I almost never write “how to” posts, but after posting about my investment portfolio last week, I’ve had a lot of people e-mail me to ask about the procedure for signing up for the TD e-series mutual funds.
I started investing in TD Canada Trust e-series mutual funds over six years ago, and have been a satisfied customer for most of that time. The e-series index funds are a popular choice because they are a simple way to invest, and have among the lowest Management Expense Ratios (MERs) for mutual funds in Canada. However, the downside is that there is virtually no customer service available for these products.
From my own experience, TD Canada Trust really doesn’t make it easy or straight-forward for investors to purchase or cash out these funds. I’ve blogged about my frustrations before. But since the e-series funds aren’t actively managed, as an investor, you have to manage your own account online. So if you don’t know exactly what to expect, you might get frustrated.
However, the hilarious thing is, you can’t actually open an e-series account online. Aaaaand you can’t open one up at a TD Canada Trust branch either. Instead, you have to fill out a form and mail it in. The same thing goes for cashing out your funds – you can’t redeem your money at a branch or online – it all has to be done manually by filling out a form. This barrier and lack of customer service can make it frustrating for investors.
Here is what I’ve learned about the TD e-series mutual funds:
Open up a standard TD Mutual Fund account
Whether it’s a TFSA, RRSP, or non-registered account, you will be able to open this up at any TD Canada Trust branch. To make it less confusing, don’t tell the representative that you’re going to be converting it into an e-series account. Just open up a regular TD mutual funds account. Make sure you get your account number (you’ll need it to fill out your paperwork) as well as an online banking login number.
You will have to make an initial deposit to open up your account. I’m not actually sure if you *have* to, but I was forced to when I recently went in to open up a TFSA mutual fund account. I told the representative that I didn’t want to deposit any money into the account. But since he said I had to, I told him to transfer the minimum $25 deposit from my chequing account as a one-time transaction.
The representative you meet with will take you step-by-step through a required Investor Profile questionnaire to determine your risk-tolerance level. They will then most likely try to sell you into a mutual fund with a high MER (he tried to sell me into the Comfort Portfolio series). However, it will be easiest to deposit your money in a simple “placeholder” money market fund until you get your paperwork in order and set up with the e-series account.
Convert your account
Now that you’re set up with a mutual fund account, before you are allowed to purchase the e-series index funds, you will have to fill out a consent form, along with an application form (which will include your pre-authorized purchase plan information), and mail it in. You will not be able to fax it in, or return it to a branch.
It takes probably about 1-2 weeks for them to process your paperwork after they receive it. But you’ll have to log onto the TD Canada Trust website to see if your account has been converted over to e-series. I’ve heard of some people getting confirmation e-mails, but I never got one. So just check online every couple of days after you send off your application form.
Cashing out your e-series index funds
Because the e-series funds are self-directed, you will receive virtually no customer service support. In fact, TD Canada Trust mutual fund representatives do not have the capabilities within their computer system to make any sort of e-series transaction for you – whether it’s buying, selling, or trading.
The easiest way to take money out of your e-series account – whether it’s for the Life-Long Learning Plan (LLP) or Home Buyer’s Plan (HBP) – is to switch the amount you want to withdraw over to a non-e-series product, such as the money market fund. I learned this the hard way. Once it is in a regular mutual fund, any mutual fund representative will be able to help you fill out the appropriate paperwork to get funds out of your account.
For more information, you can check out the TD Canada Trust website where they have compiled a somewhat useful database of information on the TD e-series funds.