Tag Archives: RRSP

How Fast Can I Sell my BMO InvestorLine AAT770 HISA to Generate Cash to Re-invest?

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I recently bought some of the BMO AAT770 CAD High Interest Savings Account fund within my BMO InvestorLine RRSP. I wanted to test how to make the purchase, and to double check for any quirks or fees (although there shouldn’t be any.) Next, I want to test how quickly the cash comes back into my account if I sell my AAT770 so I can re-invest the money in a stock, ETF, mutual fund or GIC. I’ll give you the good news first, then provide the step-by-step instructions for making the sale.

How Long Did It Take for the Cash to Appear in my BMO InvestorLine RRSP Account After I Sold the HISA Fund Units?

Well so far I don’t know! I’m watching my transaction history to find out. Ok, I’m back. Here’s what happened:

  • On April 11, I bought $5000 worth of AAT770.
  • On April 12, the sale settled.
  • On April 16, I placed an order to sell all $5000 worth of AAT770.
  • On April 17, in the Trading tab, Order Status selection, the order to sell is reported as Filled and sold, but in the My Holdings tab, the cash balance has not increased and the holding of 5000 units of AAT770 is still listed.
  • Now, on April 18, at 8 a.m. all $5000 is back in the cash account in my RRSP. In the My Holdings tab, the cash balance has increased by $5000.87 and the listing for AAT770 has disappeared.
  • The deposit of the $5000 investment was back-dated to April 16. You can see the date they claim it was deposited in the Transaction History, but it is back dated.
  • The deposit of the interest of 0.87 was back-dated to April 17. Again you can see this in the My Holdings tab, under Transaction History.

As I said, the money was actually in the account ready to spend on the morning of April 18. So it took the day I placed the trade plus two days for the cash to appear in my account. It appears, though, that the trade settled in the trade day plus one day. So in theory, you could place an order to buy a GIC or mutual fund one day after the day you placed an order to sell your HISA and it would be fine. Given that stocks take even longer to reach the settlement date, you should be able to place an order to purchase a stock on the same day that you issue the order to sell your HISA. I’m a bit leery of all the warnings InvestorLine placed around a possible delay in settling the sale of the HISA fund. I would probably wait for the cash to appear before purchasing anything, just in case. NOTE: all of the days were business days when InvestorLine was up and open for trades. I’m sure it would have been slower if there was a weekend in the middle.

Did I Read / Write that Correctly? InvestorLine Paid Interest on a 7-Day HISA Deposit?!

Yes, much to my pleasant surprise, I actually received $0.87 interest for the time my $5000 was deposited in the AAT770 HISA fund. I did not expect this, as the terms state that interest is calculated daily and paid monthly and it was not month end. Good on InvestorLine and BMO!

How to Sell Units of AAT770 in a BMO InvestorLine Account

  1. First sign in to BMO Investorline.
  2. From the drop-down list, select the account which is holding your AAT770 units. For example, I selected my RRSP account.
  3. Under the My Portfolio tab, review your holdings of the HISA fund.

If you are ready to sell

  1. Click on the AAT770 symbol.
  2. Or from the Trading menu select Mutual Funds.
  3. Either way opens the Mutual Fund Order Entry screen. Remember the cutoff time for selling a mutual fund today is 2 p.m. ET. If you enter the order after that time, it will take another entire business day to be executed. I’m choosing to place my sell order at 10:20 A.M. ET.
  4. From the Action drop-down list select Sell.
  5. In the Fund Symbol field, type AAT770 if you are selling units of the Canadian dollar high interest savings account.
  6. Click on the Recent Closing Price button to
    • Confirm you entered the symbol for the units you want to sell
    • Confirm it still says No Load
  7. In the Amount field, select either All or type in the amount of dollars or units you want to redeem. If applicable, select Dollars or Units from the drop-down list. I selected All. (Well, actually I first tested it by trying to sell $1000 worth, to see if it would let me go below the $5000 minimum holding. The program responded: “Your order was not processed. The following problem is associated with your order: Warning: This transaction will reduce your fund holdings below the required minimum amount. Please adjust or Sell/Switch all.” Rats!)
    UPDATE: As of 2017 10 03 you can hold a minimum balance of $1 000.
  8. In the Contact Phone # field, type your telephone number.
  9. Click on the Review Order button.

Very interesting! I have not actually entered my trading password yet, so the message is not completely accurate. The program responded:

Your order was not processed. The following problem is associated with your order: You may continue with your order or may choose to change/cancel the order. Warning: This order requires manual processing and may be delayed.

I decided to accept the warning and continue. I clicked on the Accept All Warnings button. [UPDATE: In more recent sales of this fund I no longer receive this warning message.]

The Mutual Fund Order Review screen opens. It repeats at the top of the screen:

If submitted, you are accepting the following warnings: Warning: This order requires manual processing and may be delayed. [UPDATE: In more recent sales of this fund I no longer receive this warning message.]

  1. Review the order details.
  2. If they are acceptable: Type your trading password in the “Please enter your password in order to submit your order” field.
  3. Click on the Submit Order button.
  4. Copy the Mutual Fund Order Confirmation into a document and save it for reference. The Order Reference number will be needed if you have to follow-up with InvestorLine. Again, it states that I have accepted the warning that the order requires manual processing and may be delayed. [UPDATE: In more recent sales of this fund I no longer receive this warning message.]

If desired, under the Trading tab, select Order Status. You should see the details of your sell request order for the HISA fund. The current status is Submitted. Related Reading

Join In Do you use a HISA fund to park your cash while waiting for another investment opportunity? Have you found any quirks? Please share your experiences with a comment.

Transferring RRSP Cash from CIBC to a BMO InvestorLine RRSP Account

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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?

Lessons Learned

  • 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.

Related Reading

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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.