So you’ve heard great things about Questrade and are ready to move your investments over. I’ll cover how easy it is to transfer your TFSA to Questrade in five simple steps, which will also reduce the chances of any issues down the road.
Step 1: Get basic information for your existing account
Step 2: Save a copy of your latest TFSA investment statement
Step 3: Open a TFSA account with Questrade
Step 4: Complete Questrade’s transfer-in prompts
Step 5: Wait for your assets to transfer over
Make sure to follow each step since the internal processes at financial institutions can differ. If you are looking to transfer to any other financial institution in the future, step one and two are always a best practice to follow.
Five steps for transferring your TFSA to Questrade
1) Getting your basic account information for your existing account
Hopefully, you have a general idea about your current TFSA account and the shape that it’s in. You may have even looked over a quarterly statement fairly recently.
If you have a statement handy, you will be able to find a lot of the information that you will need to begin the transfer.
The account number
Your current TFSA account number is one of the important pieces of information that you will need for your transfer.
This number can be different based on which institution your TFSA is currently with.
Make sure to double-check that the number is correct, or this can cause problems once the transfer process begins.
Your financial institution
Knowing where your money or investments are at the moment is also important. It may seem redundant, but banks and brokers can have different names or departments which can be confusing.
Example 1: RBC
If your TFSA account is currently with RBC, here are some different departments that it may be with:
- RBC Dominion Securities
- RBC Royal Bank of Canada
- RBC Direct Investing
- RBC Investor & Treasury Services
Example 2: TD
If your TFSA account is with TD, here are some possible departments:
- TD Ameritrade
- TD Canada Trust
- TD Direct Investing
- TD Future Builder
- TD Waterhouse Canada Inc.
Finding out which department or area of a company is holding your TFSA account can be confusing.
Look for a phone number on your investment statements, or log in to your account online to check.
What you have in your account
Your account can be:
- Invested
- Sitting in cash
- A combination of both
Find a recent approximate value for the account, which includes investments and cash. You also want to double-check to see if your cash and investments are in Canadian dollars, US dollars, or a mix of both.
Once these are all done, you are ready to move on to the second step.
2) Saving a copy of your most recent investment statement
People often skip this step when they are looking to transfer institutions. The purchase price of any investment in your TFSA account is referred to as its book value.
When accounts transfer between brokers or banks, book values sometimes get recorded incorrectly.
Having a statement handy that lets you see the book value of each investment will allow you to double check the values once your Questrade TFSA is set up.
If you find that one or more of your book values are incorrect after the transfer, call Questrade and have them correct the mistake.
By the end of step two, all of your important details should be easily accessible.
3) Open a TFSA account with Questrade
After getting together all of your current information, it’s time to open up your TFSA account with Questrade. If your account has already been opened, you can skip this step.
You have two choices when it comes to how your account will be managed:
- Self-directed – You will trade and manage the investments in your TFSA account.
- Questwealth portfolios – Your account will hold a basket of exchange-traded funds. The portfolio is managed by the Questrade team. There is a minimum required investment of $1,000 to access these portfolios, as well as additional fees. You can open an account with Questwealth here.
This helpful guide will walk you through the steps of opening your TFSA account with Questrade.
Once your Questrade TFSA account has been opened, it’s time to transfer in your current TFSA.
4) Complete Questrade’s transfer-in prompts
You’ve got all of your information together, and your Questrade TFSA account is set up. The transfer prompts are very straightforward, and look like this:
Log in to your Questrade account
Once you are logged in, click on Funding at the top of the page, and then on Transfer account to Questrade. Click the green “Start Request” button on the middle of the page.
Choose individual TFSA
Your money will be transferred into your individual TFSA account with Questrade.
Remember to be very careful here and to use the same information that you got in step one.
Enter your current TFSA account number from that institution
Double-check your current TFSA account number to make sure that there are no mistakes.
Decide how you would like to transfer your investments
There are three options here for transferring your account:
- All in cash – your current financial institution will sell all of your investments and transfer over the cash balance.
- All in kind – all of your investments and other assets are transferred over exactly as they are
- Partial Transfer – you can choose which investments to transfer to Questrade, or a specific amount of cash
Enter your estimated account value and currency
This is where you will also need the details from step one. Try to use an account value that is as recent as possible.
Confirm and Sign
The last page will give you an overview of the information you have already entered and also give you a rough idea of how long the transfer will take.
This video does an excellent job of outlining everything in this step. It also walks you through the specific steps involved with a partial transfer.
5) Wait for your assets to transfer over
This is probably the most difficult step of the whole process. Depending on where your investments are coming from, it can take several weeks for the transfer to complete.
Brokers and dealers are notorious for making the transfer out process as painful as possible. These institutions make money by charging fees on investments held with them over time.
They sometimes go through a lot of trouble to make your transfer-out process difficult.
