How to save on RRSP fees

You can get dinged in several ways by RRSP administration fees, but you can cut down those costs if you know how!

Difficulty Level: average      Time Required: two hours

Here's How:

  1. In a regular RRSP you may be assessed a trustee fee by each mutual fund in your RRSP.
  2. You can eliminate those fees by opening a self-directed RRSP.
  3. It's usually worth opening a self-directed RRSP if you have two or more mutual funds in your account and the trustee fees total $100 or more.
  4. A self-directed RRSP has one administration fee and no trustee fees.
  5. Many brokers waive the administration fee if your account is over a threshold value, usually around $15,000 to $25,000.
  6. To open a self-directed RRSP, contact your broker or financial institution holding your RRSP accounts and tell them you want to open a self-directed plan. They will make an appointment to go through the paperwork with you.
  7. Shop around. Fees vary from broker to broker and bank to bank. You can often transfer your accounts to another institution with little or no penalty (but check first.) And many brokers and other institutions will waive set-up fees when you move your account in from elsewhere.
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Tips:

  1. A self-directed RRSP has the flexibility to include investments besides mutual funds such as stocks, shares in a small business and even mortgages.
  2. If you have sufficient funds in your self-directed RRSP, you can mortgage your own house. Pay interest to yourself rather than to the bank!
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