People's Trust TFSA Transfer Out Time | Tax Free Savings Accounts | Discussion forum

My experience was initiated from Questrade. QT received the request in advance of the PT maturity date but QT was excessively slow to get off the mark and send to PT. Once PT received the request was after the Maturity date they were very prompt to send the transaction to QT. Point of caution with PT ... if you are coming out of a GIC, tell PT on maturity to move the $$$ to a Daily TFSA Savings account. This way you get some interest until the $$$ exit PT. Otherwise PT auto renews at today's rates for the same Term as the former GIC. ie if a 5 year GIC at the 5 year current rate. Failure to advise PT you get ZERO interest until the $$$ exit to your new TFSA institution. My experience with QT Transfers Department ... they Suck!!! They have screwed up 5 out of 6 requests to move my TFSA from another institution.

agilo said
I know people's trust doesn't charge to transfer out a TFSA account to another institution. Has anyone tried this and how long did the process take?  

I am thinking of moving a TFSA GIC out of Peoples Trust on maturity in January.

Do FI's charge for transferring out and is Peoples Trust the exception (according to the comment of the original poster).

What other fees and/or pitfalls for which do I need to be vigilant, in moving TFSA GIC's?

The Cannex List for TFSA GIC's currently lists several FI's with a rate of 2.25% (one year). Any insights into any of these prospects for ease of transactions, fees, obstacles?

Stephen

Bill said
Maybe I'm doing it wrong but I never transfer a HISA TFSA account anywhere, just leave it open.   

Bill,

According to the rules:

If you withdraw the funds yourself and contribute the same funds to another TFSA, this transaction would not be considered a direct transfer and could have tax consequences.

In this situation, the funds will be treated as a regular contribution which will reduce your TFSA contribution room for the year. If you do not have sufficient contribution room, you will have over-contributed to your TFSA and will be subject to a 1% tax on the highest excess amount in the month, for each month that the excess remains in the account.

In my case, I'm dealing with a TFSA GIC maturing in January.

What I am considering is have the GIC proceeds deposited in the savings account at Peoples Trust, then shop around for the best option at that time.

I would like to get insights about the TFSA policies of other potential high interest FI's like Accelerate, Hubert that might affect me in the future, if I transfer into one of them.

Stephen

In answer to Stephen's actual question, Hubert also does not charge for a transfer-out, but most FIs do charge. Some receiving FIs, probably most, will reimburse this fee if the amount if big enough to justify it in their eyes. I've seen them do it for as little as 17K, but you have to ask.

There is speculation about another interest rise in mid-year next year, but if you are only looking at a one-year GIC, I'm not sure you'd want to wait for another rate change. Why not just move it in January to wherever in the first place?

That said, if you are the sort of person who likes to let their GICs go dormant for a bit after they come due, while you shop around, you should only consider transferring to FIs which offer a TFSA Savings account. Not all offer this. Some offer only GICs (e.g.Oaken).

I think that, if it were me, I might transfer direct to Hubert, wait in savings until March to put in one-year GIC at Hubert. In December, after 3 quarters, you can take the interest to date and reinvest it either in a new GIC at Hubert starting in December , which will put you back on track with Bill's scheme when it matures in December, or cash it and wait for January rates for new deposit, or transfer direct somewhere else.

Nehpets said

Do FI's charge for transferring out and is Peoples Trust the exception (according to the comment of the original poster).

What other fees and/or pitfalls for which do I need to be vigilant, in moving TFSA GIC's?

Hi Stephen,

My experience with a couple of FIs has been that they are willing to cover TFSA and RRSP transfer out costs, provided that:

1. The client asks for this in advance. It's not automatic -- presumably because some (many?) clients don't even realize that it's an option for this fee to be covered -- and their FI isn't going to lean forward and tell them (IMO, the few thousand they save a year this way is a fraction of the profitable goodwill they'd generate if they were proactive about this -- but they don't care what I think).

2. To get the reimbursement ($50 or whatever), you have to show the FI a statement from your other FI (the one that transferred-out the funds), showing that the fee was charged.

The irritating thing about this, is that some CUs -- like Meridian, for example -- only issue quarterly statements. So if you do something like this is January, you have to wait until about mid-April before the statement showing the fee arrives.

Also, I would highly recommend that you follow-up to confirm that the fee was, in fact, reimbursed. I don't at all think there's any systematic attempt to avoid paying this out, but my experience has been that it's not a priority.

Plus -- getting back to People's Trust -- if you're planning on transferring funds that are currently in a term deposit, a rep there told me not to send the transfer out request more than 30 days before the deposit matures, since they just put those off to the side and don't put them at the front of the line.

Good luck