TD e-Series Funds are an excellent way to invest in a TFSA, RRSP, RESP, or non-registered account. This is because they have one of the lowest Management Expense Ratios (MERs) available on the market and give you the flexibility to manage your investment portfolio.
Since you will be paying less in investing costs, there is a good chance that your investment returns may outperform many other investors engaged in actively managed funds that normally attract higher fees.
One downside to a TD e-Series funds account is that it is notoriously difficult and confusing to open a new account. This is partly due to the limited and unclear information available on TD Canada Trust’s website and also the lack of familiarity of staff at local TD branches with the e-Series funds.
My TFSA e-Series funds took me a little over three months to get set up. I had filled out the form I found on TD’s website and sent it in as directed, only to have it returned to me after about four weeks with instructions to take my documents to one of the local branches.
After attending the branch and spending several minutes trying to explain my intent to one of the bank staff, I was eventually able to book an appointment with a financial advisor.
Long story cut short… the advisor did not understand what the e-Series funds were about and had to leave me in the office for a while (I guess to go and consult). After he returned, he informed me that I needed to open a mutual fund account, and following this, I could convert it into e-Series funds. Anyway, after about 13 weeks, I had everything set to go.
My kid’s RESP e-Series funds portfolio was much easier to set up after I had learned the ropes…it was up in less than four weeks!
Related: Understanding the RESP
There are two ways to purchase the e-Series funds:
- Opening a TD mutual funds account and converting it to e-Series funds (**this option is no longer offered**). This works very well with smaller accounts as there are no set-up fees or commissions associated with this account. However, if you sell your funds within 30 days of purchasing them, you may be subject to a 2% Early Redemption Fee.
- Through TD Direct Investing. This is TD’s discount brokerage account service which gives you access to purchase a wide variety of investment asset classes, including e-Series funds, other mutual funds, ETFs, stocks, etc. Commissions and fees apply depending on what you trade and your minimum account balance. A TD Direct Investing account can be easily applied for online or by calling 1-866-666-6178.
This post is focused on how to open a TD mutual funds account and then convert it into a TD e-Series funds account. Let’s get started!
Related: A Sample TD e-Series RESP Portfolio
Step 1 – Open a TD Mutual Funds Account
It appears this is no longer an option – see the comment section.
Go to a local TD branch and ask to open a mutual fund account. Take your Social Insurance Number (SIN) card and another piece of government ID along. The financial advisor or representative will ask you a series of questions to complete your investor profile and determine your risk tolerance.
It may be helpful to have taken a look at the Investor Profile Questionnaire before attending your appointment. This will help you to create the investor profile that suits your investment needs and save you time at the branch. Your investor risk profile will influence the asset allocation allowed within your investment portfolio.
Do not talk about the e-Series funds at this time, just open the mutual fund’s account. If the advisor asks if you want to buy any funds at the time of account opening, decline the offer. If you want to set up a Pre-authorised Purchase Plan (PPP), submit a void cheque with your other documents. After appending your signature to a pile of documents, you will receive your account number and online banking details. A bank card will be mailed out to you later.
Step 2 – Mail in the e-Series Funds Account Conversion Form
After setting up your mutual fund account, the next step is to complete the e-Series fund’s account conversion form. Mail it to the TD e-Series Funds Administration address on the form. You should get a confirmation email in 1 to 2 weeks. If you do not get an email, check your online account to see if e-Series funds are now available to purchase.
For those who already have a TD mutual funds account, step 2 is all you need to follow.
Advantages of TD e-Series Funds
- Low Cost: Management Expense Ratios (MERs) for the e-Series funds are lower compared to other index funds. Also, there are no commissions or fees for buying or selling e-Series funds. This low-cost advantage can significantly boost your investment returns over time. For example, TD Canadian Index fund-e has an MER of 0.33%. This is low compared to CIBC’s Canadian Index fund (MER 1.14%), Scotia Canadian Index fund (MER 1%), and RBC’s Canadian Index fund (MER 0.72%). The MER is also much lower than is obtainable for actively managed funds which are generally over 2%. Exchange-Traded Funds may have slightly lower MERs; however, for small accounts, e-Series may be cheaper overall when commissions on ETFs are considered.
