You've seen the fee math. Now you need the actual steps. Here's exactly how to move your money from expensive bank mutual funds to low-cost ETFs — with specific instructions for each Big Five bank.
Switching isn't always the right move — and even when it is, how you switch matters. Answer these three questions first.
RRSP, TFSA, RESP, FHSA: You can sell and rebuy without tax consequences. The money stays in the registered account. No capital gains triggered.
Non-registered (taxable) account: Selling mutual funds triggers capital gains (or losses). If you have large unrealized gains, you may want to spread the switch over multiple tax years. Capital losses can offset gains — so if you're sitting on a loss, switching actually gives you a tax benefit.
DSC (Deferred Sales Charge) mutual funds were banned for new purchases in June 2022, but older purchases may still have exit penalties. Check your statements for a "DSC schedule" — penalties typically start at 5-6% and decline to 0% over 7 years. Most funds allow you to redeem 10% per year penalty-free. If your DSC schedule expires soon, it may be worth waiting.
Sell and rebuy is simpler and faster. You sell your mutual funds, transfer the cash, and buy ETFs. Downside: you're out of the market for 1-3 days during the switch.
Transfer in-kind moves your holdings as-is to the new brokerage, then you sell and rebuy there. Takes longer (2-4 weeks) but you can stay invested during the process. Most brokerages will cover the transfer fee if you're bringing $25,000+.
Regardless of which bank you're leaving, the process follows the same structure.
Open a TFSA, RRSP, or non-registered account at Questrade, Wealthsimple Trade, or your bank's own discount brokerage (TD Direct Investing, RBC Direct Investing, etc.). Match the account type — RRSP to RRSP, TFSA to TFSA. Takes 15-30 minutes online.
The new brokerage handles the transfer paperwork. You fill out a transfer form (usually online) specifying what you're moving. They contact your old institution. You don't need to call your bank — and your bank can't legally block the transfer.
In-kind transfers take 1-4 weeks depending on the institutions involved. Cash transfers (if you sold first) take 1-5 business days. Your old bank may charge a transfer-out fee ($50-$150 is typical), but many receiving brokerages reimburse this for accounts over $25,000.
Once the transfer lands, sell the mutual funds. Mutual fund redemptions settle next business day (T+1). You'll have cash in your account within 1-2 days.
With cash settled, buy your chosen ETFs. For most people, a single all-in-one ETF like XEQT, VEQT, XGRO, or VGRO is the right call. One purchase, globally diversified, automatically rebalanced, 0.20-0.24% MER. Done.
Each bank has its quirks. Here's what to know for yours.
Common funds you're probably in: RBC Select Balanced (1.75% MER), RBC Select Growth (1.82% MER), RBC Canadian Equity (1.72% MER), RBC Global Equity Focus (2.01% MER).
Your options:
Watch out for: RBC advisors may try to redirect you to RBC InvestEase (their robo-advisor at 0.50% MER + fund MERs). It's better than their mutual funds but still more expensive than DIY ETFs.
RBC-specific tip: If you're in RBC Select funds and don't want to leave RBC entirely, ask about Series D — same fund, lower MER (typically 0.30-0.50% less), available through RBC Direct Investing. Not as cheap as ETFs, but a quick win if you're staying put.
Common funds you're probably in: TD Comfort Balanced Growth (1.98% MER), TD Comfort Conservative Income (1.83% MER), TD Canadian Equity (2.12% MER), TD Monthly Income (1.53% MER).
Your options:
Watch out for: TD's class action settlement ($70.25 million) was for charging trailing commissions at TD Direct Investing — a discount brokerage where no advice was provided. If you held mutual funds at TD Direct Investing between 2008-2019, you may be eligible for compensation. Check the settlement website.
TD-specific tip: TD e-Series funds (TDB900, TDB902, TDB911, TDB909) are genuinely good products. If you're intimidated by ETFs, switching from TD Comfort funds to TD e-Series is a massive improvement with minimal effort. You can always move to ETFs later.
Common funds you're probably in: BMO SelectTrust Balanced (1.88% MER), BMO Balanced ETF (1.67% MER — this is a mutual fund that holds ETFs, not an actual ETF), BMO Canadian Equity (2.09% MER).
Your options:
BMO gotcha: "BMO Balanced ETF" (the mutual fund) has a ~1.67% MER despite having "ETF" in the name. It's a mutual fund that invests in BMO ETFs — you're paying an extra layer of fees for nothing. Buy the underlying ETFs directly and save 1.4%.
