Need cash from his RRSP

Question: Could you please answer a question regarding cashing in an RRSP. I’m having a bit of trouble cashing one in. It is locked in until the anniversary date of June 1 every year. I have been laid off from my job for three months and am facing a severe financial crisis right now: disconnection notices, credit cards being suspended, eviction notices etc. I work in construction and am used to these layoffs.

I usually have 1-2 months’ wages put aside to help cover my living expenses during these periods, but was unable to accomplish that this time. I need to cash in an RRSP and my credit union is reluctant to do this until the anniversary date. Even though there is an interest penalty for early withdrawal I need the money now, not two months from now. Can they withhold these funds until the anniversary date?


It really comes down to the nature of the RRSP contract between you and the credit union. It sounds like the money is in a one-year GIC that rolls over annually. If the contract does provide for early withdrawal, then the credit union must honour your request to cash it in and withdraw the money from the plan. If there is no early whdrawal provision, then it is at their discretion. In this case, I suggest you arrange an appointment with the manager of the branch, explain the seriousness of your situation, and ask them to cash in the certificate early – tell them you will pay any reasonable interest rate penalty to do so.

Keep in mind, that you will be taxed on the money when it comes out of the RRSP and a portion will be withheld at source for this purpose.