Funding Qtrade Accounts & Linking To Your Bank

You can select how to fund your account at the time you are setting it up or at any time later. If doing it during set up, there is a “Fund” step in the Qtrade online application process. If coming back to fund your account at any time later, you can find it on the website by hovering over accounts and selecting Transfer funds.

This page will go through the details of the three main ways to fund an account.

Electronic funds transfer (EFT)

I find it convenient to link a bank account for right up front. You can then use EFT to transfer money to and from your bank account. An important note is that using EFT, there is a 10 business day hold period before you can use funds transferred into your investment account when you first start. Once you have an established relationship with Qtrade, that hold period will be removed for EFTs up to the amount you already have in your account. For example, if you have $200K invested already, then you can transfer in $200K without the hold period.

At the beginning if you don’t have money or funds transferred into your Qtrade account, another fast way to move money into your Qtrade account and start investing it is to use the “bill payment” method (Option #3) described below.

To set up EFT:

Expand that option on the funding screen and follow the instructions. There are now two options. You can connect directly to your bank (pretty slick). If your bank isn’t on the list, you can upload a void check.

This method is the fastest and most accurate way. The slide show illustrates the first couple steps. It then varies a bit depending on your bank, but just follow the instructions.

Basically, you can use your phone to take a picture of void personalized cheque and then upload the picture. If you are doing the application on a desktop, email yourself the picture, save it to a folder on your computer. When you “choose file”, it will open file explorer and you can then find it and upload the image. You can’t use cheques where you fill in your name and address manually. An alternative is to go to your online banking and download your automatic deposit information as a .pdf file and attach that. The submit button will light up for you to click when it is correctly done. If you are using a non-private or non-secure computer, remember to delete the pictures from it when done if you saved anything to it.

Transfer Accounts (from another investment brokerage)

Basic preparation helps this go smoothly.

This is the option to move cash and/or mutual funds, stocks, bonds, ETFs, etc from investment accounts that you have with another investment brokerage or bank. It is really helpful to have your most recent account statement handy for this part. Have a version saved in an easy to find folder, if electronic from your brokerage. I have seen the Qtrade online entry form time out if you take too long to enter the information (it won’t let you click submit).

Using the transfer accounts option is important to “transfer in kind”.

If you are opening a TFSA or RRSP: Transfer accounts allows you to move your money or investments straight from your old account into your new one. That does not trigger any taxes or cause you to have contribution issues. What you do NOT want to do: sell everything in your old account, take it out to your bank account, and then try to put it in your new TFSA account. Big penalty.

If you are opening a taxable account: Transferring your holdings over as “in kind” will mean that they are not sold and don’t trigger any capital gains/losses for tax purposes. That is important if you intend to keep those holdings. If you are moving to DIY to get rid of your expensive mutual funds, then it may be less important as you plan to sell them anyway. For mutual funds, it is faster to have them sold and do an all-cash transfer to your new account. Plus, that avoids complications with many bank-model mutual funds that are proprietary and can’t be held elsewhere.

Maintaining market exposure during the transition. The other reason to transfer assets “in kind” rather than have them sold to cash and transferring the cash is to maximize your time in the markets. Markets go up ~70% of the time. Time in the market is a better approach than trying to “time the market”. It can take a month for everything to get moved over if the sending brokerage drags their feet. You usually don’t want to miss a month in the market if you can help it. For ETFs and stocks (which can be held anywhere), transferring them “in kind” keeps your market exposure. That said, some mutual funds cannot be transferred in kind (the high-fee ones run by banks and sold by “free” advisors). The best way to minimize time in cash when dealing with those is to transfer “in cash”. More on that below.

Buy tissues for the mutual fund-based providers trying to “save the account”.

If you attempt to transfer proprietary mutual funds (or have them sold to do a “cash transfer”), that could trigger an advisor at the sending institution to call you and try to “save the account”. They will tell you that they cannot be transferred but must be sold and the cash transferred (true). They may use that and other arguments to try and scare you into staying. Educate yourself to be comfortable with your decision regardless.

