TFSA Account Offerings & Questions

[westinvest]

I don't think it's regulatory if you already have open accounts at that institution. I just opened TFSA accounts for the wife and me at BMOIL and it was 100% online because we both have bank and BMOIL accounts open.

[Bylo Selhi]

<RANT>

Probably regulatory.

Not regulatory. TDW's compliance department is populated by a bunch of moronic assholes on a power trip who justify their existence by the hoops they make customers go through.

And before you say FINTRAC, go read their requirements. I did a few days ago. Turns out that if you already have a relationship with an institution or with any of its affiliates you don't need to get new photocopies of driver's license and such.

In any case, why is it that I can open a TFSA with ING, where I am already a customer, online and without any new documentation, but when I want to make changes to an existing TDW account the moronic compliance assholes want yet another copy of my driver's license even though I already gave them a copy not more than 3 months ago?

They're totally out of control. Ed Clark should fire the lot.
</RANT>

[wallpaper]

Im noticing TD Waterhouse has a clause in this application regarding a:

"partial withdrawl fee for the second and subsequent withdrawls made from the plan during the contribution year"

So if Im reading this correctly, youre allowed 1 free withdraw per year?

From the information you guys have collected, is this charge typical for most TSFA at other instiutions?

I noticed on the PC website they make no mention of fees whatsoever...

[kcowan]

<RANT>

Probably regulatory.

Not regulatory. TDW's compliance department is populated by a bunch of moronic assholes on a power trip who justify their existence by the hoops they make customers go through.

And before you say FINTRAC, go read their requirements. I did a few days ago. Turns out that if you already have a relationship with an institution or with any of its affiliates you don't need to get new photocopies of driver's license and such.

In any case, why is it that I can open a TFSA with ING, where I am already a customer, online and without any new documentation, but when I want to make changes to an existing TDW account the moronic compliance assholes want yet another copy of my driver's license even though I already gave them a copy not more than 3 months ago?

They're totally out of control. Ed Clark should fire the lot.

A long time ago, TD (and independently CT) decided to devote nearly all their resources to transaction processing systems and to starve the relationship processing systems of capital investment. RBC and BMO among others were willing to invest in the client acquisition process. TD was not. It seems that they and we are paying the price. They are betting that we will lump it.</RANT>

BTW Ed Clark is a big part of the problem.

[SpikeOPath]

<RANT>

Probably regulatory.

Not regulatory. TDW's compliance department is populated by a bunch of moronic assholes on a power trip who justify their existence by the hoops they make customers go through.

And before you say FINTRAC, go read their requirements. I did a few days ago. Turns out that if you already have a relationship with an institution or with any of its affiliates you don't need to get new photocopies of driver's license and such.

In any case, why is it that I can open a TFSA with ING, where I am already a customer, online and without any new documentation, but when I want to make changes to an existing TDW account the moronic compliance assholes want yet another copy of my driver's license even though I already gave them a copy not more than 3 months ago?

They're totally out of control. Ed Clark should fire the lot.
</RANT>

Wow, I thought I was the only one who thought TDW was full of jerks! On an estate account, BMO Investorline opened it up within weeks of receipt of proof of probate, TDW took over six months and still there were issues with ongoing. Of course, the will was still being "verified" by the TDW estates department (huh? The court's already done this; that's why probate was granted!) while the markets were crashing and there was no way any one, even the estate trustees could get TDW to action any order. Considered suing but don't have the deep pockets.

But a tiny bit of comfort in knowing that TDW's mission appears to piss off rather a large lot of its clientele. PS. Yeah, I can already hear the "if you don't like them, you can move", but it was what the deceased had, and further how do you do this if TDW won't let you action anything (until they "do their thing", which took BMO all of three weeks to do but six months still not enough time?!?)?!? Do you think TDW's going to move the assets just because BMO Investorline tells them to?

[jeebuz]

I just got this message in my RBC online banking:

RBC® Tax-Free Savings Account (TFSA)

Coming January 2009

This registered account is unlike anything Canadian investors have seen before. Capital gains and investment income earned within the account (whether interest or dividends) are not taxed, even when withdrawn.

Here’s what you need to know:


* Eligibility. Available to Canadian residents, 18 years and older, with a Social Insurance Number (in certain provinces and territories, the age of majority is 19).


* Contribution room. Contribute up to $5,000 a year.


* Tax-free compound growth. Contributions to a TFSA are not tax-deductible. However, there is no tax payable on earnings within the plan — even when withdrawn.


* Investment choice. You can hold a wide range of investments in your RBC TFSA, including RBC Funds, RBC GICs and RBC Savings Deposits. You can also make easy automatic contributions on a regular basis using TFSA-Matic™.


* Withdrawals. You can withdraw money from your account at any time (depending on what you invested in); and RBC will not charge a TFSA withdrawal fee. Any withdrawals made in the current calendar year are added to your unused contribution room in the next calendar year. Unused contribution room is carried forward indefinitely.

