# Best way to liquidate mutual fund to buy ETF in another bank



## kalie (Jun 19, 2021)

I have a mutual fund with RBC that I want to sell to buy more VBAL in my TDDI non-registered account. There should be no fees associated with the MF (no load) and currently there should be a capital loss. My question, which may sound stupid, is what is the best way to sell?
My TD contact suggested for expediency to sell mutual fund, have proceeds deposited into RBC chequing account, write a cheque, deposit into TD chequing account, then transfer over into TDDI and buy ETF. Is this really the best way? Thanks in advance.


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## james4beach (Nov 15, 2012)

Sounds good so far, that there aren't any fees and no capital gain to worry about. Once you have the capital loss, make sure you report it on your taxes as it can be applied against capital gains, and carried forward to use later.

I think what you described makes sense. After you sell, write a personal cheque payable to yourself. Just deposit that cheque into your own TD bank account. The only wrinkle I can think of is the potential holding period on the cheque. You can ask the teller at TD to not place any hold on the deposit, mention it's coming from your own account.

If the amount is pretty small, say under $5000, then could also do a cash transfer since it may be faster than cheques (in case of a hold). You would ask the RBC teller for a few thousand cash withdrawal, in 100s. Then walk the cash over to TD. There are never any holds on cash so the funds will be available immediately.

Don't let RBC talk you into getting a cashier's cheque or bank draft, as there is no advantage and there will be a fee. The personal cheque method seems like the best way to me, and even if there's a 5 day hold, I don't think that's a big problem.


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## Beaver101 (Nov 14, 2011)

Are you reliant on that funds from the mutual funds sale in order to buy VBAL over at TDDI? If so, then what you've proposed + J4B's post make sense. 

If not, then just buy the VBAL over at TDDI with your existing monies and sell the mutual fund over at RBC (no fee for selling as per their recent upgraded term) "at leisure".


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## AltaRed (Jun 8, 2009)

An easier way than writing stupid cheques is to deposit the proceeds into the RBC chequing account and then do a Bill Payment from that chequing account to the TDDI investment account. I don't know of any "bank" that does not allow their Bill Payment system to set up an investment account in Canada as a Payee.


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## scorpion_ca (Nov 3, 2014)

RBC will charge you a transfer out fee once you close the account and TDDI may not cover it if you deposit a cheque. I would do the following -


Sell the fund and keep the cash in RBC
Initiate the transfer through TDDI
Once you get the RBC statement of transfer out fee, submit it to TDDI for reimbursement


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## AltaRed (Jun 8, 2009)

scorpion_ca said:


> RBC will charge you a transfer out fee once you close the account and TDDI may not cover it if you deposit a cheque. I would do the following -
> 
> 
> Sell the fund and keep the cash in RBC
> ...


Are you sure about that? The OP didn't say anything about a RBC Direct Investing account. I have assumed (maybe incorrectly) this could be a mutual fund held with the Asset Management group within the branch operation itself. There should be no account closing fee.by selling the fund in RBC and depositing the cash into the OP's chequing account. Nor did the OP say this is the only asset held at RBC.

If it is indeed a RBC DI account, then I agree with you to follow the steps you articulate.


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## kalie (Jun 19, 2021)

AltaRed said:


> Are you sure about that? The OP didn't say anything about a RBC Direct Investing account. I have assumed (maybe incorrectly) this could be a mutual fund held with the Asset Management group within the branch operation itself. There should be no account closing fee.by selling the fund in RBC and depositing the cash into the OP's chequing account. Nor did the OP say this is the only asset held at RBC.
> 
> If it is indeed a RBC DI account, then I agree with you to follow the steps you articulate.


That is correct. It is held with the bank, no direct investing. Phew, I did not think there would be transfer out fees in this cast.


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## kalie (Jun 19, 2021)

scorpion_ca said:


> RBC will charge you a transfer out fee once you close the account and TDDI may not cover it if you deposit a cheque. I would do the following -
> 
> 
> Sell the fund and keep the cash in RBC
> ...


There was a transfer out fee when I help RSP at RBC, but don’t think there will be as it is held with the bank, and not a self directed account.


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## kalie (Jun 19, 2021)

Beaver101 said:


> Are you reliant on that funds from the mutual funds sale in order to buy VBAL over at TDDI? If so, then what you've proposed + J4B's post make sense.
> 
> If not, then just buy the VBAL over at TDDI with your existing monies and sell the mutual fund over at RBC (no fee for selling as per their recent upgraded term) "at leisure".


Yes, the proceeds from the mutual fund will be used to buy VBAL.


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## kalie (Jun 19, 2021)

james4beach said:


> Sounds good so far, that there aren't any fees and no capital gain to worry about. Once you have the capital loss, make sure you report it on your taxes as it can be applied against capital gains, and carried forward to use later.
> 
> I think what you described makes sense. After you sell, write a personal cheque payable to yourself. Just deposit that cheque into your own TD bank account. The only wrinkle I can think of is the potential holding period on the cheque. You can ask the teller at TD to not place any hold on the deposit, mention it's coming from your own account.
> 
> ...


Thanks for the feedback. Love this forum and such helpful and knowledgeable people.


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## james4beach (Nov 15, 2012)

AltaRed said:


> An easier way than writing stupid cheques is to deposit the proceeds into the RBC chequing account and then do a Bill Payment from that chequing account to the TDDI investment account


Great idea. Does TDDI still support that? I haven't tried this in a long time.

Search for bill payee of TD Waterhouse or TD Direct Investing, then enter your account number as the destination. Maybe send $1 to first test it.


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## kalie (Jun 19, 2021)

james4beach said:


> Great idea. Does TDDI still support that? I haven't tried this in a long time.
> 
> Search for bill payee of TD Waterhouse or TD Direct Investing, then enter your account number as the destination. Maybe send $1 to first test it.


Cool. Was wondering how I would send it that way


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## AltaRed (Jun 8, 2009)

RBC Banking has the following Payee that can be added. Just go to Add Payee and type in 'TD Waterhouse' and search.....to get


​TD WATERHOUSE INVESTOR SERVICES CAN


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## james4beach (Nov 15, 2012)

Thanks for this reminder @AltaRed , I actually forgot about this method. I might even use that myself to zip some cash over to TDDI soon.


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## AltaRed (Jun 8, 2009)

I sometimes use BMO Banking Bill Pay to move funds to Scotia iTrade and BNS Banking Bill Pay to move funds to BMO IL. It's usually a bit faster (execution time) than to use intermediary online banks like EQ Bank to do me2me transfers. However, the latter is a well known and well oiled process when one has linked external accounts to online banks like EQ Bank. 

Anything is better than writing and depositing cheques!


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## gardner (Feb 13, 2014)

Have you established that the fund at RBC can't be transferred in-kind to TDDI? That is how I cleared out my Scotia MFs -- I transferred them to TDDI. Some I sold, others I kept as is. This gave me the simplicity of dealing with everything in once place and I could convert the funds in chunks, spreading the capital events across three years.


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## AltaRed (Jun 8, 2009)

The OP doesn't want that mutual fund any more. Avoid the risk of transfer fees by moving cash.


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## kalie (Jun 19, 2021)

AltaRed said:


> The OP doesn't want that mutual fund any more. Avoid the risk of transfer fees by moving cash.


That is correct. Thanks AltaRed but thanks for the suggestion Gardner.


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