My father has a regular RRSP and the bank is not allowing him to cash it out. He was advised repeatedly that unless he dies or can prove that his circumstances have become dire (no food etc.) he cannot cash in his RRSPs until they mature. I am convinced that he is being misled. Can you help me sort this confusing situation out? I have cashed RRSPs in before with no trouble -- have the policies changed?
If the RRSP is indeed a regular RRSP and not a locked-in plan (these plans generally restrict distributions until retirement), it is not the RRSP that is restricting the withdrawal of funds, but the investments held within the plan. The plan may hold non-cashable GICs. These GICs generally provide investors with higher interest rates than their cashable counterparts, but they must be held until maturity. Check with the plan administrator to determine if this is indeed your situation.
To find out how much an RRSP contribution may save you, try Morningstar's RRSP Calculator.
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