# TD to RBC: What are the costs of moving banks



## mustafaupk (Aug 31, 2012)

I am planning a move from TD bank to RBC because of the double charge that TD puts on USD conversion in a DRIP in a registered account. Bear with me if these are stupid questions but I would like some insight from people who have moved banks before:
1. Can nvestments can be moved from one bank to another? 
2. Are there any costs associated with moving money and investments?.


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## CanadianCapitalist (Mar 31, 2009)

1. Yes.
2. Yes. Transfers cost between $125 to $150 per account. RBC may be willing to refund the transfer fees if you are bringing in a substantial account. Call and ask them first.

If you are like me, you'd probably find value in having all accounts in one location. If so, consider whether moving accounts elsewhere will be worth the savings.

Assume that you have a $100K across all accounts. Assuming you have 50K in RRSP accounts out of which 30K is in foreign stocks. If the foreign stocks yield 2% and you synthetic DRiP them, the extra cost to you is $27. You should first decide whether the cost savings are worthwhile for you.


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## Robillard (Apr 11, 2009)

Do bear in mind that inter-broker transfers can take a while to process. It also depends on whether you can transfer your investments in kind or in cash. Also bear in mind that you need to complete transfer paperwork for each separate account with your broker. 

Investors transfer cash accounts and RRSP accounts all the time, so the transfer process is relatively swift, typically taking 1-2 weeks, or maybe 3 weeks at most. Transfers of locked-in accounts can take longer. I transfered a registred pension plan to a locked-in RSP earlier this year. It took something like 4-6 weeks, in part because I had incorrectly identified the jurisdiction of the RPP in the paperwork. Even if I had it right it still would have been a 3-4 week process.


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## mustafaupk (Aug 31, 2012)

CanadianCapitalist said:


> 1. Yes.
> 2. Yes. Transfers cost between $125 to $150 per account. RBC may be willing to refund the transfer fees if you are bringing in a substantial account. Call and ask them first.
> 
> If you are like me, you'd probably find value in having all accounts in one location. If so, consider whether moving accounts elsewhere will be worth the savings.
> ...


Thanks for your response. Just to clarify, the cost of moving the account would be from the RBC side or the TD side? If RBC is willing to refund the fees then I don't see any reason for paying that extra $27.


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## MoMoney (Apr 1, 2011)

mustafaupk said:


> Thanks for your response. Just to clarify, the cost of moving the account would be from the RBC side or the TD side? If RBC is willing to refund the fees then I don't see any reason for paying that extra $27.


How about the time and effort spent into the transfer? Paperwork, calls to verify, setting up online and physical visits to brokerage... essentially multiple hours of work to save how much? If your time is worth less than you would save, then by all means go ahead.


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## cardhu (May 26, 2009)

mustafaupk said:


> I am planning a move from TD bank to RBC because of the double charge that TD puts on USD conversion in a DRIP in a registered account.


There may be some valid reasons to switch from TDW to RBC, but this so-called “double-charge” on US$ DRIPs is not one of them ... it is a myth, and you have been misled. 

If you have other reasons for switching, then it is a simple process and if your account is big enough, RBC may even reimburse TDW’s account closure fee ... just don’t be too surprised when the “savings” you were expecting never materialize, because the expenses you thought you’d be avoiding never existed in the first place. 

When you DRIP US$ dividends in a TDW RRSP, forex fees are reduced, not increased. They're not eliminated, but they are not as much as you have been (mis)led to believe. If and when TDW launches a true US-dollar RRSP, it will become a moot point.


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## mrPPincer (Nov 21, 2011)

cardhu said:


> it is a myth, and you have been misled.


not true
there is no misleading, TDW does charge forex twice.

I have taken the time to provide hard numbers and TDW does charge forex once converting US divs to CAD and then again on the way back to US$ if you have DRIP set up.

It is perfectly clear if you read through the following thread, (there is a little confusion near the beginning of the thread but we do come to a consensus) and TDW does confirm that this is true as well..

http://canadianmoneyforum.com/showt...ouse-charges-2-8-for-DRIP-of-US-RRSP-holdings


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## My Own Advisor (Sep 24, 2012)

I called them the other week, apparently TDW has the USD-RRSP account in the pipeline of work to be done next year. If investors with TDW want it bad enough in this forum, I suggest we band together and pepper senior management with requests.


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## GoldStone (Mar 6, 2011)

TDW rep told me last week that USD RRSP should be available in Q1 2013, barring schedule slippages.


