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RSP GIC interest while in transit
September 11, 2024
10:32 am
HISAhopper
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I have a $100k RRSP at EQ. Upon maturity on Sep 15th, I want to tranfer it to Tang for a new RRSP GIC at 4.40% for 2 year term on Sep 15th (EQ is lower at 4.10%).

The transfer will take 4-8 weeks during which time I will earn interest as per Tangerine's rep. I forgot to ask the rep what percentage but I assume it is just a measly 0.3% as per previous transfer experience to a RSP savings account 3 years ago.

However, I got a Tang promotional interest 5.3% till Nov30 on an RSP saving account where the 100K would be deposited upon arriving in Tang. So I assume I would earn a 5.3% interest on the 100K for 4-8 weeks while it is in transit from EQ to Tang.

Does my assumption make sense and should i clear it with Tang via live chat before proceed?

September 11, 2024
10:54 am
HermanH
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Until the funds actually arrive at Tang, I don't think you will earn any interest, whatsoever. You will earn interest on funds that arrive and are placed on hold, though.

September 11, 2024
11:25 am
HISAhopper
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HermanH said
Until the funds actually arrive at Tang, I don't think you will earn any interest, whatsoever. You will earn interest on funds that arrive and are placed on hold, though.  

Interesting. I actually asked Tang rep whether I would lose interest during the 4-8 weeks, he said I would earn interest during that time and paraphrasing, right after completing the paper work to transfer.
I remembered Tang gave me ~$100 which I assume it was interest for transferring ~95K RRSP from BMO roughly 3 years ago.
Thanks Herman for a quick reply.

September 11, 2024
2:27 pm
RYAN
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I am transfering RSP to Tangerine too but not to a RSP GIC. If you check Application Form Status in your Tangerine accout it shows your Estimated Interest Earned and Interest Rate. In my case the rate is 0.3% for up to 45 days the assumed transfer time.

September 11, 2024
3:07 pm
RetirEd
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I remember that when transferring out an RRSP, Tangerine snail-mailed a request to Toronto and Toronto then snail-mailed a certified cheque to the receiving institution. While that cheque was in transit it earned no interest at all. Complaining didn't help; they no longer had the money so it wasn't their problem, regardless of rules about interest during transfers. A certified cheque is considered cleared when issued, they insisted.

RetirEd

September 11, 2024
8:43 pm
Norman1
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I'm puzzled why there would be any interest paid by the relinquishing RRSP issuer once it has mailed the cheque to another RRSP issuer. By that time, the funds are no longer invested in any RRSP investment with the relinquishing RRSP issuer.

If the funds were in an RRSP savings account, then the funds would have been withdrawn by the time the cheque is issued.

September 12, 2024
10:24 am
HISAhopper
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RYAN said
I am transfering RSP to Tangerine too but not to a RSP GIC. If you check Application Form Status in your Tangerine accout it shows your Estimated Interest Earned and Interest Rate. In my case the rate is 0.3% for up to 45 days the assumed transfer time.  

I wanted to live chat to keep record of the conversation but could not find it (did Tangerine get rid of it?).
I called again, Tang rep said I would earn the 0.3% regular interest rate up to 30 days while the fund is in transit, not the 5.35% promotional interest. After looking up the policy he then told me Tang can guarantee the interest rate of 4.4% for the 2 years RSP GIC for up to 60 days instead of the normal 30 days by adding a note to my file.

September 13, 2024
1:08 am
RetirEd
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If there was provision to transfer the registered money electronically, the who's-got-the-cheque game wouldn't be an issue.

RetirEd

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