- Flexibility: All transactions are conducted online and can be posted at any time of the day or week. Additionally, you can automate our purchases by setting up a pre-authorized purchase plan (PPP).
- Low Minimum Amount: The minimum investment amount is $100, and you can invest as little as $25 per fund per purchase when using the PPP.
- Diversification: The e-Series funds offer a variety of index funds to choose from. These funds track entire indexes in Canadian, U.S., and international markets, making them well-diversified. Additionally, you can have several funds in your investment portfolio. I utilize TD Canadian Index fund-e, TD Canadian Bond Index fund-e, TD U.S. Index fund-e, and TD International Index fund-e, with the allocation of each fund in line with my investor risk profile.
Disadvantages of TD e-Series Funds
- Limited Customer Service: This is pretty much a DIY investing account, and local branch staff may not be able to provide much help if you run into trouble. However, if you have questions, call TD’s Easy Line at 1-866-222-3456 to speak to a representative.
- Portfolio Re-balancing: Over time, the different funds in your portfolio will grow at different rates and will eventually throw your asset allocations off. Once a year, I rebalance my TFSA e-Series funds (and my kid’s RESP e-Series funds) portfolio to the original or desired asset mix by channelling new money to those funds that have fallen below their desired allocations.
There you go! You now know what it takes to open a TD e-Series funds account. You can view an updated post on how to rebalance your TD e-Series RESP Portfolio.
TD e-series update – Effective January 20th, 2020, e-series funds can only be purchased via TD Direct Investing. The ability to open up a new e-series account via a TD Mutual Funds account has been discontinued. Only TD customers with existing e-series account will be able to continue to buy them this way.
Oh no! Where did you get the news? I opened a RESP account at a local branch for my daughter on January 13, 2020. Mailed the e-Series conversion form to Toronto on the 30th. 2 weeks passes and I haven’t heard back from TD yet. I only contributed $7500 and didn’t want to use TD Direct Investing for the fees.
An update: I received a declined letter and the returned conversion form from TD saying the e-Series accounts are no longer available to be opened using the conversion method. You can still buy e- Series funds if you have the existing mutual funds accounts. But for new accounts, you will need to buy them through TD Direct Investing.
I contacted my TD rep and she confirmed that I need to open a self-directed mutual fund account by TD Direct Investing and transfer the RESP account to there. After that I can buy e-Series funds from their Webbroker platform.
It sounds easy but it’s not. Today I went to the bank and tried to open the account with my rep. After spending an hour and trying to submit the application twice, my rep kept having an error message in her system – even after calling the head office for help. She was very apologetic about the system errors and suggested that I come back another day and try again. Ugh …
My husband and I have invested in the e-Series for over 10 years. We have had some decent growth since then. We love the low MERs and no commission fees. However, I really wish TD would make the account opening process easier for the investors 🙁 The account opening process is confusing. And they should update their websites because all the old information about e-Series funds are still on the web.
https://www.tdcanadatrust.com/products-services/investing/mutual-funds/resp-acct.jsp
https://www.tdcanadatrust.com/products-services/investing/mutual-funds/help-acct.jsp
@May C: Sorry to hear about the difficulties you are facing with your TD account.
As per another reader above, you can avoid the quarterly account fees by making a direct deposit of at least $100 per month – not confirmed.
Here’s a link to a post I saw online about how to use TD Direct Investing (WebBroker) to purchase your e-Series:
https://letstalkaboutmoney.ca/step-step-buy-td-e-series-index-funds-td-direct-investment/
You wouldn’t be paying a commission to trade them.
It is unfortunate that TD does not appear to take their e-Series funds very seriously by providing clients with adequate information. Heck, their branch staff hardly know what it is…I guess it doesn’t make them much money.
This was confirmed to me today in my attempts to open up an e-series mutual fund account. The advisor said TD is losing money so it was transferred to TD Direct Investment
Hi
I have opened the new resp account for my 6 months old and got it converted to e-series account yesterday(got the email confirmation) .
At branch , based on my investors questionnaire the advisor opened the mutual fund account with high rish growth portfolio.
My question is how can i set up the grant money to go to money market fund not into growth portfolio or any other fund ?
I called the easyline and talked to one of the mutual fund rep but i was told that he knows nothing about e-series and i have to take care of it myself.
