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Email this11:31 am
Ally has some very strange policies, completely different from all other banks! Watch out for these!
Here is what they told me:
You can have a Tax Free GIC have interest paid out to a TaxFree HISA, or roll over with principal plus interest, BUT this interest payout to another account will count towards your TFSA contribution room!!!
This is very strange, as this defeats the whole purpose of a TFSA. The whole point of an investment within a tfsa is that the tax-free interest earned can be reinvested without counting as a withdrawal or new contribution, since such funds are only being transferred within a tfsa, it is not new money entering the tfsa.
It makes no sense but if reinvested interest from a TFGIC counts as a new contribution, then by the same token why wouldn't interest paid out in the first place count as a withdrawal? This is not the case at any other bank.
This also means when your TFSA-GIC matures you can not simply add another 5K to it that year and reinvest it in another TFSA-GIC. You will need to start 2 seperate GICs since an interest payout will count towards contribution room.
Also, beware that if you are saving for retirement at Ally and ever plan to retire outside Canada, Ally will CLOSE YOUR ACCOUNTS the moment you become a non-resident! Makes no sense why this would make any difference for them. Bizarre!
3:30 pm
That doesn't seem right to me too. They also wrong about GIC T5 slip. They issue it at end of the year it is opened. It supposed to be issued 1 year after opening. I always use it to defer the tax to 1 year later.
6:39 am
Ally told me that even if I maintained my Canadian residency and completed a Canadian tax return they would close the account if I was out of country for more than 180 days.
7:02 pm
December 12, 2009
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Regarding the non-residency issue, I believe this to be standard for all financial institutions. By being out of the country for more than six months, the CRA considers you a non-resident of Canada for income tax purposes and since RRSPs and TFSAs are limited to residents of Canada for income tax purposes, it makes sense.
With regard to the other issue, that sounds bogus. I'd question them on it. At HSBC, interest paid in a TFSA is posted as the "TFSA TRANSFER" flag instead of a "TFSA CONTRIBUTION" flag thereby not eating into your TFSA contribution room per year.
Hope that helps! 🙂
Cheers,
Doug
10:28 pm
Doug said:
Regarding the non-residency issue, I believe this to be standard for all financial institutions. By being out of the country for more than six months, the CRA considers you a non-resident of Canada for income tax purposes and since RRSPs and TFSAs are limited to residents of Canada for income tax purposes, it makes sense.
With regard to the other issue, that sounds bogus. I'd question them on it. At HSBC, interest paid in a TFSA is posted as the "TFSA TRANSFER" flag instead of a "TFSA CONTRIBUTION" flag thereby not eating into your TFSA contribution room per year.
Hope that helps! 🙂
Cheers,
Doug
After I had decided to NOT deal with Ally for other reasons, I did a review with a lot of the CU's in Winnipeg. People I know just love Steinbach Credit Union and here is what they said to me in an email. Although I did not invest with them...I did with AcceleRate and Outlook Financial.
Thank you for your email. No, you do not have to live in Manitoba to be a member at Steinbach Credit Union. We have members located all over the world. If you are interested in opening up a membership by mail, we have attached the appropriate forms and instructions to do so.
ps. I still feel that Ally is not the place to invest.
2:08 pm
guest999 said:
Also, beware that if you are saving for retirement at Ally and ever plan to retire outside Canada, Ally will CLOSE YOUR ACCOUNTS the moment you become a non-resident! Makes no sense why this would make any difference for them. Bizarre!
Don't tell them, and they'll never know. As long as you maintain a mailing address and phone number in Canada (perhaps a friend or family member who isn't retiring abroad), that should be fine.
1:23 pm
November 8, 2009
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there are thousands of people who are out of country for very long periods of time and keep an address here with no problem. I knew a teacher who retired early and lived on his sailboat in the caribbean for years. He would return for medical appointments and special events but finally came home after his health started to decline. There are loads of "paper only" canadians.
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