For the past several weeks, the local branch where I do my banking has been plastered with signs in bright colors and bold type reminding the public that the Feb. 29 deadline is fast approaching for tax-free contributions to registered retirement savings plans.

The RSP Countdown sign was really striking. There was no missing this one - a stand-up floor model about eight feet high and parked right at the end of the row of wickets where the customers transact their business.

It even came with a countdown clock that measured days and weeks, as opposed to minutes and hours, and each morning a bank employee manually advanced a pointer to signify the passage of precious time.

Such are the promotional antics of the banks and other financial institutions at this time of year.

All are trying to convince Canadians to invest their savings in guaranteed investment certificates or any of a splendid array of mutual funds, all of which are said to produce very good returns.

In previous years, some of the banks have even offered extended hours in the final days. This time around, that likely won't be necessary.

Canadians have acquired a bad case of the jitters due to the sub-prime mortgage mess in the United States and the resulting fallout on financial markets. Investors have been selling off stocks on exchanges around the world. Prices have fallen and wealth has evaporated.

The experts are mostly saying that this country's economy is strong enough to weather the storm. They point to Canada's low unemployment rate. They say inflation is under control. Interest rates are stable and likely to fall. Government balance sheets are in good order. The resource-based economies of the West are booming. What could go wrong?

Most of us are hoping they are right, but a lot of ordinary Canadians are fearful of a recession. This isn't the type of thing that shows up in public opinion polls. But it is plain to see when you look at investment decisions.

Earlier this month, the Investment Funds Institute of Canada (IFIC) released its preliminary data on mutual fund sales for January.

They show that the total value of funds held by Canadians declined from $697.3 billion in December to somewhere between $668.5 billion and $673.5 billion - a drop of nearly $25 to $30 billion.

Two things happened to cause what amounts to significant losses, on paper at any rate.

First, equity-based funds fell in value as stock prices dropped. Second, Canadians were selling their mutual funds and putting their money elsewhere.

"The numbers look pretty ugly," says Rudy Luukko, investment funds editor with Morningstar Canada, a Toronto-based research firm that tracks and analyses the performance of mutual funds - no easy task since there are about 2,000 of them out there. "Sales of long-term funds have virtually dried up."

That is the most significant trend in the IFIC data. Long-term funds are meant to be bought and held. They are made up entirely of stocks, or a mix of stocks, bonds and cash, the latter being balanced funds.

In January, the total value of long-term funds fell by more than $4 billion while the value of money market funds increased by $4 billion.

What appears to be happening, according to Luukko, is that Canadians were moving money out of equity-based funds due to the volatility on the stock exchanges and into much safer, but lower-yielding investments.

The same trend was evident in December, according to IFIC. Sales of long-term funds amounted to $356 million, compared with $2.5 billion in December 2006. Investors put $2.6 billion into short-term funds in the final month of 2007, versus $683 million one year earlier.

Over the past year, median returns on Canadian money market funds was 3.6 per cent, Luukko says, and the compound annual return over the past five years was 2.6 per cent. Factor in management fees and inflation and investors might just as well put their money in a sock and find a good place to hide it.

"Money market funds are a parking spot, a safe haven for people who are adopting a wait-and-see attitude," Luukko says. "Or they'll decide to do something else with the money."

Chances are, though, they won't be lining up at the last minute to make that RRSP contribution, despite the best efforts of the banks.

(D'Arcy Jenish can be reached at jenish@businessedge.ca)