The good news is that you can sometimes call in to try and speed up the process. If markets are volatile, a lot can happen in a few weeks while your account is transferring over to Questrade.
It doesn’t hurt to contact the bank or broker that you are transferring out from and ask them to rush the transfer.
Some other key things to consider when Transferring to Questrade TFSA include:
Transfer fees
Transferring a TFSA usually comes with a fee determined by your current bank or broker. These transfer fees can be anywhere from free to $150.
If you are transferring between several institutions within a short period of time, these can add up.
The good news is that Questrade currently covers up to $150 per account if you are transferring any account over.
Fees for transferring out your Questrade TFSA
Once your TFSA account with Questrade is funded, you will have a good sense of how the platform works and what the service level is like.
If you decide to transfer your TFSA out from Questrade in the future, for whatever reason, they will charge a fee.
An overview of all of their administrative fees is on their website, and a TFSA transfer out will currently cost you $150.
Transferring between different account types
Transfers can only be done between accounts of the same type. In this guide, we assume that you are transferring your current TFSA account to a TFSA account with Questrade.
You can’t transfer assets between different account types, even if they are both registered.
Examples of Transfers that will not work:
- Transferring from an RRSP to a TFSA.
- Transferring from other registered accounts (LIRA, RRIF, RESP) to a TFSA
- Transferring from a non-registered cash or margin account to a TFSA
Different Institutions that you can transfer from
Transferring a TFSA can be done between any institution in Canada. The process for each is the same as above.
You can:
- Transfer your TD TFSA to a Questrade TFSA
- Transfer your RBC TFSA to Questrade TFSA
- Transfer your Tangerine TFSA to Questrade TFSA
Questrade’s transfer address and phone number
In some cases, you may need to provide Questrade’s corporate address for transfers. For those specific situations, you can include:
Questrade, Transfer Department
5700 Yonge Street
North York, ON
M2M 4K2
To contact Questrade back office about any issues or questions, give them a call at 1-888-783-7866.
Transferring your TFSA and contribution room
Contribution room basics
Your annual TFSA contribution room applies to all TFSA accounts that you have open. If you contribute $2,000 to a TD TFSA and $2,000 to a Questrade TFSA in a year, your contribution room is decreased by $4,000.
There is no limit to how many TFSA accounts you can have at different institutions (including Questrade).
How the transfer to Questrade impacts your contribution room
The good news is that transferring between banks or brokers does not impact your contribution room.
Your overall contribution room is affected by money coming into or out of a TFSA account. A TFSA to TFSA transfer keeps your investment within the same type of account.
Transferring stocks between accounts at Questrade
Your new TFSA may be part of a larger portfolio that you have with Questrade. In a lot of cases, investors will have other accounts at one brokerage. Some examples include:
- RRSP
- RESP
- Non-registered trading account (cash or margin)
- LIRA
Transferring stocks, or even cash, is not possible directly between different accounts. Each account has different tax implications, and some may even have limits on when you can access your money.
Moving money between accounts is usually a two-step process. The first step is usually to withdraw cash from one of the above into a linked bank account.
The next step would be to deposit the cash into the second account.
Be very careful when moving money between accounts, especially if the accounts are registered. Large tax implications can be triggered through withdrawals.
Some accounts may also have further restrictions on when and how money can be moved around.
Transferring your advisor-managed TFSA to Questrade
Investors can sometimes become unhappy with their investment or financial advisor. You can switch any advisor-managed TFSA to Questrade.
It doesn’t matter if it will be self-directed or going into a Questwealth portfolio.
Be very careful if transferring out from a financial or investment advisor. If they are using mutual funds or segregated funds within your TFSA, there may be hidden fees involved with selling those positions early.
Potential Tax Consequences
Transferring assets, even within the protective bubble of a TFSA, can come with its own set of tax challenges. Here are some specifics to consider:
- Withdrawals Instead of Transfers: Always ensure a direct institution-to-institution transfer. Mistakenly withdrawing and then depositing can impact your TFSA contribution room, possibly leading to over-contribution penalties.
- Capital Gains or Losses: A potential pitfall occurs when assets are unintentionally sold during the transfer. This can lead to capital gains or losses realization. Even though TFSAs typically offer tax-free growth, any missteps during transfer might inadvertently trigger taxable events.
- Dissolution of Special Investment Vehicles: Unique funds or structures might come with specific tax nuances. If these are dissolved or sold, unexpected tax consequences could arise.
- Penalties for Early Withdrawal: Some investments, notably GICs or specific mutual funds, may come with penalties if withdrawn before a set period. While these are technically not taxes, they can still impact your financial outcome significantly.
Conclusion
Following the above steps should make your transfer to Questrade as easy and painless as possible.
If you are looking to manage your own investments within your new Questrade TFSA, make sure to check out our 2022 Ultimate TFSA Guide.
It contains a ton of useful content around building wealth within your TFSA, as well as useful guidelines to follow.
