Author Topic: Canada early withdrawing from RRSP  (Read 1143 times)

martin

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Canada early withdrawing from RRSP
« on: May 23, 2015, 11:55:26 AM »
I transferred my RRSP from my bank (2.5% to manage a tracker!) to Questrade
The day after it transferred, the bank credited a $300 rewards payment to the now empty account.
It would cost me $45 in fees to move the $300 to Questrade

Can I just take it out in cash ?
Do I just then not claim the contribution on next years return - as if I had never contributed ?
Do I treat the money as RRSP income on my return but also claim the contribution  ?
Is there any discretion for small amounts (like there is for small over contributions)

Or do I just leave it there and let them send me statements for 20years in return for 2.5% of $300 ;-)

I'm working / not retired. I don't care about splitting fractions of a % in tax advantage - I just want to not have to deal with that bank.

RichMoose

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Re: Canada early withdrawing from RRSP
« Reply #1 on: May 23, 2015, 12:27:57 PM »
If you withdraw it in cash there will be a withholding tax of 15% (I believe). You will need to claim as income and then if you contribute to your new RRSP you will need to claim the RRSP deduction (more or less cancels each other out).

I think it would probably be best to just transfer and close the RRSP account. Often when you carry small balances the bank will charge annual fees.

martin

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Re: Canada early withdrawing from RRSP
« Reply #2 on: May 23, 2015, 08:30:33 PM »
Thanks,
I think I understand the Canada 15% withholding tax now, I was confusing it with the 15% US tax on ETFs held in an RRSP