Recently, Tangerine sent me a big package in the mail offering me a cash incentive if I transferred my RRSP savings to them. My first reaction was “Why could they afford to send me this ad, but not afford to send me a letter advising me of their new $45 fee to transfer a RRSP or TFSA out from Tangerine to another bank?” After feeling miffed for a while, I read through the package to see whether their RRSP transfer offer was a good deal or not: here’s what I decided.

Most Places Charge You a Fee to Transfer Out Your RRSP

The first thing you should be wary of if you are considering transferring some or all of your RRSP to Tangerine is that most banks, credit unions and brokerages charge you a fee if you transfer out your RRSP assets. (When this was written, People’s Trust did not charge a fee: so there are some good guys out there.)

PC Financial, for example, charges $50 to transfer out some or all of your RRSP savings. (See: http://www.banking.pcfinancial.ca/mkt/bankaccounts/nofeebankaccount-en.html and click on Charges Apply to get the list of various fees.)

CIBC charges $100.

You’d want to check what your bank, brokerage or other institution will charge you to move your RRSP money *before* you make a decision. It may cost you more than you get as the “bonus” to move your RRSP!

How Much Is Tangerine Offering as a Cash Bonus for a RRSP Transfer?

Tangerine is offering $100 for a RRSP transfer BUT it requires a transfer of at least $10 000.

The transfer must be started before March 31 2015 by submitting a completed form to Tangerine. Tangerine will then complete the form and send it to the place your RRSP is at right now. That company must send Tangerine the cash within 60 days or you won’t get your bonus.

You can see that $100 is just enough to cover the transfer out fee from some places like CIBC so it isn’t a really sweet offer.

You could try phoning Tangerine and ask if they will pay the transfer out fee in addition to the $100 bonus. I’d be a bit surprised if they will but it never hurts to ask. (If it works, please leave a comment to let us know!)

The $10 000 minimum to earn the bonus is a large amount. Many people would be considering opening an online discount brokerage account for their RRSP when they have $15 000 – $25 000. If you have $10 000 to transfer in to Tangerine and if you are planning to contribute $5000 or more to your RRSP this year, you might want to slow down and consider brokerages first. RBC Direct Investing, for example, has no RRSP annual fee if you agree to pre-authorized RRSP contributions.

How Do I Move my RRSP Money?

In the package Tangerine sent me in the mail, they included the form needed to move a RRSP from another bank to Tangerine. You can also download the form easily from the Tangerine website.

Why Would I Consider Moving my RRSP Money to Tangerine?

For the past two years, Tangerine has not offered particularly good rates on its RRSP GICs or on its RRSP daily interest savings account. You can get better rates for both of those elsewhere as I mentioned in my article on RRSP GIC and Cash Deposit rates.
One good thing Tangerine does offer, though, is its Tangerine RSP Investment Funds. The Canadian Couch Potato website recommends these Balanced funds for investors who

• don’t have a lot of RRSP savings so they would have to pay an annual fee to have a brokerage account and would find ETF purchase and sale fees are too high
• don’t want to have to sell and buy different funds to keep their portfolio growth balanced each year
• want to just buy one fund and add new contributions to it and not think about it too much
• want to make small, steady new contributions with no fees

According to the Tangerine sales pitch I received, their three balanced funds have done acceptably in the past, earning between 6-8.59% over the past 5 years or 4.70-4.79% since they were created, depending on the fund. You should read the fund details on the Tangerine website before deciding if one of the funds is right for you. (If these returns seem a bit low, remember these Balanced Funds include bonds as well as stocks so they are less risky but also less likely to generate a huge gain or a huge loss.)

Would I Recommend Someone Else Move $10 000 in RRSP Funds to Tangerine?

Maybe.

If they are only interested in investing in GICs and cash accounts, no. I’d suggest they look at some credit unions, online trust companies and Oaken Financial first.

If they are currently investing in their RRSP at a Big Bank and are paying a high fee (MER) for a mutual fund that is not performing any better than the Tangerine low-fee (MER) funds, then I might.

If they have a small amount in their RRSP and are ok with selling some mutual funds and buying others to keep their portfolio balanced, and if they don’t mind a few hassles getting the account first set up, I’d suggest they consider TD Waterhouse e-funds account. The details are on the Canadian Couch Potato website.

If they can make regular monthly RRSP contributions and have $10 000 already, I’d suggest they look at the RBC Direct Investing brokerage account to see if it interests them.

If they have $25 000 or more and only put money into their RRSP once or twice a year, I’d suggest they look at BMO InvestorLine or CIBC Investor’s Edge. Investor’s Edge is offering free purchases and sales of ETFs until March 31, 2015 in its RRSP accounts although there’s no way to know if they will offer the same deal again next year.

Would I Move $10 000 in RRSP Funds to Tangerine?

No because I have over $50 000 in my RRSP so I prefer to use an online discount brokerage account where I can choose more types of investments.

So sorry, Tangerine, but you just wasted a bit of postage and paper by sending me this offer.

Related Reading

• Where Can I Get the Best Rate for my RRSP GICs and Cash?
• How to Buy a Mutual Fund at Tangerine

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Do you keep your RRSP at Tangerine? Are you using the Balanced Funds or just GICs and cash? Please share your views with a comment.