Common funds you're probably in: CIBC Balanced Fund (1.95% MER), CIBC Canadian Equity (2.26% MER), CIBC Managed Balanced Growth (2.15% MER), Renaissance Canadian Growth (2.48% MER — one of the priciest on the market).
Your options:
Watch out for: Renaissance is a CIBC subsidiary. If your advisor put you in Renaissance funds, you're paying some of the highest MERs in the country. Renaissance Canadian Growth at 2.48% MER means nearly half your gross returns go to fees in a typical year.
CIBC-specific tip: One Redditor discovered a $956 annual trailer fee on their CIBC account that they thought was "free." If you're with CIBC, check your CRM2 annual statement — the fee disclosure section. The number might surprise you.
Common funds you're probably in: Scotia Canadian Balanced (1.93% MER), Scotia Canadian Equity (2.08% MER), Dynamic Power American Growth (2.44% MER — Dynamic is Scotia's subsidiary).
Your options:
Watch out for: Dynamic Funds (Scotia's brand) has some of the most expensive actively managed funds in Canada. Dynamic Power American Growth at 2.44% MER is competing against S&P 500 index ETFs at 0.08-0.10% MER. That's a 2.3% annual headwind the fund manager has to overcome just to break even with the index.
| Bank | Transfer-Out Fee | In-House Discount Brokerage | Trade Commission |
|---|---|---|---|
| RBC | $135/account | RBC Direct Investing | $9.95/trade |
| TD | $150/account | TD Direct Investing | $9.99/trade |
| BMO | $125/account | BMO InvestorLine | $9.95/trade |
| CIBC | $100/account | CIBC Investor's Edge | $6.95/trade |
| Scotiabank | $150/account | Scotia iTRADE | $9.99/trade |
Fee reimbursement: Questrade reimburses transfer fees up to $150 on accounts over $25,000. Wealthsimple has occasionally offered transfer-fee rebates — check their current promotions. The transfer fee is a one-time cost; the MER savings are forever.
No tax consequences. Buy, sell, switch — whatever you want inside a registered account. The money never left the tax shelter. This is the easiest scenario.
Selling triggers a capital gain or loss. If your mutual fund has gone up since you bought it, you'll owe tax on 50% of the gain at your marginal rate. If it's gone down, you have a capital loss you can use to offset other gains.
Example: You bought $50,000 of TD Comfort Growth. It's now worth $62,000.
The $12,000 gain is taxable — $6,000 is added to your income. At a 30% marginal rate, that's $1,800 in tax. Annoying, but you'll save far more than $1,800 in reduced MER fees over the coming years.
Strategy for large taxable accounts: Sell in tranches across multiple tax years to spread the capital gains. Or sell in a year when your income is lower (parental leave, sabbatical, career change).
Don't let tax tail wag the investment dog. Yes, switching triggers some tax. But staying in a 2%+ MER fund for years to avoid a one-time tax hit is usually worse math. Run the fee calculator with your actual numbers.
If you sell a mutual fund at a loss and buy a "substantially identical" investment within 30 days, CRA denies the capital loss. This mostly matters if you're selling a Canadian equity mutual fund and immediately buying a Canadian equity ETF. Solution: wait 31 days, or buy a non-identical fund (e.g., sell a Canadian equity fund, buy a global equity ETF).
Banks don't like losing assets under management. Here's what you'll hear and the reality behind it.
"You'll lose the benefit of professional management."
Reality: 80% of Canadian active equity fund managers underperform their benchmark over 10+ years, after fees. The "professional management" is statistically more likely to hurt than help. The data is clear.
"ETFs are risky — you have to manage them yourself."
Reality: An all-in-one ETF like XEQT holds 9,000+ stocks across 40+ countries and rebalances automatically. It requires less management than a bank mutual fund portfolio that needs periodic rebalancing. Buy it and do nothing.
"You could lose your contribution room if you withdraw from your RRSP."
Reality: You're not withdrawing — you're transferring. An in-kind or cash transfer between registered accounts is not a withdrawal. Contribution room is preserved. This is either ignorance or deliberate misdirection.
"Let me put you in our lower-cost options instead."
Reality: Ask what those options are. If they offer Series D with a significantly lower MER, that might actually be reasonable. If they offer another Series A fund with 1.6% instead of 2.1%, they're just shuffling deck chairs.
Plug your actual fund MER and balance into our calculator. The number usually shocks people.
Fee Calculator → Compare ETFsThis guide is for educational purposes and is not financial advice. Transfer fees, commission rates, and fund MERs change — verify current rates with your institution before proceeding. Tax situations are individual; consult a tax professional for advice specific to your circumstances. Always read the Fund Facts document before investing.