Manulife RRSP Update: No-Fee Savings Options for Retirement

What this means for you: If you are looking for a safe place to park your retirement cash, Manulife is offering a way to earn interest without paying fees to move your money in or out.

Manulife has highlighted specific features of its retirement savings accounts that remove common banking fees. This is good news if you want to save for retirement but are worried about getting locked in or paying extra charges.

The Key Benefit: No Transfer Fees

The biggest update involves the Manulife Bank Registered Advantage Account.

This is a high-interest savings account held within an RRSP. Unlike many competitors, this account charges zero fees on transfers out.

This is a major advantage for retirement savers. Usually, banks charge fees when you want to move your investments to another institution. With this account, you can move your money elsewhere without penalty if you find a better rate or investment option later.

Specific Details to Know

According to the source report, here are the specific numbers and features for the Manulife Bank Registered Advantage Account:

• Minimum Balance: There is no minimum balance required. You can start saving with whatever amount you have.
• Liquidity: The account offers daily liquidity. This means you can access your cash if you need it, rather than locking it away for years.
• Fees: There are no setup or maintenance fees mentioned for this account.

GIC Options Available

If you want to lock in a guaranteed rate, Manulife also offers RRSP GICs (Guaranteed Investment Certificates).

• Terms: These range from 30 days to 5 years.
• Safety: These are designed to protect your capital from market volatility.
• Fees: There are no setup or maintenance fees for these GICs.

These options are useful if you want to earn tax-sheltered interest without risking your money in the stock market.

Who Is Affected?

This update affects two main groups of Canadians:

1. Last-minute contributors: If you rush to make an RRSP deposit before the deadline (usually March 1), you often just park the cash in a low-interest account while you decide where to invest it. This account lets you earn high interest immediately while you decide.
2. Conservative savers: If you are close to retirement or simply cannot afford to lose money in the stock market, these high-interest savings and GIC options provide a safe harbor.

What You Should Do

1. Check your current fees: Look at your current RRSP savings account. Does your bank charge you to transfer money out? If so, calculate how much that would cost you.
2. Compare rates: While the "no transfer fee" feature is valuable, you should still compare the interest rate of the Manulife Bank Registered Advantage Account against your current bank’s high-interest savings account.
3. Consider your timeline: If you need access to your cash within the next few months, the "daily liquidity" of the savings account makes it a better choice than the GICs.
4. Talk to your advisor: If you use an advisor, ask them if a no-fee transfer account makes sense for your portfolio strategy.

Bottom Line

Manulife is trying to attract retirement savers by removing the friction of fees. By offering a high-interest RRSP account with no minimum balance and no transfer-out fees, they provide a flexible parking spot for your cash. This allows you to meet CRA contribution deadlines and earn interest immediately, without worrying about being trapped by fees if you decide to move your money later.