TFSA Transfer Fees when Funds are over CDIC Limit | Tax Free Savings Accounts | Discussion forum

My thoughts are don't worry about it. People put far too much thought into CDIC limits. If any of these GIC's are with remotely reputable institutions I wouldn't give it another thought.
If things ever get so bad that Canadian banks etc are defaulting, insurance would be the least of your worries. Your dollar at that point would be borderline worthless so whether you have a million dollars or a hundred dollars would be of little concern. At that point hard assets like gold, food, land, and most of all and guns and ammo should be where you were invested...LOL.

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I have Never had a problem with the 'December TFSA Shuffle', and I usually complete it within two weeks or less . . .

'Out' of the old TFSA Account during the last week of December ... and
then 'In' to the new TFSA Account during the first week in January.

Why would it take so long (~ 2 months), as described in Post #1 ❓❗

Dean

To not worry about CDIC if that matters to you, just stick to the too big to fail names, aka big5 for those registered accounts.

Almost all provinces offer unlimited insurance on registered plans through credit unions.

Alternataively, move it to Oaken, which consists of two CDIC-insured outfits - HOme Bank and HOme Trust. You can divide between the two and each is CDIC insured. That will last you a few more years. They currently have no transfer out fee.

Transfers don't necessarily take two months

Wait a minute - didn't for interest sake say:

Now that my TFSA is over CDIC's insurance limit, I dread having to split it, pay a transfer fee, then wait the 6-8 week processing time for transferring a portion to another FI, which won't even guarantee their current rate. Last time I moved it (for a better rate), I started the process in early December. It wasn't completed until Feb. 1. (So much for future December withdrawals to avoid the transfer fee.)

Was that a transfer (fee+delay) or a withdrawal and redeposit?

Transfers have a fee and often delays. Withdrawals should be pretty straightforward and with minimal delay.

When Tangerine took weeks to transfer a TFSA and missed the year-end, PT was happy to backdate the receipt a few days. On the other hand, for the rest of the GIC's life PT complained that I'd made their life hard by making them work during the holidays!

I think ignoring CDIC limits is reckless.

From the other hand, all this "transferring TFSA challenges" is much ado about nothing.
Take over CDIC limit funds from FI TFSA this year, park them in HISA or 1yr non-registered GIC, move back to TFSA at different FI next year.

Even if you withdraw funds in January and have to wait 12 months to redeposit them, even with 5% HISA interest rate, even with 50% income tax rate on interest - the monetary loss from moving just excess few thousand dollars and getting taxed on interest income on them is so little its not worth the time and efforts for trying anything else. Surely not for starting the movement and writing letters to Ministry of Finance telling them to do better.

savemoresaveoften said

Alexandre said
I think ignoring CDIC limits is reckless.

There is a difference between ignoring vs understanding and accepting the risk.

Just like people are living in San Fran, tornado alley, etc. They are fully aware of the risk, but accepts the risk.
I will accept the risk of over the CDIC limits at the big5, over living at the mentioned places any day. 🙂  

Yes, saying it is wreckless is a bit extreme. To me, if someone is that concerned with CDIC limints there is no way in heck they'd ever be able to be stomach being invested in any publicly traded stock or any other investment. I've never understood the fascination with CDIC limits....and i guess I never will. It's like it's there, so people can't help but become worried about it even though what it insures carries the least risk of any investment on the planet. But heck I used to ride my bike as a kid without a helmet so I'm kind of a rebel

I agree; FIs should be obligated to complete transfers of unencumbered funds within 30 days max, but, as it stands, there is no time requirement at all, only a sort of guideline which I think is up to six weeks and unenforceable.

They can do it if they want to; they just don't want to. They are not necessarily in any hurry to let go of your money.

The fastest I had was one leaving Oaken; it took less than a week. The slowest was from TDDI, took about 3 months and they couldn't explain why it took so long. Both were in cash. Oaken has free transfers; TDDI charges $150. Go figure!

There is a problem though with short term GICs in registered plans. It makes sense to arrange it so that it comes due late in the year etc., but then you have the same problem all over again in January when you try to reinvest. Best solution may be to look for an odd-month promo offer or make a deal for GIC to mature when you want if you can.

Alexandre said

bobwatford said

Yes, saying it is wreckless is a bit extreme. To me, if someone is that concerned with CDIC limints there is no way in heck they'd ever be able to be stomach being invested in any publicly traded stock or any other investment.

Well, that does mean I am consistent. I do not put my money in equities. I don't need to engage in risky financial behaviour.  

Different strokes for different folks I guess. If I was of that opinion I'd have about 20% of the money / net worth I currently have and wouldn't have been able to semi retire at 45. To make any real money a certain level of well researched, acceptable risk is required. As they say.....no guts no glory