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RRSP and TFSA

Transfers and withdrawals, step by step.

Taking money out of a plan to move it yourself can cost you tax and contribution room. The safe route is a direct transfer between institutions.

Direct transfer, or withdraw and put it back?

Direct transfer compared with withdrawing and contributing again
Direct transferWithdraw, then contribute again
Who moves the moneyYour old institution sends it straight to the new oneYou get the money, then put it into the new plan yourself
Tax withheldNoneRRSP: 10% to 30% withheld at source. TFSA: none
Tax owedNoneRRSP: the whole amount is added to your income for the year. TFSA: none
Contribution roomNot usedRRSP: you need unused room to put it back, and the room you used is not restored. TFSA: the amount returns to your room only on January 1 of the next year
RiskLowA tax bill on an RRSP withdrawal, or a penalty for over-contributing to a TFSA

Tax withheld on an RRSP withdrawal

Tax withheld at source on RRSP withdrawals
Amount withdrawnFederal rateFederal rate in Quebec
Up to $5,00010%5%
Over $5,000 to $15,00020%10%
Over $15,00030%15%

In Quebec, provincial tax is withheld as well. The amount withheld is a down payment: the real tax depends on your income for the year and can be higher. Source: Canada Revenue Agency, tax rates on withdrawals. Read October 2026; check the page for changes.

Checklist

How to move a plan into metals

  1. Check the costs first. Get the trustee’s fees, the storage fee, and the seller’s prices and buyback prices in writing. See what it costs.
  2. Find a trustee that holds physical metal. Most ordinary RRSPs and TFSAs cannot. Ask before you open anything.
  3. Open the same kind of plan at the new institution: RRSP to RRSP, TFSA to TFSA. Money cannot move between an RRSP and a TFSA without being withdrawn.
  4. Ask for a direct transfer. The new institution usually starts it and sends the paperwork to the old one. For an RRSP or RRIF this is recorded on form T2033. Do not ask for the money to be paid to you.
  5. Ask about the transfer-out fee. The institution you are leaving often charges one.
  6. Wait for the cash to arrive in the new plan. Nothing is bought until it does.
  7. Choose the metal yourself. Stick to plain bullion that meets the rules. Compare each price with its live melt value before you approve the purchase.
  8. Get confirmations from the trustee listing exactly what was bought and where it is stored.

Money from a workplace pension

Pension money usually has to go into a locked-in plan, such as a LIRA, and the rules depend on the province or the federal pension law that covers the pension. Ask the pension administrator what you can move, and where.

Why a TFSA withdrawal can cost you

Money taken out of a TFSA is not taxed. But the amount is added back to your contribution room only on January 1 of the next year. If you put it back sooner and have no other room, the extra is taxed at 1% a month until it is removed. A direct transfer avoids this.

If someone says “act now”

There is no tax reason to rush a transfer. Deadlines invented by a salesperson are a pressure tactic. Check that anyone advising you is registered at AreTheyRegistered.ca before you sign.

This page is general information, not tax or investment advice. Rules have exceptions; confirm with your plan’s trustee or a tax professional.