Rush to renew | Page 2 | EQ Bank | Discussion forum

smayer97 said
I do understand CDIC coverage well. I was only asking about the mechanics of getting the TFSA GIC as over the last few days opened up and maxed the TFSA accounts for both myself and my wife and was wondering if to get the TFSA GIC was within the existing TFSA or not. If not, then it would mean losing the opportunity since we have used up our contribution room.  

A TFSA GIC funded from the HISA TFSA is never a contribution. That’s why I always make contributions to my HISA TFSA and then any TFSA GICs that I want must be funded from the HISA TFSA. It makes things very easy to keep track of contributions that way. Similarly you should only withdraw TFSA money to a non-registered account out of the HISA TFSA. TFSA GICs that are funded from the HISA TFSA are automatically matured back to the HISA TFSA.

EDIT: This is within the same FI only.

smayer97 said
Yes, after playing around with the site I see that I can fund a TFSA GIC from WITHIN the TFSA, which works for me at this point.

Still curious for my information, is it possible to buy a TFSA GIC without having a TFSA account? I see on the EQ site them saying "you’ll need to open a Savings Plus Account first". Unclear how that would work and seems misleading and incomplete at best.  

I would never bother to try, but if you could, that TFSA GIC would then be a contribution. I’m sure you most likely can’t because you need to have a TFSA umbrella number for reporting purposes and GICs aren’t permanent entities, so how would they report the contribution, I suppose your first TFSA GIC could initiate that roll number for all future TFSA GICs, but as I was pointing out, without the HISA TFSA, where are your TFSA GICs maturing to? To the regular non-registered HISA! That’s a withdrawal then and not very convenient.

smayer97 said
Yes, that is a good point about the TFSA GIC initated outside a TFSA to keep in mind.

I'm still curious about the mechanics. Since I have no funds and no contribution room I cannot play around with this to figure it out.  

Well, there is no option to open a TFSA GIC without having the HISA TFSA created first. You can only access TFSA GIC buying after you have the HISA TFSA created. You are allowed to purchase a TFSA GIC at that point and yes you can fund that TFSA GIC from the regular non-registered savings and make it a contribution. I wouldn’t even allow the option to fund it from anything but the TFSA HISA, but it is there as an option.

@rodeworthy I thank you for taking the time for breaking it down. And it may help someone else but I am not that uninitiated. My issue is with the way EQ presents the option to buy a TFSA GIC stating that you need a Savings account first and nothing more is indicated. So their messaging is very unclear raising all kinds of questions.

As I stated, for now with our funds already in a TFSA, the mechanics are simple and straightforward, now that I have looked at it more closely (with guidance from here) BUT that is NOT because of how EQ presents the offer.

So, that still leaves questions about whether or not it is somehow possible to buy a TFSA GIC via some other mechanism and what how that all works out and plays out (whether optimal or not, as Vatox has pointed out).

You definitely want to have a TFSA Savings Account, so you can specify a successor holder or beneficiary. That way, when the TFSA GICs mature, the proceeds will go to the Savings Account, whether or not you are alive. It doesn't make sense to specify the successor holder or beneficiary to a GIC.

Alexandra said

I agree. Although with Oaken I notice on all my TFSA & RRIF GIC's, each individual one lists my daughter as beneficiary.  

Oaken doesn't offer registered savings accounts, so this is the only way it could be dealt with. With Oaken, either you renew, transfer, or die!

Note, however, that income in the account after date of death is taxable if beneficiary is not a spouse. I don't know if it remains in the TFSA or not prior to disbursement.

Ya, the only one that can continue to take advantage of the RRSP/RRIF/TFSA upon death of the contributor is a spouse. Maybe disabled children/relatives that were dependents...?

Otherwise, children or grandchildren or any beneficiary that isn't a spouse, will have to pay income tax on the interest earned after the date of death presumably. The amount up until death would still be tax free. Once Oaken gets all the appropriate paperwork from the executor, I would imagine the funds would go into a regular savings account. Who knows. But if one was interested, they could just phone the bank and ask.

I may be wrong....just makes common sense to me.

Rick said

EQ also doesn't offer the ability to roll over their GICs. Funds are automatically deposited to your savings account at maturity. I have a TFSA savings account there, but it's empty as all the funds are in their GICs right now. Not really a hardship to keep it open.  

That's ⬆ what I prefer, and one of the reasons I like EQ. If you do want to 'roll over', just go into your EQ SA at maturity date and invest in another GIC.

Hubert does the Exact Opposite ... their GIC's are automatically rolled over (renewed) weather you want, or not. To block the roll over, you have to call in and have a 'conversation' with them.

Other FI's (like Oaken) are more advanced ... you can set and change maturity instructions yourself, online.

It's a real 'Mixed Bag' out there ❗

Dean

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To each their own, I guess.

Although I'm in the process of diminishing my exposures, I also have dealings with the likes of Hubert and two other backwoods FI's.. But I much prefer to deal with the more advanced FI's like Oaken, where I can (as an example) set and change GIC maturity instructions myself, online.

EQ may not be quite as advanced, but since they upped their game last year (TFSA's, RRSP's, etc.), they've been on my 'Top Drawer' Short List ever since.

Dean