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Email this11:59 pm
May 15, 2007
Online
I've read that PC Financial will charge a $50 fee to transfer funds from their TFSA to another institution's TFSA. Does anybody know if the other banks charge a similar transfer fee? This is important because if you make an outright withdrawal (free at PC Financial), you have lost your contribution room (if you'd maxed it out already) until the next year. However, if you make a transfer (costly if you are leaving PC Financial), you can continue to earn tax-free interest.
1:03 am
Canada Trust charges also. Same amount I think. Seems like these TFSA's will be major cash cows for the banks just like RRSP's were to the mutual funds industry.
10:19 am
December 12, 2009
Offline
Yes, I believe all banks charge a fee to transfer out all or in part a TFSA. Doing a withdrawal may be free but the downside of that is, no contribution till next year. It's usually around $25 to transfer out a TFSA to another institution.
Therefore, when contemplating a transfer, I would hold off till the last day of the year, then withdrawal the full amount and re-contribute that to your new TFSA on Jan. 1st of the following year, to avoid the fee.
Cheers,
Doug
12:33 pm
I'm a bit lost. According to the web page for PC "You can also transfer funds to the account as a contribution, or from the account as a withdrawal, anytime without penalty."
Looks at first glance like there is no penalty but it really doesn't talk about a fee it talks about a penalty.
So far unlike ING I can't find any info on the interest to expect.
8:34 pm
December 12, 2009
Offline
That's transferring a TFSA to PC Financial. If you're transferring a TFSA out to another institution, all institutions currently charge a "transfer out" fee for processing. It's generally around $25.00, similar to the "transfer out" fee for an RRSP or an RRIF.
Cheers,
Doug
12:34 am
Well that looks good but what does this mean?
"from the account as a withdrawal, anytime without penalty."
1:52 am
May 15, 2007
Online
Selby said:
Well that looks good but what does this mean?
"from the account as a withdrawal, anytime without penalty."
Assuming the following:
"Fee" and "penalty" both mean the same thing.
You have a PC Financial chequing account.
You open a PC Financial TFSA and deposit $5000 from your PC Financial chequing account.
Scenario 1: If you withdraw the $5000 from the TFSA to the chequing account, you are not charged any fee / penalty. You could even withdraw it 100 times in $50 increments without being charged a fee / penalty. However, you have used up your $5000 contribution room and cannot re-deposit the $5000 to the TFSA until next calendar year.
Scenario 2: If you open a TFSA at, say, HSBC, you cannot deposit another $5000 into the HSBC TFSA until next calendar year, since all of your contribution room was used up with your PC Financial TFSA deposit. However, you could transfer the $5000 in the PC Financial TFSA to your HSBC TFSA within the same calendar year, since this does not incur an additional hit to your contribution room. In doing so, though, PC Financial will charge you a fee / penalty of $50.
There are many variations. For example, if you don't have a PC Financial chequing account but open a PC Financial TFSA, you could probably withdraw your money from the TFSA as a cheque without incurring the $50 fee / penalty (although there might be a nominal fee for the cheque).
7:47 am
Just a reminder to all that you can simply approach the institution to which you're transferring your TFSA/RRSP and ask them to cover the cost of the transfer-out fee. If you're transferring enough cash/securities, they'll be receptive. I've done this myself. And yes, I can confirm that PCF's transfer-out fee is currently $50 (up from $25 last year).
10:29 am
December 12, 2009
Offline
There's one hitch with what you said. I don't think PC Financial would issue you cheques on your PC Financial TFSA account, therefore, a cheque withdrawal is not possible. You'd have to transfer to your chequing account then write a cheque drawn on the chequing account.
By writing a cheque, you incur no fee, service charge or penalty but you still don't get that contribution room back until the following year. A cheque is a withdrawal. All debits from your TFSA, no matter their form, are classified as a TFSA withdrawal and thus you can't recontribute until the following year. This is a CRA requirement. As such, to allow you to transfer your TFSA between branches within the same bank or between banks, the banks may charge a "transfer out" fee (as permitted in legislation and similar to the fee charged for "transferring" an entire RRSP between institutions) as there is a special form that needs to be completed and quite a bit of processing & compliance work involved. This allows you to "save face" and retain contribution room.
Cheers,
Doug
12:24 am
im a coast capital customer. and by closing and transferring your tfsa,
you will be charged $55 (according to their brochure). for cibc (from their website) they charge more $100! hahaha watch how all your interest earned just go for the admin/bank fees. you dont even need to bank your money at all because all that interest income goes to the bank. of course if you have $100K or more then banking it is a good idea but i only have more or less 1,000 right now. then deposit maybe $50/month for a year. hello???
now, im actually confused because when i went to coast capital and talked to one of their employee, face to face, she said "when you close it, you dont pay nothing." okay dokay. because the truth is, im going to invest some money of mine for a year then totally withdraw it, all of them, (for tuition or brand new pc maybe).
now ING and canadian tire offers 3.00% and 3.15% respectively for TFSA, sounds good! but i find it hard to bank with them especially that they are in virtual banking like just using online or phone and talking to call center agents.that is a tough transaction. hey anybody who banked with these two last year or 2008 then withdraw all your money? how did it happened? pls share your experiences.
5:38 am
Peter said:
I've read that PC Financial will charge a $50 fee to transfer funds from their TFSA to another institution's TFSA. Does anybody know if the other banks charge a similar transfer fee? This is important because if you make an outright withdrawal (free at PC Financial), you have lost your contribution room (if you'd maxed it out already) until the next year. However, if you make a transfer (costly if you are leaving PC Financial), you can continue to earn tax-free interest.
TD Waterhouse charged me $150 to transfer my funds from my TFSA into another bank's TFSA. $50 is not bad actually!
9:22 pm
Lots of places are free. Therefore, it's always important to find that out up front before you consider contributing there.
5:55 am
Since TFSA are accumulated its possible that you may be able to deposite a lot more than $5000.00 at any time.
Please write your comments in the forum.