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Transfer RRSP from CIBC to Simplii
January 5, 2018
6:47 am
davidgeorge
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If I transfer RRSP from CIBC to Simplii, does anybody know if
Q(1) CIBC charges $100 fee? Q(2) Simplii considers the fund New money for 3% promotion rate?
I can't get definite answers over the phone.

January 5, 2018
4:51 pm
Loonie
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Is the money at CIBC in an ordinary RSP account or is it in their brokerage? Fees will likely vary.

If it's in brokerage, I wouldn't count on it getting to Simplii in time to get much benefit from current promo, whether or not it qualifies. Even if it's in a regular account, it will take at least a couple of weeks. Then, you might be looking at moving it somewhere else again.

January 5, 2018
6:25 pm
Doug
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davidgeorge said
If I transfer RRSP from CIBC to Simplii, does anybody know if
Q(1) CIBC charges $100 fee? Q(2) Simplii considers the fund New money for 3% promotion rate?
I can't get definite answers over the phone.  

Where are you transferring from? The fee depends on the "losing FI," as Loonie mentioned.

Can you clarify your #2 question?

Cheers,
Doug

January 5, 2018
7:39 pm
davidgeorge
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Loonie, The money is at CIBC in an ordinary RSP account.
Doug, Both questions are for money from CIBC to Simplii.
I thought that since CIBC owns Simplii, so money from CIBC to Simplii is still in CIBC and "losing FI" (CIBC) is not losing, thus no fee should apply to the transfer. However, one can also argue since CIBC owns Simplii, money from CIBC to Simplii is not a new money.

January 5, 2018
8:28 pm
Loonie
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I would vote for CIBC and Simplii claiming to be sufficiently separate that CIBC fee does apply and is counted as new money at Simplii. That would be consistent with arrangements with other banks that I have been aware of. Each entity has to show its own profit, acquisition of new clients etc., even at the expense of the other.

I don't understand, though, why you would want to do this for what I assume is a temporary rate at Simplii. If you move it somewhere else, they might reimburse your fee - or at least part of it. $100 is on the high end of fees, but certainly not unheard-of. I'll bet it wasn't that high when you took out the RSP in the first place, when you signed on the dotted line. Perhaps the math works for you somehow.

January 6, 2018
3:51 am
davidgeorge
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5 years ago, we were offered a good rate GIC in CIBC, now it comes to renew, and the rate in CIBC is miserable. I am trying to see what I can do. Maybe I should just get a 5 year GIC at 3% from any FIs (Hubert, Oaken, Motive..)

January 6, 2018
10:18 am
Doug
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Thanks for clarifying, davidgeorge. I see what you're getting at. CIBC owns Simplii Financial entirely, yes, but like Loonie said, the "transfer" would be counted as "new money" for the purposes of the promotion. And, even though it might be as simple as literally walking a form up a few flights of stairs (or down, as the case may be) from CIBC's back office to Simplii's, in the Scarborough "borough" of Toronto, the reality is they're still making you do a T2033 transfer form; hence the fee. True, though, if you were going from CIBC (probably not from Simplii, though) to CIBC Investor's Edge or even CIBC Investor's Service (their mutual fund dealer), even better, they'd be practically falling over themselves to either waive or reimburse "transfer fees". sf-cool

$100 is quite a lot and that's one of the "knocks" I have against CIBC actually, their annual custodial fees on mutual fund accounts and higher-than-normal transfer fees. I guess, if the fee were $25-50, perhaps with the extra "bonus interest," you could justify the transfer more easily. I guess it depends on the amount you're transferring, too. One option might be to "negotiate" a fee reimbursement with Simplii if you agree to put x percent into a minimum 1-year Simplii GIC and the rest into their RSP savings account, perhaps. Do this via secure or unsecured e-mail, if possible, for a paper trail.

Cheers,
Doug

Footnote: With banks centralizing their operations, even IF the back offices were located in the same building, the funny thing is it'd probably still go out in the nightly inter-office courier to yet another back-office processing and sorting centre for overnight delivery back to the same building, different business "unit" on a different floor. The joys and wonders of centralization and efficiency! The courier services must love our paid consultants' thinking and "sway". 😉

January 6, 2018
10:55 am
Loonie
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I don't deal with Simplii so I don't know about their rate structure. Do they not also have a transfer-out fee? They are usually in tandem with Tang, more or less.

I would not be inclined to Doug's idea of having both a short and long deposit at Simplii for the sake of fees. You'd end up with two transfers-out fees in the long run, and these fees have a way of escalating when you're not looking.sf-surprised This is one reason why I am attempting to amalgamate my TFSAs rather than have little bits at 5500+ in various places. Your answer may depend on how much money you have in this account.

I think I'd look around and see who is offering an exemplary longer term rate (certainly more than a few months, but up to you), and also which of them would reimburse the exit fee, and how much of it they would reimburse. Also, make sure they guarantee to keep the rate until the money arrives as there are a lot of transfers this time of year and some FIs aren't very swift - even though they can charge a fee, they are not absolutely required to meet any particular deadline. If you found some place that would reimburse the whole thing but only charges 50 for its own exits, you might be ahead, but not guaranteed. The more you have in it, the more likely they will reimburse the whole thing. Accelerate has ceiling of $50.

