When TFSA GIC mature, what will happen? | Tax Free Savings Accounts | Discussion forum

vincent said
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My first thought is simple:
1. create an external link to TFSA to another bank (say bank B). This is NOT GIC account
2. give order to oaken (say bank A) to transfer the TFSA GIC balance to the external TFSA account when mature
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However, after looking some posting I am not sure whether this is possible.…

Unfortunately, that is not possible with registered accounts, like TFSA's, right now.

There's documentation the receiving financial institution needs to send to the relinquishing financial institution to request the transfer.

I think the best approach would be to arrange a direct transfer from your TFSA when the GIC matures, to another financial institution where you would like the money to go.

You will have to fill out some paperwork to ensure this is a direct transfer under the CRA rules, rather than a deregistration of your TFSA. If the latter, you will have to wait until January to recontribute this amount.

If you do this transfer under the CRA rules, then the FI giving up the money may charge a fee for the transfer. The new institution may agree to reimburse this fee. You will have to check with both FIs to see what their rules are.

Of course, you could just reinvest the money at the existing FI.

vincent said

So for some banks (guess tangerine) there are both TFSA GIC account and TFSA saving account (no term). My understanding is that when creating a new TFSA GIC, we can always order the bank to move money from TFSA GIC to TFSA saving account when GIC mature. Is this correct?

This is correct. Same works for RRSP GIC with Tangerine.

To be more specific, when creating a new TFSA (RRSP) GIC, Tangerine asks what to do when it matures and what to do with interest payments. I always select both go back to TFSA (RRSP) Savings, to avoid complications with CRA.

Then, I have as much time as I need, to decide what to do with money held in TFSA (RRSP) Savings account.

One of the things I like about Tangerine.

I have a few TFSA GIC's with Tangerine. Also have a daily interest TFSA with them.
Usually when a GIC comes due, I will have them put it in my TFSA DISA. This way, say if you are going to purchase a new years TFSA GIC you can put the funds in the DISA where the other funds are, combine the two and purchase a single GIC. You may feel the rates are going to go up in a few days so you can just let it sit until you repurchase. Or, not that I have done it, if you are going to transfer to another bank, it pretty well has to go out of the DISA.

vincent said
Well it is a bit more complicated than I thought.

So for some banks (guess tangerine) there are both TFSA GIC account and TFSA saving account (no term). My understanding is that when creating a new TFSA GIC, we can always order the bank to move money from TFSA GIC to TFSA saving account when GIC mature. Is this correct?

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Some TFSA issuers will set up the GIC's and the savings account to be separate TFSA accounts and do the direct transfers internally between them.

Others will set up one TFSA account that has a savings account part and GIC's. In such cases, there are no actual transfers. Money either sits in the savings account part or is invested in a GIC, all within a single TFSA.

LeBronBMT said

Are you saying it's not possible to link TFSA accounts to make transfers or something else?

That's correct. It is not possible to link TFSA accounts to make what are considered to be direct transfers between them.

Scotia iTRADE allows their registered accounts to receive bill payments. However, those payments are considered to be new contributions to the receiving RRSP or TFSA.

Alterna Bank allows one to link an external account with their TFSA or RRSP accounts. One may then make new contributions by pulling funds from the external account.

This is easy. I did (and reverted back) this just last week with Oaken.
Depends on where you are moving the money, mine was Tangerine, open a TFSA or RRSP account there. Fill out the application to tell them where the new account will be funded from, digital sign, Done.

Alexandra said
I have a few TFSA GIC's with Tangerine. Also have a daily interest TFSA with them.
Usually when a GIC comes due, I will have them put it in my TFSA DISA. This way, say if you are going to purchase a new years TFSA GIC you can put the funds in the DISA where the other funds are, combine the two and purchase a single GIC. You may feel the rates are going to go up in a few days so you can just let it sit until you repurchase. Or, not that I have done it, if you are going to transfer to another bank, it pretty well has to go out of the DISA.  

What is DISA in Tangerine? I also have TFSA which I opened just this April, back then they were offering new accounts 2.8% until Sept in the normal savings account while TFSA GICs were like 2.3%. So I just left it in a normal TFSA savings account but now with the new Corona situation, their GICs are below 2% I think. I feel like I should have put the TFSA in the GIC back then 🙂

$50. Probably plus HST. Depends on your investment mix. Maybe better to take the money out when it is available and transfer it where you want. Before 2001 there was no fee to transfer RRSP with a T2033. Not sure when FI's started charging fees on transfers since I had consolidated by then. Some FI waved the $125 transfer fee on large transfers before 2016. Not anymore.