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## humble_pie (Jun 7, 2009)

mrPPincer said:


> not true
> there is no misleading, TDW does charge forex twice.


mister pincer is right. There is no misleading. It is a proven fact that td waterhouse charges FX fee twice on DRIP US dividends in registered accounts.

i have an email from a well-known senior tdw team manager confirming this lamentable fact.

here is a recent article in Canadian Capitalist blog confirming this fact.

http://www.canadiancapitalist.com/page/2/

the article states, in part:

_While DRiPs are usually a good thing, investors need to pay attention to the hidden costs they are incurring when they sign up for synthetic DRiPs on US Dollar stocks or Exchange-Traded Funds (ETFs) held in registered accounts such as RRSPs and TFSAs at discount brokers that do not segregate US Dollar and Canadian Dollar holdings (TD Waterhouse would be an example). Investors are probably aware that US Dollar dividends are converted to Canadian dollars at a rate that is typically 1.5 percent higher than the spot rate. But if you had signed up for a synthetic DRiP, the Canadian dollar dividends are again converted to US Dollars at a rate that is 1.5 percent higher than the spot rate and used to purchase whole shares of a stock or ETF. In effect, investors who are DRiPping US Dollar stocks or ETFs in registered accounts could be paying as much as 3 percent in foreign currency conversion charges.

A recent post on Canadian Money Forum provides an estimate of the hit from DRiPing US Dollar stocks in a RRSP account. Client received US$325 worth of US Dollar dividends out of which US$219 was DRiPped into shares and C$96.50 was deposited as cash. An exchange rate of 0.9645 for the converting US dollars to Canadian dollars. If no currency conversion charges were applied on the DRiPs, client would expect to receive $102 as a cash deposit. Instead he received $6 less. In other words, it cost C$6 to DRiP US$219 worth of shares or 2.8 percent._

the CMF post that CC is referencing above is none other than mister pincer's careful research & reportage.

to those who are feeling they must switch their rrsps out of TDW because of this unpleasant double FX issue, may i suggest the following:

1) the problem will be 100% resolved when tdw introduces its long-awaited separate USD & CAD format in registered accounts. These are scheduled to debut in the 1st half of 2013. Parties switching out of tdw at this late date, for this sole reason, are possibly doing themselves a disservice.

2) in the meantime, all tdw clients holding USD dividend payors in registered accounts should make sure these companies are paying cash dividends (FX fees will be charged once) rather than stock dividends (FX fees will be charged twice.)

please note that the list of companies paying USD dividends is not limited to US companies. A number of canadian companies pay dividends in USD only, so investors holding these shares are frequently getting nicked with FX fees although such investors typically are not aware of what is going on.

Canadian Capitalist also has a recent eye-opening article about this practice on his blog. His article includes a list of canadian companies paying dividends in USD only.

3) parties who feel severely outraged over the double-dipping FX issue could ask the big green to reimburse them the amount of the 2nd FX fee that they previously paid on US dripped dividends. I imagine that these amounts, when aggregated in a registered account, will usually turn out to be on the modest side.


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## humble_pie (Jun 7, 2009)

My Own Advisor said:


> I called them the other week, apparently TDW has the USD-RRSP account in the pipeline of work to be done next year. If investors with TDW want it bad enough in this forum, I suggest we band together and pepper senior management with requests.


senior management has been peppered w requests for umpteen years now. They've long since gotten the memo.

USD rrsp is their top priority. They're working now, have been working for years but alas took wrong turns in the past. Any suggestion that USD rrsp is being put off into next year's pipeline is not true. Nagging them isn't going to make it happen any faster.

what i believe happened - & what increased the delay so much - is that tdw originally bought TOS years ago, thinking it could utilize the TOS mainframe for canadian operations. However testing over many months (year? years??) showed that this wasn't going to work, at least not for registered accounts.

oops, wrong turn.

next, tdw looked to trade architect, the platform that supports its US cousin td ameritrade. More testing was done (year? years??) to see whether this could be adapted to canadian requirements.

oops, another wrong turn.

finally tdw made the decision to build the by-now thoroughly contentious USD registered account platform on its legacy ISM system, the mainframe it has used ever since inception in 1983. This is very difficult to do, ISM is notoriously difficult to work with in the manner required. More testing was & still is required (year? years??)

there is nothing any client can say or do that will make tdw debut its US rrsp even one day sooner. All hands are already on board the project.

tdw clients who can't tolerate the situation should perhaps move to other brokers. Clients who stay should make sure that USD dividend payors in registered accounts - the number includes some leading canadian companies who pay dividends in USD only - clients should make sure that all such dividends are cash divs, not dripped divs.


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## slacker (Mar 8, 2010)

I was one of those who switched out of TDWH to Questrade. It was partially due to the double charge. The Questrade trading cost turns out to be similar to TDWH, once ECN fees are factored in. TDWH service and staff knowledge is definitely superior to Questrade.

I would have no problem switching back to TDWH once they have fixed this USD RRSP/TFSA mess. Come on !! Even the lowly Questrade has had this for years now !!


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## MrMatt (Dec 21, 2011)

CanadianCapitalist said:


> If you are like me, you'd probably find value in having all accounts in one location. If so, consider whether moving accounts elsewhere will be worth the savings.


