Question on transfer rrsp mutual fund to qt

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asked Apr 10, 2018 06:11 AM by
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I recently watched moneygeek YouTube video and felt exactly same frustration on big banks. I reviewed my last 4 years MF perfornace after 2.5% MER: minus, 0.3%,1.5% , minus again. Cumulative return was not better than regular saving in some credit unions. The banks are not making money for us but we are making money for them.

I am trying to transfer my MF to questrade. As I do not have too much, few thousand in each account. It does not make sense to pay 125dollars transfer fee. Anyway I will switch from mt to etf. I am considering to sell mt, and transfer exactly same amount cash into qt RRSP. I asked my friends and banks the answers were the same. As long as the cash amount is the same, no CRA issues. I would like to have somebody and Dr Choi to confirm it is better to do this way comparing with using qt online transfer 'all in cash''. Many thanks.

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Correction, I am trying to sell my mutual fund RRSP in banks and transfer exactly same amount of cash I get from the selling into qt RRSP

Coincollector ( Apr 10, 2018 06:16 AM )edit

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answered Apr 10, 2018 11:06 AM by
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If I am understanding the question correctly, you have 3 choices:

1) Officially transfer existing RSP to QT
No issues with CRA. You do have the transfer out fee. I would contact QT and ask if they are willing to cover the fee that the other institution charges. If the amount is $10K+ they should do it. For small accounts, well it does not hurt to ask.

2) Withdraw money from existing RSP, open a new account with QT, make a new contribution.
You will have have to pay CRA. Whatever you take out will be added to your income and taxed at your marginal rate. CRA does not want to wait until tax time so they charge a withholding tax the moment the money comes out. Also this uses up contribution room.

3) Reduce fees with with the existing RSP
The big banks usually have an Index Mutual Fund for Mutual Fund RSP accounts. This fund will not be exchange traded i.e. not an ETF. Expect an MER of 1% for a bank issued, non exchange traded index mutual fund. You say that you are paying 2.5% now....

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appreciate your answer. Very helpful.

Coincollector ( Apr 10, 2018 06:22 PM )edit
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Asked: Apr 10, 2018 06:11 AM

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Last updated: Apr 10 '18

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