They may make you re-submit the transfer request if you tried to transfer “in kind” instead of “in cash”. That is a hassle but can be done on the Qtrade site, if you need to. An email to customer support at Qtrade is also effective.

Overview of the Transfer Accounts Section

The expanded the transfer accounts section is shown below. This is the part that people most commonly get stuck on. So, I put some notes for the form in the screenshot. There are also notes on the different transfer types (All In Kind, All in Cash, & Partial Transfer) in the text below. I also provide important information on transfer to/from USD accounts, and an example of the trickiest option (Partial Transfer). Here is a printer-friendly pdf of this section if you want to print out a paper copy.

Transfer Types

If you are only moving over Canadian-listed stocks or funds, then you only need to do this transfer accounts section once. It is easy, especially if you are moving everything over either “All in Kind” (not selling investments) or “All in Cash”.

All in Kind: This option means all of your stocks/funds and cash in the old account gets transferred straight over. Nothing gets sold. However, as mentioned previously, some proprietary mutual funds may need to get to sold since they cannot be transferred out of the old brokerage.

All in Cash: This options means everything in your old account gets sold and the cash/proceeds moved to your new account. The advantage is a fresh start and chance to shed high-fee funds easily. However, there could be capital gains taxes triggers if in a tax-exposed account (ie not an RRSP, TFSA, RESP) as mentioned in a previous section. Also, some mutual funds can have back-loaded fees, as mentioned in a previous section.

Partial Transfer: If you want, you can move part of an account over using a “partial transfer” and leave some stuff at your old brokerage. For example, if there are back-loaded fees that are deterring you or you are just testing the waters of DIY investing before taking the leap. You can move any combination of cash or in kind investments. Don’t worry, if want to move the rest later, you can do this process again later. I prefer one and done, but to each their own. You may have to do partial transfers if you are funding separate USD and CAD accounts as described below.

Moving USD-listed & Canadian stocks/funds to seperate CAD and USD Qtrade accounts.

If you are opening a CAD and a USD Qtrade account, then you may need to do submit two separate transfer account requests. Once, selecting the CAD account, and once selecting the USD account to transfer into. Each would be a partial transfer. A partial selecting the CAD cash and securities for the CAD account. Once completed and the complete transfer button pushed, you get a notice that the request is submitted. You can then select the transfer accounts option again to submit a second partial transfer request to move the USD-listed cash and securities to the USD Qtrade account.

Note: If you are eligible for the $150 transfer-fee refund, it applies to the Qtrade USD and Qtrade CAD accounts separately. So, if you transfer >$15K CAD to the CAD Qtrade account and >$15k CAD-value to the USD Qtrade account, you can submit for re-imbursement of each ($300 plus HST) if you have to pay that much in transfer fees.

An example of a partial transfer.

This is the transfer type that gets people the most hung up. So, I am going to show an example with screenshots. You will want your statement from your sending brokerage handy for this part so that you can fill in the information quickly. Below, I am transferring some AVUV (a US-listed ETF) from an iTrade account to my USD cash (taxable) account and leaving some other holdings at iTrade. I have enough cash to cover the $150 plus HST transfer fee in the iTrade account, but if I didn’t then a couple of shares of AVUV would get sold to cover the fee.

Bill Payment (from your online bank account)

This is the best way to move money from your bank into your investment account when first starting out. The funds are usually usable the next day. In contrast, if you don’t have funds already in your account, there is a 10 business day hold with EFT.

When you eventually have more assets invested in your Qtrade account, the EFT method is available up to that amount and is faster. For example, if you have $200K invested already, you could transfer in up to $200K using EFT and use it without waiting.

The screenshot from the Qtrade site below says it all. You can’t do anything with this now. You have to wait until your Qtrade account opens (usually a day or two after you finish the application).

There is also an important note for corporate accounts. Some banks don’t display a corporation’s full name when paying bills. That could cause rejection because Qtrade needs to see that the name of sender and owner for the account matches. So, try a small amount first to make sure your bank doesn’t have that glitch.