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Hubert to offer RRSP/RRIF and transfers of US$
December 17, 2014
11:22 am
Greg Franklin
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Kanaka, by all means if there is no other option, it is better to get a written email that can be printed or kept on file saved on your computer than just a phone call but some of us are only 20 minutes or 30 minutes away from their branches so it is not that much of a hassle.

This is especially true if there is larger RRSP, RRIF, TFSA etc. amounts like $40,000 or $50,000 etc. that need to be transferred and invested.

These are all good suggestions and sometimes email is the only way or the best, most convenient way that proves to give the same result anyway.

Take care and shopping around and using forums like this is very helpful and useful for many of us.sf-smile

December 17, 2014
11:29 am
kanaka
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Lessons learned......

For us that are part of "DIY Financial" and possibly in your 60s and you are looking for an institution with good rates here is what I have learned.

A must
Good rates
Good service

Important questions to ask
Do you offer RRSP and RRIF
Fees to manage
Are GICs redeemable early
Do you have any no cost options to redeem more than the minimum mandatory RRIF withdrawal

Other questions
Do you have push/pull
Do you have cheques (are printed cheques free)
Do you have ATM cards
Do you have a list of ATMs that I can use
Complete list of charges and fees
Statement frequencies and method of delivery
Reminder of GICs about to mature, offered

Any others?

Add on questions
Do you offer a savings-rate RSP/RIF
Do you offer short terms for RRSP/RRIF
Will you reimburse transfer-out fees
If you do NOT offer RRIF or RRSP savings accounts where are my matured GIC funds held and do the matured funds accumulate interest
How long does it take to move a RRSP GIC to a RRIF GIC and how much lead time do you require to move it

December 17, 2014
11:43 am
Loonie
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I think some of these institutions have not been too interested in RIFs up until now simply because it's an investment which is guaranteed to decline in value and eventually disappear. Similarly, if the account if fairly small to begin with, it's hardly worth their while at all.

However, the light bulb is now on, as they see that they are starting to lose their RRSP accounts - most of which are held by older people - so they have no choice but to offer RIF sooner or later, or else they lose the investment sooner. And they may be losing other kinds of accounts as well because of this limitation in service.

You can be sure that, whatever the official reason, it's really about their bottom line.

It seems that your dilemma now, kanaka, is whether to chose something that doesn't yet exist! Neither Hubert nor State Bank of India are being very clear about timelines. And, by the time they actually get around to it, there is always the risk that either rates in general will have fallen, theirs in particular, or that their RIF rates will not match their other rates.

Edited to show correct bank.

December 17, 2014
11:48 am
Loonie
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I just saw your list of q's, kanaka.

I would add this one: Do you offer a savings-rate RSP/RIF? Some do, some don't. Oaken doesn't. Sometimes this type of account can be quite useful as a place to dump your money while you are waiting for something else to happen - e.g. anticipating an interest rate hike, waiting for money to be added to the account from another institution etc.

And this one: will you reimburse transfer-out fees? Some will only do this if you are moving the money into a GIC, even if they do offer savings alternative - e.g. Accelerate.

December 17, 2014
12:07 pm
Greg Franklin
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Kanaka, another important question is how long will you guarantee your RRSP, RRIF, TFSA GIC rate when I transfer them?

Most that I know offer 30 days for RRSP's, RRIF's like Duca Credit Union, ING Direct did that too and some may guarantee it for as long as you have signed the transfer. The first two are more common.

Another important question is what RRIF GIC payments will I get or can I choose? I know from others experiences that for RRIF GIC's, you have to get it in writing a signed contract of how you want your payments. Oaken Financial requires you to do this choosing, monthly, quarterly, semi-annually, annually.

Also, how much RRIF withholding taxes are you going to take from each RRIF GIC payment? I know from others that you don't pay withholding taxes if you take minimum payments but after that, it is in excess of minimum payments 10% up to $5,000, 20% from $5,000 to $15,000 and above $15,000, it is 30%.

This should be accurate but check with CRA or your tax accountant, tax preparer or other professionals, information sources you believe to be reliable to make sure these are correct.sf-smile

December 17, 2014
12:08 pm
kanaka
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I

Loonie said

I think some of these institutions have not been too interested in RIFs up until now simply because it's an investment which is guaranteed to decline in value and eventually disappear. Similarly, if the account if fairly small to begin with, it's hardly worth their while at all.