Any help or suggestion will be appreciated .
Thanks
@Karan: Call TD mutual funds directly and ask them to deposit your grant money into the TD CDN Money Market Fund. All the other funds in your portfolio will be e-Series funds.
Alternatively, set up another appointment and ask the advisor at the branch to make the change. Your asset allocation using the TD e-Series can be “high risk or growth,” however, that should be at your discretion using the e-Series funds.
They often try to sell their own in-house portfolios because they earn commissions on those. Do not put your govt grants in this portfolio as you may be subject to short-term trading fees/penalty when you move the money around to rebalance your portfolio.
See more on how this works in the post below:
https://www.savvynewcanadians.com/sample-td-e-series-portfolio-updated-2018/
Hi Enoch , thx for the reply.
I called TD again , this representative did it for me, no problem. I guess it depends on representative to representative.
Also i’ve been told there is short term trading fee when you switch (not redeeming) between funds, unless its money market fund.
For example if i switch funds from MMF to any other e-series index fund irrespective of the date i purchased the funds , there will be no fee.
But if i switch funds from one index fund to another ( lets say for rebalancing) , then there will be fee/penalty if the funds are less than 30 days old.
Is this how it works ?
Thank
Hi there,
I opened my TD E-series through TD Direct Investing (TD Waterhouse) and since my investment is below $15,000, I pay fees of $25 plus HST quarterly.
In your article, does it mean that if I opted to open the E-series through the branch (i.e. converting TD Mutual funds to E-series), I wouldn’t pay those fees even though my investment is below $15,000?
Thanks.
@Joanne: Yes, there are no monthly account fees when you open through the branch and there is also no minimum account balance.
Thanks so much for replying to my query.
Set up a direct deposit of at least $100 per month and the account fees will be waived
I have been a client with TD for over 30 years and but I have to say you hit the nail on the head with respect to lack of knowledge and difficulty in opening a TFSA there, it seems bricks and motor located talent is a thing of the past. After weeks of no traction I opened a TFSA online at QT in a few days.
@Ben: Thanks for sharing!
Hi,
Thanks for sharing the information. It is quite useful.
I am a bit confused with the CLB grant component. Read in another blog that one needs to open up another RESP account (that invests only in GIC) with TD to get the CLB grant. The usual TD RESP account accepts only CESG grant and not CLB. Please suggest.
@Neeraj: Yes, you will need to open a GIC RESP account that can take the CLB payments. I answered a similar question in the comments section of the post below:
https://www.savvynewcanadians.com/sample-td-e-series-portfolio-updated-2018/
Thanks for the revert.
I opened up the 2 accounts (MF RESP & GIC RESP) with TD Mutual fund yesterday. The bank rep also helped me with the e-series conversion form.
Since I do not have any other relationship with TD, i currently do not have an online access to my accounts. I believe this will be set up with the e-series conversion as the form did ask for that option.
My question is, will the online login being set up by them will give access only to the MF account or both MF & GIC? I did ask the bank rep but he had no clear answer.
Please suggest.
@Neeraj:
Congrats on setting up your accounts.:)
You should receive instructions on how to access your online banking in a little bit and I believe you will be able to see both of your accounts on there (e-Series funds and GIC).
If I were you I would follow up with them in 1-2 weeks if you have not heard back.
HI,
Thanks for the article.
13 weeks is a long time! wow…
I already have TD direct investing (WebBroker). I currently have Cash/Registered and TFSA plans set up. Any idea how to set up a PPP for the e-series mutual funds within these plans?
@ Yann:
Unfortunately, I have personally never used the TD WebBroker interface. However, if its anything like the Easy Web platform, the answer in this link may be useful:
http://td.intelliresponse.com/tdvisa/index.jsp?requestType=NormalRequest&source=2&id=455&uuid=aac7893b-5424-11e9-acf4-37679dddc101&question=How+do+I+modify+a+Pre-Authorized+Purchase+plan+for+my+Mutual+Funds
Cheers.
Hi,
Thanks for the article. 13 weeks is a very long time! I already have TD direct investing (webbroker) set up. Any idea how to set up a PPP to purchase the index mutual funds if I have the platform already? I have cash/TFSA and RRSP accounts currently.