I keep different accounts at different institutions, every now and then someone will have a problem, just a few months ago one bank lost their network for a day or two. 
It happens, and for that reason I make sure I have redundant access to money.
I have accounts at 2 banks, and for Credit cards I have Visa, MC & Amex.


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## cardhu (May 26, 2009)

mrPPincer said:


> there is no misleading, TDW does charge forex twice.


Sorry, mrP, you’re wrong ... TDW does not charge forex twice ... Mustafa was indeed misled ... but I see from the first line of the thread you referenced that you were also misled ... to your credit, you attempted to resolve the question yourself rather than rely on anonymous internet posters such as the one who misled you ... unfortunately your analysis was flawed, and you came to a wrong conclusion ... details to follow. 

Consensus is irrelevant ... you have a group of people arriving at a common incorrect conclusion because they’re all working from a common incorrect assumption ... consensus? sure .... true? NO.

Are you referring to the “TDCanada” post near the end of your thread? It doesn’t confirm your thesis ... matter of fact, it says nothing about forex fees at all. 

mrP, how many US$ dividends have you DRIPed? Just this one? 

Cancelling your DRIP will cost you in unnecessary forex fees. Fortunately, the cost is trivial in the grand scheme of things, and all of this will become moot if and when TDW introduces a true US$ RRSP capability. But until they do, avoiding US$ DRIPs is sub-optimal. 



slacker said:


> I was one of those who switched out of TDWH to Questrade. It was partially due to the double charge.


Slacker ... how many US$ DRIPs had you gone through before switching? ... or were you acting on rumour?


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## cardhu (May 26, 2009)

”humble” pie said:


> proven fact


LOL ... shades of Leslie ... you two are so much alike ... she liked to play fast and loose with the concept of “proof” as well ... the double-forex charge is neither “proven”, nor “fact” ... it is a myth, as I have already pointed out. 

In another thread, you advised never to rely on anonymous internet sources ... yet, here you are citing an anonymous internet post and an anonymous internet blog ... seems contradictory, no? ... or perhaps what you really meant was that one should never rely on an anonymous internet source unless said source has been personally endorsed by you? 

Most people have known for some time now that communications from TDW on this subject are notoriously inconsistent ... but no matter, I am referring to what they actually DO ... not what one particular individual among thousands might SAY.


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## Spudd (Oct 11, 2011)

I got curious and decided to check my history to find out if I could tell. 

I went to my RSP and used as an example, a transaction for SPY that happened on Oct 31. 

210 shares SPY, dividend per share = 0.77945 . I looked up the historical currency rates for that day and as it happens they were very close to par: 1.0003244174 CAD per USD as per xe.com. So if we take par as a fair rate, I should have received $163.68 in dividends. However, I only received $161.22.

Then, TD was kind enough to DRIP that into a new share of SPY for me. My statement says they charged me $141.58 for this new share. This seems like a fair price and I don't believe they actually did charge a conversion fee. 

The next example I could find was for Corning, from Sept 28. For 202 shares of Corning they gave me $14.61CAD in dividends, should have been $15.15USD. On that day, the exchange rate was 0.9835845020 CAD per USD, so I should have gotten $14.90, 29 cents (1.9%) were charged in conversion. They bought me a new share of Corning for $12.89CAD. On that date, Corning's price varied between $13.02USD and $13.26USD. $12.89CAD works out to $13.11USD which also seems like a fair price. 

So as far as I can tell, the exchange is being charged on the dividends received, but not on the purchase of the new shares.


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## mrPPincer (Nov 21, 2011)

I've provided indisputable numbers proving it, unless maybe you think I had some reason to make them up, but I did give accurate numbers and if you had looked them over carefully the conclusion would have been indusputable.

When I discovered the double FX fee I phoned in and did get confirmation of the fact.
Humble provided confirmation re an e-mail from TDWH HQ, plainly written out for you, just scroll up.
What more proof do you need.

Discussing this is imo a pointless waste of time anyways, since TDW has plans to fix it in early 2013, so if you have been lucky enough to not be double-charged the FX fee cardhu, or even just think you have, either way I'm happy for you.
Lets just agree to disagree and let it go ok?


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## mrPPincer (Nov 21, 2011)

Part of the confusion here could be in that most of the US$ dividends that TDW drips are market drips, with a small minority being treasury drips.

With treasury drips you are possibly avoiding some of the FX fees on the dripped portion, because I think the drips of full shares are not done directly by TDW but by the third party and then remainder of cash being converted to CDN.


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## humble_pie (Jun 7, 2009)

cardhu said:


> ... here you are citing an anonymous internet post and an anonymous internet blog


just curious.

why are you referring to a linked article by Canadian Capitalist, co-moderator of this forum & a well-known expert in financial media, as an "anonymous internet source."

why are you referring to his linked CanadianCapitalist blog as an "anonymous internet blog."


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