Can I Transfer Money To RRSP Online?

Making an RRSP contribution online is nothing without its trials. The first step is being aware of them; the second is knowing how to counter them. Here are some of the most common problems people fear or face, along with advice for getting through each:

Security Breaches: The thought of one’s hard-earned cash whizzing through cyberspace can feel disconcerting. And although banks use robust security systems and encryption, it pays to be vigilant. Always confirm you’re on the official website (check for https:// and the padlock icon in your browser). Do not open links in unsolicited emails that claim to be your bank — those may be phishing scams. Instead, go directly to your bank’s site yourself or their official app. Also, use strong passwords (and two-factor authentication — a one-time code sent to your phone, for example — which most banks give you the option of having). This makes it very difficult for anyone else to access your active accounts. Raj, one of our clients, confessed he used to only bank in person out of security concerns. We had him turn on biometric login for his bank’s mobile app, and we showed him all the security guarantees that the bank makes. The fact that any reputable institution is federally regulated and typically insured (meaning that, in the worst-case scenario, his money was safe) made the switch to online transfers reassuring​

Mistaking the Transfer: “What if I screw up?” That was one  of the things Sarah worried about. The common mistakes could be sending money to the wrong account or contributing the wrong amount. Fortunately, most online banking interfaces are relatively intuitive. Takes it slow the first time so as not to make mistakes. Make sure you transferred to your RRSP (not, say, your TFSA or another account). Double-check the total — verbalizing it may help (like reading “five thousand dollars” as you look at $5,000 can prevent your eyes from hopping over an additional zero). And as mentioned in the steps, always check the summary prior to confirmation. If you happen to overcontribute, don’t sweat it. Tiny amount-over-contributions (within $2,000 naught the limits) aren’t note punished, but anything overhead that accrues 1% kind every month until removed CANADA.CA​. If that happens, you can typically remedy the situation by withdrawing the excess amount or reaching out to that institution for assistance. One of our clients created two competing automatic contributions (whoops!) and then went over the $500 limit (whoops again), but noticed it a month later. With our help, he completed a T1-OVP notice for the excess contribution and withdrew the excess contribution. It was some paperwork, but all was well. The takeaway: check your contributions every once in a while (which is relatively easy to do online), and you’ll catch any problem before it escalates.

Investments Made Without Guidance: When you transfer online, and particularly if you transfer to a self-directed RRSP, you might sense that you’re all alone in deciding how to invest that money. In an in-person appointment, an advisor may recommend where you should direct your contribution (e.g., into a particular mutual fund or GIC). Online, you have plenty of options — which can be intimidating if you are uncertain about what to choose. The way to terminate this is to use the available resources. Most online platforms come with built-in tools or tutorials to help you select investments based on your goals and risk tolerance. Some banks have an “investment selector” or even allow you to chat with an advisor virtually. You can also take baby steps: there’s nothing wrong with, at least to begin with, making a contribution to an RRSP high-interest savings or a conservative fund until you know more. You can always change investments down the road. In fact, after transferring the money, Sarah called her bank’s investment helpline to discuss which fund to invest in. After 20 minutes, she decided on an RRSP moderate balanced fund. If you require that human touch, however, it’s there to find – even when you carry out the transfer online. Also, Canadian LIC is available to help, and many of our clients transfer funds online but are still consulted with us regarding overall RRSP planning and investment strategy.

Technical Glitches or Access Issues: Let’s be honest, no tech is 100% glitch-proof. The website is down just as you want to make a last-minute contribution, or your Internet sputters out at the most inopportune moment. These things can happen. Planning ahead is the best way to avoid panic. If you can, by all means, do not leave your contribution to the final day! But if you have to and nothing’s working, know that most institutions can process phone transactions as a backup (the wait times might be lengthy during RRSP season, but at least it’s an option). Also, there are a lot of banking apps and websites that allow future-dated contributions — so you could schedule your contribution ahead of time, a few days in advance of the deadline date, and then you don’t even have to log in on the day at all. In Sarah’s case, her initial transfer went through without any issues. But if the site had frozen, her plan B was to attempt the bank’s mobile app, and plan C was to call the customer service line to make sure her contribution got recorded anyway. Her backup plans provided her with some comfort around “What if the computer/internet fails me.”

Not Sure if Everything Went Through: Some people submit a transfer, then aren’t 100% sure it went. Did I do it right? If your RRSP lives at the same bank as your source account, you should see the new balance immediately (and probably receive an email notification). If it’s a transfer to another institution, you may see just money out of your bank account at first, which can be nerve-wracking until you see you’ve arrived in the RRSP. To avoid this problem, always verify the deposit to the RRSP account. External transfers can take a day or so, so don’t worry if it’s not instantaneous. Do save any confirmation numbers or screenshots. And in the extremely unlikely event that there’s something wrong, you’ve got the proof, and the institutions will track it down. In our experience, missing or misdirected contributions are extremely rare so long as you have entered all information correctly. And if you’re the nervy type, make your transfer a little early. So that you can check everything and rest easily.

In other words, online RRSP transfers are all about security, accuracy, and sometimes  support. As long as you are vigilant (for security), attentive (for accuracy), and holistically proactive in seeking advice when appropriate, you can ultimately conquer these hurdles. By the end of the process, Sarah’s initial fears had gone away for the most part. She learned her best friends are knowledge and preparation. So, to close out with the big question she asked in the beginning: is transferring money into an RRSP online the right decision for you?