However, the light bulb is now on, as they see that they are starting to lose their RRSP accounts - most of which are held by older people - so they have no choice but to offer RIF sooner or later, or else they lose the investment sooner. And they may be losing other kinds of accounts as well because of this limitation in service.

You can be sure that, whatever the official reason, it's really about their bottom line.

It seems that your dilemma now, kanaka, is whether to chose something that doesn't yet exist! Neither Hubert nor ICICI are being very clear about timelines. And, by the time they actually get around to it, there is always the risk that either rates in general will have fallen, theirs in particular, or that their RIF rates will not match their other rates. The latter is a greater danger with ICICI, in my opinion, as they already have different rates for different kinds of accounts. (Their non-registered 5yr rate is only 2.65%.) You also don't know what minimums they might impost, although this may not be a huge concern, depending on your situation.

What to do?!

==============================================================================

Sorry I screwed up the block quote on my last edit.

If you are loyal to your institution and want to do one stop shopping then the ICICIs of the country will be losing out. But also keep in mind that they all have computers and can run reports of the amount of funds held by customer by age and perhaps for some it is not worth being in the RRSP or RRIF business but of course they don't know if their customers have investments elsewhere. Although if you have an adviser when you do your disclosure they will ask.....and perhaps that is an add on question that is none of their business.

Also keep in mind that in Huberts (and Implicitys) defence they never offered RRSP or RRIF and Hubert has announced they are now offering both soon.

Any one that is loyal to a financial a instituon has a to give their head a shake and if you are "DIY Financial" you should mimick what an adviser does by offering investments from various sources.

Yes I agree...who to choose or wait for.....as I have to reinvest funds in January over 2 institutions and as we all know a transfer is not a one day transaction but most hold their rate or better for 30 days. Will Hubert offer some promo rates when they have RRSP and RRIF in place? Will the new options be errorless? Hmmmm? Can I park the money in RRSP savings or short terms? Not at Oaken?

December 17, 2014
12:18 pm
Loonie
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I asked Oaken about this a few months ago.

"Thank you for your email. Unfortunately the savings account is only available for non-registered deposits."

Perhaps you can get the 90 day term deposit? but not a great deal.

I suspect that advisors really are required to ask what other assets you have as part of their due diligence. If you don't have any other assets, then it's more incumbent upon them to be conservative in their advice, and vice versa. In other words, there are consequences. But I don't see why you would need to tell them where exactly you have the money, just what sort of investment it is in.

It's true that Hubert and Implicity did not offer RRSPs, and Implicity still doesn't. Still leaves CDF and Peoples, as well as ICICI who offer only RSPs. I think though that this will be the trend of the future, for them to offer both, because it makes economic sense for them to do so, sooner or later.

December 17, 2014
12:19 pm
kanaka
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Loonie said

I just saw your list of q's, kanaka.

I would add this one: Do you offer a savings-rate RSP/RIF? Some do, some don't. Oaken doesn't. Sometimes this type of account can be quite useful as a place to dump your money while you are waiting for something else to happen - e.g. anticipating an interest rate hike, waiting for money to be added to the account from another institution etc.

And this one: will you reimburse transfer-out fees? Some will only do this if you are moving the money into a GIC, even if they do offer savings alternative - e.g. Accelerate.

Surprisingly I was able to edit and add on your questions.

December 17, 2014
12:26 pm
Loonie
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I believe the forum is currently set up so that you can amend posts for one day.
However, this is the kind of situation that illustrates how useful it would be (and clutterless) to be able to go back and make changes later. It would be really nice and efficient if you could continue to refine your list. I think I'm on record as favouring this approach.

December 17, 2014
12:51 pm
Greg Franklin
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I'm surprised that Oaken Financial does not have a 30 day term deposit RRSP rate available like non-registered term deposits or a cashable option like mutual funds have where you withdraw up to 10% per year with no penalties and in this case not losing interest.

It looks like Oaken wants to be one of the higher GIC payers for RRSP's, RRIF's, TFSA's of 1 year to 5 years. This is probably where they make a good interest margin on.

Maybe a good strategy is to have one specified RRSP, RRIF account where you will be withdrawing money from a savings account like the Manitoba credit unions, Accelerate, Achieva etc.

Your other RRSP, RRIF accounts can be GIC's that make specific payments monthly to annually from another financial institution that has those highest rates like Oaken Financial.

December 17, 2014
2:05 pm
Loonie
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Greg Franklin said

Maybe a good strategy is to have one specified RRSP, RRIF account where you will be withdrawing money from a savings account like the Manitoba credit unions, Accelerate, Achieva etc.

