Whether it’s because you’ve switched banks, changed jobs, moved across the country, or simply want to start managing your own investments, there may come a time when you need to transfer investments from one institution to another.
This article explains how to transfer your TFSA or RRSP to Questrade. We’re using Questrade as an example, the same process (more or less) applies when you transfer existing accounts to any other financial institution.
Why transfer your RRSP or TFSA?
There are several reasons why you might want to transfer your RRSP or TFSA.
Save on fees
High mutual fund fees are one of the most common reasons why investors end up managing their own portfolios. Canadians pay some of the highest mutual fund fees in the world, with equity mutual fund fees costing 2.24% on average.
Whereas with Questrade, a DIY investor can build a low-cost, globally diversified portfolio using just a single asset allocation ETF for a fee of just 0.25%. That’s nearly one-tenth the cost of the average mutual fund.
Free ETF purchases
Another reason to transfer your RRSP or TFSA to Questrade is to take advantage of commission-free ETF purchases. DIY investors who have portfolios at a big bank brokerage likely pay $9.99 per trade, which can add up when you make regular contributions. Transferring your accounts to Questrade allows DIY investors to slash their trading commissions.
Build and manage your own portfolio
New investors may have gotten their feet wet by investing with a robo advisor and now want to try their hand at managing their investments themselves.
You can open multiple RRSP or TFSA accounts with different institutions, as long as you stay within your available TFSA contribution limit and RRSP contribution limit.
So, if you have an existing RRSP or TFSA account at a big bank, another discount brokerage, or with a robo advisor, you can still open one with Questrade to test out the platform before you decide to transfer your entire portfolio over to it.
No tax consequences
When transferring funds between registered accounts there are no tax consequences. You’re simply moving funds from one institution to another. The funds remain in their tax-sheltered containers.
The act of transferring your TFSA or RRSP to Questrade or any other institution does not mean you are making a withdrawal. Even if you transfer your funds “in cash,” they remain inside the friendly confines of your registered (tax-sheltered) account type.
Get $50 free trades
When you start investing with Questrade, you get $50 in free trades. All you have to do is open a new self-directed account and fund it with at least $1,000.
How to transfer TFSA or RRSP to Questrade
Before we get started, let’s address the awkward elephant in the room: no, you do not need to speak to or break up with your financial advisor to move your investments to Questrade. Just open the appropriate account types at the new institution (Questrade) and then request a transfer from an existing account. After that, Questrade will handle the transfer process and ensure your money ends up in the new account within a reasonable amount of time.
But first, you have to put in the transfer request. Follow these steps to transfer registered accounts (TFSA or RRSP) to Questrade.
Step 1: Go to Questrade.
Step 2: Click “Open an Account” (green button, top right of the dashboard).
Step 3: In the “Self-Directed” section, select “TFSA” and/or “RRSP.” You can choose both if you like.
Step 4: Agree to the terms and services and click “Open Now.”
Step 5: You will be prompted to create a user ID and profile. Fill out your name, email, and phone number, and click “Continue.
Step 6: Once you’ve set up your individual profile and get to the main dashboard, then you’ll click on “Funding” at the top of the screen.
Step 7: Click “Transfer Account to Questrade.”
Step 8: Click “Start Request.” Then, do the following:
- Select the Questrade account you are transferring funds into. Note that cash and securities in a registered account can only be transferred to the same type of registered account (i.e., from TFSA to TFSA or from RRSP to RRSP).
- Enter the banking details for the financial institution you’re transferring from. You can find this information in your online banking or from a recent investment statement.
Step 9: Tell Questrade how you would like to transfer your assets. There are two options:
- Transfer everything “in cash,” which means your financial institution liquidates all your securities and transfers the funds to your Questrade account (by literally sending them a cheque that gets deposited in your account).
- Transfer everything “in kind,” which means your financial institution transfers your securities exactly as-is from your existing account to your Questrade account. You can also do a partial transfer by requesting certain securities and/or cash to be transferred to your Questrade account.
Step 10: Enter the estimated value of the assets you’re transferring to Questrade, and whether they’re in CAD or USD.
Step 11: Review, confirm, and electronically sign your transfer request, and you’re done!
READ MORE: Questrade review
How to transfer money to Questrade
Questrade clients can also fund their TFSA or RRSP accounts by transferring money from their bank account. The easiest way to do this is to set up a bill payment through your online banking. Here are the steps:
- Step 1: Go to your chequing account.
- Step 2: Select “make a bill payment.”
- Step 3: Add Questrade as the payee
- Step 4: Enter your Questrade account number.
- Step 5: Click add the payee.
- Step 6: Transfer the funds the same way you pay your bills.
- Step 7: You’re done! Funds deposited to your account will be available in one to two business days.
You can also use Interac Online to transfer money to Questrade directly from your financial institution. Funds will be available for trading immediately, although funds in new accounts will appear one business day after the new account is approved.
You can also set up pre-authorized deposits to fund your Questrade account with one-time or ongoing deposits.
Transfer fee rebate
Most financial institutions charge something called a “transfer-out” fee when you transfer your account to another institution. This fee can often be as high as $150.
That’s okay. When you transfer any account to Questrade from another institution, regardless of the balance, Questrade will rebate up to $150 per account (with no limit on the number of accounts).
To claim your rebate, make sure to submit a statement from your financial institution showing the transfer fees that were incurred within 60 days of submitting your transfer request to Questrade.
Expected transfer time
The transfer may take up to 5 weeks to be processed and another 1-2 days before the cash and/or securities are available in your new Questrade account.
If it has been 3 weeks and you haven’t seen anything show up in your Questrade account, start a live chat with a Questrade representative online and ask them to investigate it for you. It’s Questrade’s responsibility to contact the existing institution and nudge them along to ensure your funds arrive in a timely manner.
There’s a good chance you’ll transfer investments from one financial institution to another at some point during your lifetime. It’s helpful to know that this is a common event that is governed by federal forms, procedures, and timelines.
It’s also comforting to know that you don’t need to have an awkward conversation with your financial advisor. You are in control of your investments and can simply open an account and request a transfer, and the receiving institution will take care of it for you.
Once your funds have arrived safely at Questrade (or wherever you transferred your accounts), check to see whether you were charged a transfer-out fee and make sure you get that rebated. Double-check that you have the right amount of cash and/or securities in your account and that everything was done correctly.
If everything is in order, enjoy investing with your new platform of choice.