RRSP Full, pay 10 bucks to reinvest distributions?

[human]

So I never really thought of this problem as I started investing in my RRSP. I have no more contribution room left and got a distribution of about 200 bucks. I'm with BMO, I don't want to pay 10 bucks to reinvest this, I normally invest a couple of thousand at a time. What can I do here?

Going forward I assume I could set up DRIP, would that cause any tax problems? I assume not am I right? I'm real dumb about what can be done in each account without getting screwed in tracking etc.

[human]

Thanks Ben, I guess a whopping 200 bucks not invested won't hurt my returns all that much this year!!

[Heckler]

Set up DRIP.  Just call BMO to do it.

With BMO, it can only be done with $CAD funds, not USD. You will still end up with cash leftovers.

[powersuitrecall]

I'm with TD, but here's what I do.  I take my distributions plus my yearly contributions and invest in efund mutuals as per my asset allocation (there is no cost to buy/sell these at TD).  Once a year I sell the efunds and add to my ETFs.  The fees on the efunds are higher (~0.5%), but I feel it's worth it to stay invested and avoid a bunch of trade charges.

The other option is to go with Questrade where ETF purchases are free.

[thriftyc]

DRIP is the way to go.... Use new contributions as your main rebalancing mechanism.

[powersuitrecall]

I know this is not my thread, but I'd like to thank everyone for the indirect nudge.  I called today and turned on DRIP for all my ETFs at TD.  So simple.  It makes much more sense than complicating things with eFunds.

Cheers!

[human]

Ughh thanks for the reminder I still haven't done it!!!!!

[thriftyc]

I know this is not my thread, but I'd like to thank everyone for the indirect nudge.  I called today and turned on DRIP for all my ETFs at TD.  So simple.  It makes much more sense than complicating things with eFunds.

Cheers!

I use TD for my ETF's as well, super easy to have the drips reinvested, no cost.

[GreatLaker]

I invest my distributions in either a broker HISA or low fee balanced index mutual fund.

Here are two articles on broker HISAs:
http://www.canadiancapitalist.com/high-interest-savings-accounts-at-discount-brokers/
http://canadiancouchpotato.com/2010/10/12/parking-cash-in-your-portfolio/

They are savings accounts that you purchase in broker accounts like shares of a mutual fund. Interest rates are not great but better than nothing.