Your other RRSP, RRIF accounts can be GIC's that make specific payments monthly to annually from another financial institution that has those highest rates like Oaken Financial.

One has to be very careful when meddling with RIF withdrawals. CRA rules require that the mandatory percentage must be withdrawn annually from each and every RIF account. Depending on the institution's rules, you can take out more if you want.
Before anyone starts thinking about voluntary withdrawals from any RIF account, they need to consider the total of their mandatory withdrawals and resulting tax liability.

kanaka, you are probably already aware of this as you have been dealing with RIFs already, but others might not be.

December 17, 2014
2:36 pm
kanaka
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Loonie said

Greg Franklin said

Maybe a good strategy is to have one specified RRSP, RRIF account where you will be withdrawing money from a savings account like the Manitoba credit unions, Accelerate, Achieva etc.

Your other RRSP, RRIF accounts can be GIC's that make specific payments monthly to annually from another financial institution that has those highest rates like Oaken Financial.

One has to be very careful when meddling with RIF withdrawals. CRA rules require that the mandatory percentage must be withdrawn annually from each and every RIF account. Depending on the institution's rules, you can take out more if you want.
Before anyone starts thinking about voluntary withdrawals from any RIF account, they need to consider the total of their mandatory withdrawals and resulting tax liability.

kanaka, you are probably already aware of this as you have been dealing with RIFs already, but others might not be.

Yes I am aware...but keep forgetting about it. I am still a youngster, so the mandatory RRSP to RRIF conversion has not hit me yet. The only reason that I have RRIF accounts at this time is for "income splitting" that isn't allowed for RRSP withdrawals. At this point we only have 3 RRIF accounts at Manulife with $100 each in them after our 2014 withdrawals. I plan to remove approx 12,500 to 15,000 each every year GIC's for the amounts we plan to withdraw and move them to a RRIF before the withdrawal. And that leads to another question....how long does it take to move a RRSP GIC to a RRIF GIC and how much lead time do you have to give the financial institution to move it?

And it makes sense to do the mandatory withdrawal from EVERY RRIF account as you must withdraw the minimum amount of your total investments. BUT it is kind of unfair if you have 3 RRIF accounts and you withdraw the minimum or more from one of them.

Let me explain my reasoning for last comment. CRA trusts us to control ourselves to not over contribute to RRSP or TFSA. And there is a penalty if you do. CRA's tracking is improving with automation and what the financial institution are expected to report. Every year we receive a confirmation of our tax return with a summary of RRSP contribution room. "My Account for Individuals" shows all TFSA activity for the year. You receive a T slip for RRSP or RRIF withdrawals. So why could we not be supplied with the minimum amount of RRIF withdrawal that is required for the next tax year??

December 17, 2014
3:01 pm
Loonie
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If it's within the same institution, I don't think it should take any time at all for them to move GIC from RSP to RIF, no more than it does to move any RSP to RIF. I moved one in one visit to bank, and also made a withdrawal from RIF at the same time. However it wasn't a GIC.

I think the rule is not unfair if you do it their way - i.e. the first thing you do is withdraw the minimum from each, and then take whatever else you want afterwards. But I am betting a lot of people will get caught, and probably have, because logic suggests that if you have a total of, for example, $100,000 in RIFs, maybe spread over 3 accounts, and your mandatory withdrawal rate is, for example, 4%, that you ought to be able to just take $4000 out of one of them and be done with it, as it is simpler. But that is not the way the gov't thinks! "Gotcha!", say they.

December 17, 2014
3:03 pm
kanaka
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See what I added to my last comment.

December 17, 2014
3:33 pm
Greg Franklin
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Kanaka and Loonie, I have never seen a financial institution that someone has a RRIF either invested in a GIC, term deposit, mutual fund etc. that has not taken out the minimum mandatory or required CRA RRIF withdrawal per year.

Yes, people should be aware of what this is on an annual basis but the chances of having a RRIF at 71 years old or earlier and having it compound interest or gains or growing in value more than the minimum mandatory, required RRIF withdrawal is really difficult to happen to someone holding RRIF's.

I thought that financial institutions in Canada are required by law by CRA and income tax act to withdraw these minimums from all RRIF accounts based on a person's age or the age of their spouse if chosen by the RRIF account holder.

If someone is interested in the minimums that they need to do every year required by CRA and the income tax act, they can use this RRIF Withdrawal Schedule Generator, http://www.fiscalagents.com/to.....ched.shtml.

