How to Transfer an RRSP

An RRSP transfer is a way to move your assets from one registered retirement plan to another. Financial institutions may charge service fees for an RRSP transfer.

For many Canadians, opening a registered retirement savings plan, or RRSP, is a key step on the road to creating a nest egg for the future.

If you are moving accounts to a different financial institution or want to consolidate multiple RRSPs from different banks to one institution, you’ll need to move them via the RRSP transfer process to avoid having to claim them as income — and pay taxes on that income.

To transfer an RRSP, you’ll need to contact the financial institution that will receive the funds, and ask them to initiate the process.

What is an RRSP transfer?

An RRSP transfer involves moving assets directly from one registered retirement plan into another, either at the same institution or at a different one.

How RRSP transfers work

RRSPs are transferred via direct request to your financial institution. Typically, you’ll open a new account and have that financial institution make the request. If you withdraw your RRSP funds from one institution and deposit them in a new account at another, that doesn’t count as a transfer—it’s a withdrawal, and it will be subject to a withholding tax, which can be up to 30% of the amount withdrawn.

In specific circumstances, such as in the event of a separation, marriage breakdown or death, someone’s RRSP assets may be transferred to the RRSP of their spouse or common-law partner if they are the named beneficiary. However, provincial and territorial laws vary, so make sure you understand the rules where you live.

Transferring your RRSP “in kind“ or “in cash“

When you initiate an RRSP transfer, your financial institution will ask whether you’re transferring your assets in kind or in cash. If you’re doing a straightforward transfer of your RRSP investments from one institution to another, without selling any stocks or ETFs, it’s called an in kind transfer.

How to transfer your RRSP to another financial institution

1. Open a new RRSP account

Both the new and old RRSP accounts must be active to initiate the transfer. You’ll have to provide details such as:

Your name, address and Social Insurance Number.
The existing RRSP plan number and name.
Name and address of the RRSP issuer.
The amount you’re transferring.
Whether you’d like to transfer the assets in cash or in kind.
A copy of your most recent statement of account.
The RRSP plan number and name you’re transferring to.
The name and address of the institution you’re transferring to.

2. Fill out the proper forms

To transfer money directly from one RRSP account to another without incurring tax penalties, you need to fill a T2033 form, which is available on the Canada Revenue Agency’s website.

The financial institution receiving the transfer typically provides its own version of the transfer authorization form, which you can fill out instead of the CRA form. Some institutions also allow customers to initiate RRSP transfers online.

Whether paper-based or online, the RRSP transfer form will ultimately provide directions to both the institution that currently holds your plan and the receiving institution.

3. Wait for RRSP funds to move

It can take anywhere from a few days to six weeks to complete an RRSP transfer, depending on the financial institution.

Your other option is to transfer in cash, which means your original institution will sell your investments to get cash, which it will then transfer to the new institution. Both in-kind and in-cash transfers are carried out without tax penalties when your financial institution moves funds from one RRSP account to another.

Common reasons to transfer an RRSP

You want to move to a different bank

People choose to change financial institutions for a variety of reasons, such as better customer service, to take advantage of lower bank fees or to simplify their finances.

In some cases, financial institutions, robo advisors or discount brokers may offer customers a bonus or an incentive to transfer their RRSP.

Generally, RRSP holders can transfer assets (either cash or investments) between RRSPs at different financial institutions without incurring any tax penalties, as long as the financial institution makes the transfer directly.

The institution you’re leaving may charge an RRSP transfer fees, but in some cases, the institution you’re transferring to will cover these fees.

You’ve experienced separation, divorce or death

For the most part, RRSPs can’t be transferred to other people, even to a spousal RRSP, without incurring tax penalties.

One exception is in the case of separation or divorce. In this situation, one partner can transfer money from the RRSP on a tax-deferred basis, as long as a written separation agreement or court order sets out a division of property.

Another exception is in the event of your death. For example, if you are a parent or grandparent of a child with a registered disability savings plan (RDSP), you can choose to have your RRSP transferred to their RDSP when you die. This is known as an RRSP rollover.

If your spouse or common-law partner is the beneficiary of your RRSP, your plan’s assets can also be transferred directly to their RRSP after your death.

You want to use another type of registered account

In the year you turn 71, your RRSP must be withdrawn as a lump sum payment, or converted to a registered retirement income fund (RRIF) or annuity.

If you transfer your RRSP directly to a RRIF, you will fill out a RRIF application form with your financial institution and you won’t pay tax on the amount. Similarly, if you use your RRSP funds to purchase an annuity, you won’t pay tax on the transaction. However, when you start receiving payments from your RRIF or annuity, you will need to claim them as income on your tax return.

It is also possible to indirectly transfer the funds from your RRSP to a tax-free savings account, or TFSA. However, you’ll have to withdraw the funds from your RRSP before depositing them into the TFSA. In this situation, the money you take out of your RRSP is considered income and will trigger a withholding tax. This type of transfer may only make sense in situations where your income is in the lowest tax bracket or you don’t have another option to access the funds you need.

Yes. According to the Canada Revenue Agency, you can generally move funds (including some investment products, like GICs) from an RRSP to a First Home Savings Account via direct transfer without immediate tax penalties. Such a transfer should not exceed the maximum FHSA participation room that’s available to you.

It depends. If you’re transferring assets directly from one RRSP to another RRSP at the same or a different financial institution, you won’t incur tax penalties. But, if you want to move funds from your RRSP to your TFSA, for example, you will have to withdraw the funds from your RRSP, pay the required withholding tax, and then contribute the cash to your TFSA. Once you factor in the costs of liquidating assets and paying withholding tax, this strategy may not be a good option for funding your TFSA.

No. In general, RRSP funds can’t be transferred to another person, even your spouse. You also can’t transfer your personal RRSP to your spousal RRSP. There are two exceptions: When a marriage or common-law partnership ends or when an RRSP holder dies and has named their spouse or common-law partner as the benficiary.

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