Alll of these fees should be prohibited in my opinion, but doubt that will ever happen. They are just trying to penalize/discourage people from moving their money. In the case of the BigBanks in particular, which are notorious for low GIC rates, it's extremely unlikely you'll get a good rate twice, so they think they have you boxed in with the threat of a $100 fee. I would just get out of there regardless, take the hit, chalk it up to experience, and give them lots of well-deserved bad publicity. I wouldn't reward them with any more of my business. National Bank charged me $100 for simply cashing out an RSP, regardless of whether I kept the money with them or not. I did not, of course, and will never deal with them again despite having had my mortgage with them for as long as I had one.

January 6, 2018
11:02 am
Doug
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Loonie said
I don't deal with Simplii so I don't know about their rate structure. Do they not also have a transfer-out fee? They are usually in tandem with Tang, more or less.

I would not be inclined to Doug's idea of having both a short and long deposit at Simplii for the sake of fees. You'd end up with two transfers-out fees in the long run, and these fees have a way of escalating when you're not looking.sf-surprised This is one reason why I am attempting to amalgamate my TFSAs rather than have little bits at 5500+ in various places. Your answer may depend on how much money you have in this account.

I think I'd look around and see who is offering an exemplary longer term rate (certainly more than a few months, but up to you), and also which of them would reimburse the exit fee, and how much of it they would reimburse. Also, make sure they guarantee to keep the rate until the money arrives as there are a lot of transfers this time of year and some FIs aren't very swift - even though they can charge a fee, they are not absolutely required to meet any particular deadline. If you found some place that would reimburse the whole thing but only charges 50 for its own exits, you might be ahead, but not guaranteed. The more you have in it, the more likely they will reimburse the whole thing. Accelerate has ceiling of $50.

Alll of these fees should be prohibited in my opinion, but doubt that will ever happen. They are just trying to penalize/discourage people from moving their money. In the case of the BigBanks in particular, which are notorious for low GIC rates, it's extremely unlikely you'll get a good rate twice, so they think they have you boxed in with the threat of a $100 fee. I would just get out of there regardless, take the hit, chalk it up to experience, and give them lots of well-deserved bad publicity. I wouldn't reward them with any more of my business. National Bank charged me $100 for simply cashing out an RSP, regardless of whether I kept the money with them or not. I did not, of course, and will never deal with them again despite having had my mortgage with them for as long as I had one.  

How so, Loonie? The GICs and savings accounts would be in the same RSP; one plan, one fee, unless banks and CUs are doing things radically different these days. 🙂

Yes, they would have a "transfer out" fee, too. I never advocated taking them up on the offer; that's for the OP to do. In terms of due diligence, that's also within his purview and it's not my "job" to mention that when he's just asking about transferring up to CIBC. For all I know, he might be intending to stay with Simplii Financial long-term. sf-cool

I would not necessarily try and negotiate reimbursement of "transfer out" fees in both directions. You need only negotiate it one way, on the "in," and then should you transfer those assets out, you would negotiate that beforehand again with the new FI. This is the way the system works - until FIs do away with transfer fees, which seems unlikely. Telling them, "I want you to also waive any potential transfer out fee from Simplii Financial, too," is a "dead giveaway" to them that you're a "rate chaser" and likely would significantly hamper your "negotiating power" in getting CIBC's "transfer out" reimbursed. Make sense?

If, however, he's intending to "rate chase" in a registered plan, then I, too, would advise against this. The fees as a percentage of your average assets might "eat you alive" and would eat in to your total return. 🙂

I would, also however, agree with you on having fewer RSPs and TFSAs. I have one RSP, one locked-in RSP and one TFSA. At most, I might have two of each, one for HISAs/GICs with a chartered bank/trust company or credit union, potentially, and my "main" one(s) with a self-directed discount brokerage (Scotia iTRADE currently).

Hope that clarifies!

Cheers,
Doug

January 6, 2018
11:47 pm
Loonie
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I didn't intend that anyone would attempt to negotiate fees coming and going with same FI. That would make no sense.

I did mean, however, that you would incur two transfer-out fees if you had both a GIC and savings registered accounts, and you transferred them out at different times, separately.

It's difficult, perhaps impossible, to always have the desirable GIC rates if you stick with just one FI. I wouldn't cut it that thin. I suppose you might be able to do this if you just had one big GIC that matured every five years, at which point you looked around for the next best deal, but I don't think most of us do that.
I hope to get it down to 2 or 3 for RSP/RIFs, but I can do that in part because I am actively cashing them out, so capital is decreasing at a decent clip and I could potentially be rid of them within five years, depending on how other sources of income go. Every year, I get rid of another one! Spouse, however, is another matter, and those will drag on til the bitter end and require multiple accounts, but we will try to hold the number down as much as possible, without making significant financial sacrifices to do so.

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