Just make sure you put the amount, average annual rate of return, the year the RRIF was created and your age.

I found it to be quite accurate. It is easy to use and quite accurate as you can compare to other websites and the CRA.sf-smile

December 17, 2014
4:14 pm
Greg Franklin
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For example, at Oaken Financial, a RRIF that was started on January-1-2015, $100,000 3.05% 5 year monthly paying RRIF GIC, principal and interest included would require a total of $615 a month or $7,380 in the beginning of the first year of 2015.

I know Oaken Financial's 3.05% rate is gone by December-19-2014 but I am just using it this way to make a simple example.

I know that the annual minimum withdrawal required by CRA does require a 7.38% for RRIF's created after or on 1993 from the beginning market value of the RRIF in which this case is a 71 year old.

December 17, 2014
5:35 pm
Greg Franklin
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Loonie, just for some clarification, ICICI Bank of Canada's 2.65% 5 year GIC rate for non-registered money is for their redeemable GIC at 0.75% a year rate when redeemed early.

Remember ING Direct had a 0.50% early redemption GIC rate but now Tangerine Bank got rid of that.

Their 5 year GIC that is not redeemable for non-registered money is 2.85% and is fully locked in like Oaken Financial, State Bank of India Canada, Duca Credit Union and others etc...., http://www.icicibank.ca/person.....up_td.page?.

They only offer annual compounded interest GIC's so there is no annual interest paying option like other financial institutions.

I believe you meant to say that Hubert and State Bank of India Canada are not giving clear timelines on when their RRSP's, RRIF's and RRIF's will be available for their clients and new ones.

Kanaka now has a dilemma to maybe choose one of these 2 financial institutions that still have one has no RRSP's, RRIF's Hubert Financial versus State Bank of India Canada has only RRSP's but no RRIF's yet in existence.

This is making things more complicated and frustrating to say the very least.sf-confused

December 17, 2014
5:52 pm
Greg Franklin
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Kanaka, just to let you know, I noticed that State Bank of India matched their GIC rates up to 2.85% for 5 years for non-registered money but State Bank of India Canada has higher 1-4 year RRSP, TFSA rates and the same rates for 3.00% for 5 years since around late September, http://www.sbicanada.com/Pdfs/.....ntrate.pdf.

ICICI Bank of Canada, http://www.icicibank.ca/person.....up_td.page? , http://www.icicibank.ca/person....._tfsa.page? , http://www.icicibank.ca/person.....?#toptitle.

It looks like there is a competition between themselves as 2 big Indian banks now registered Canadian Banks in Canada.

However, State Bank of India Canada has been here much longer from around the early 1980's compared to ICICI Bank of Canada where it has started in Canada in the late 1990's.

State Bank of India Canada does give the option for GIC's for non-registered money if you want annual interest paid or compound interest over 2-5 years. RRSP's and TFSA's for both financial institutions are only allowing compound interest.

I hope this cleared up this information about these 2 financial institutions and their GIC, RRSP, TFSA rates.sf-smile

December 17, 2014
5:57 pm
kanaka
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I don't think I would deal with ICICI but I still have Oaken and Accelerate. It will interesting with the expected rate increases in mid next year what Oaken will be doing for rates from December 20 til then. If something comes up with Hubert by mid Feb I might be able to cash in. I have a GIC maturing first week of January that has to be transfered and then 2 more transfers one at a time.

December 17, 2014
6:03 pm
Greg Franklin
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Kanaka, don't be so sure that interest rates will be higher in 6 months or so. I don't know if you noticed but bond yields in Canada, U.S. are collapsing.

I wrote about it in one of my posts a day ago. Nobody really knows but rates went higher last year and have fallen this year alot, bond rates I am referring to.

We were so far insulated because of Oaken Financial and other promos short and longer term but they are coming to end very soon or are some are already ended.

I hope I am wrong but with all the intensifying turmoil in the world these days and equity markets at all time highs, anything can happen which usually translates into weaker growth GDP, lower employment or higher unemployment, falling interest rates or cuts if things get worse.

Just food for thought but who knows what will happen in 2015 and after that. One thing is for sure, the last 7 years, interest rates on GIC's, bonds and anything interest bearing, compounding in RRSP's, RRIF's, TFSA's, RESP's, LIRA's etc. are way down from 4.75%, 5.00% to 2.40% to 3.09% at best.sf-smile

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