks good, click on the Continue button.
You must now print, sign and return the form to RBC DI. They will send a copy to Tangerine to process the transfer.
- Click on the Print button.
- Click on the Continue button.
- Sign your form.
- Because I’m like that, I also wrote my Tangerine client number and the plan number on the form beside where it listed my RSP account number. (After all there are a lot of Crooks in the world so it might help them to identify me better.)
- Make a copy for your files.
- If possible, RBC DI asks you to include a copy of your most recent statement from the RSP that from which you are transferring out the funds.
Mail the signed form and the statement to
RBC Direct Investing Inc.
Royal Bank Plaza
Address: 200 Bay Street, North Tower
P.O. Box 75
Toronto, Ontario
M5J 2Z5
(Actually always be sure to check the instructions for the most recent address. This is correct as of June 2014.)
You should now expect to wait 2-6 weeks.
Questions are taken at 1-800-769-2560, option 4.
Next
- to start another transfer click the Transfer More Accounts button; or
- click the Done button.
Unless you have anything else you wish to do, click on the Sign Out button.
For added security clear your browser cache and close your browser session.

And Now We Wait

Last time my transfer to RBC DI moved at the speed of a glacier retreating in winter. Let’s see how long this time takes….

UPDATE: How Long Did It Take to Transfer Cash from Tangerine to RBC Direct Investing?

Ok, so here’s what happened.

On June 15 I put the request to transfer the cash into a big red Canada Post mail box.
On June 21 my cash was withdrawn from my RRSP at Tangerine.ca.
On Friday June 27 the cash appeared in my RRSP at RBC Direct Investing. In the Transaction History it was back-dated to deposit on June 26.

So the transfer wasn’t exactly fast but it wasn’t too bad. Now it’s time to start buying some low-fee hold-the-entire-market ETFs with my remaining free trades.