The interesting bit for me is that there is no withdrawl fee. Even if RBC Direct Investing imposes a withdrawl fee I will be able to avoid paying it by first transferring my funds to a 'regular' RBC TFSA and then withdrawing the funds without a fee.

- Jeebuz -

[queerasmoi]

https://www.credentialdirect.com/WhyCho ... ffers.aspx

In addition to already low fees we’re pleased to offer you the following exclusive offers:
The New Tax-Free Savings Account – Get Yours FREE!
Save the tax, and the account opening fee, on your new Tax-Free Savings Account (TFSA). That’s right. There’s no administration or account opening fee and you’ll save the tax on the interest your investment earns.

Sound good? Beat the rush and open your TFSA now to get a head start on the New Year. Click Apply Now to open your TFSA.

Thank you, thank you, thank you. Credential will be keeping me for the time being.

It says no annual fee, no fee for withdrawal, but $125 fee to transfer out - which is the same fee applied to transfer any account out to any other institution. That fee doesn't really bother me because if any other brokerage tries to woo me, they'll offer to pay that fee.

[marty123]

It says no annual fee, no fee for withdrawal, but $125 fee to transfer out - which is the same fee applied to transfer any account out to any other institution. That fee doesn't really bother me because if any other brokerage tries to woo me, they'll offer to pay that fee.

Many require a $25,000 minimum. Although it may be negotiable, don't count on a brokerage company covering the $125 for the first few years.

[queerasmoi]

That's okay by me too. If the day comes that another broker offers a perfect "woo-package" in terms of everything but the TFSA, I'll transfer everything but, and just do all my new TFSAing at the new broker.

My total including unregistered accounts is still over $25000... for now!

[martingale]

How does the "wait a year" rule work on redepositing a withdrawl? Can you make a withdrawl next december and redeposit it in January? In that case transfers ought not to be a huge concern.

[queerasmoi]

How does the "wait a year" rule work on redepositing a withdrawl? Can you make a withdrawl next december and redeposit it in January? In that case transfers ought not to be a huge concern.

True, except:
Suppose 3 years pass, and I want to move my $15,000 TFSA to a new broker because they woo me with a great deal in November. I attempt to circumvent the $125 fee by moving all my stuff in-kind to unregistered. Then I transfer to the new broker and in January I want to redeposit in-kind.

Problem is, values have changed in the intervening time. I risk possibly triggering a small capital gain (which may be worth it depending how small), and I also risk receiving taxable distributions. Wouldn't it suck to be stuck with the year-end taxable distributions on an ETF or mutual fund because I was playing contribution hockey? That'd kinda ruin the whole TFSA experience.

[Donut]

I talked to TDW this morning. They tell me I can open a discount brokerage account for my TFSA which will be registered and handled just like a self directed RRSP acct. Except:

There cannot be suvivor benefits or a designated beneficiary - it becomes part of your estate.

There is a $50 annual fee but that will be waived if: You have more than $100k in another acct or, if you agree to take statements electronically.

I talked to CIBC and to Investor's Edge this morning:
Edge say they have made no plans for TFSA accounts at this time but expect to roll out a plan by mid 2009.
CIBC are set up and ready to go. You can open a plan there now with a short term note due Dec 31 paying 5% interest. On Jan 1 it goes into a savings account or CIBC GIC or other instrument issued by CIBC. They told me there are no fees. (just a lousy savings interest rate)

Like most of you we plan to just keep adding our $500 (plus inflation index) every year and leave it to be cashed by our estate. We would like to put it (along with our RRSPs) at Investor's but they are not in the game yet. Looks like we will have to put it at TDW along with our investment account.

For the few dollars involved in year one it would not be a burden to take a CIBC TFSA account and transfer to Edge in a few months but, we have no idea what Edge's rules will be when they finally wake up. We can withdraw from CIBC at no charge but we then could not re-invest the money till 2010.

[steves]

keep adding our $500

You mean $5000, right?

[Donut]

RIGHT !

[Bylo Selhi]

Don't let your enthusiasm for the new tax-free savings account overwhelm your natural and certainly justifiable wariness about fees charged on financial products...

Go on out and get a TFSA, by all means. Sign up now, avoid the rush. And don't forget to ask about fees because while the TFSA is most certainly tax-free, it's not always fee-free...

The TFSA fee-free zone ends when you move up from a bank to its discount or full-service brokerage divisions, where you'll have access to a much greater selection of investments...

Among the discount brokers that are not planning to charge TFSA admin fees are RBC Direct Investing, ScotiaMcLeod Direct Investing and HSBC InvestDirect...

[Blonde Bond]

Don't let your enthusiasm for the new tax-free savings account overwhelm your natural and certainly justifiable wariness about fees charged on financial products...

Go on out and get a TFSA, by all means. Sign up now, avoid the rush. And don't forget to ask about fees because while the TFSA is most certainly tax-free, it's not always fee-free...

The TFSA fee-free zone ends when you move up from a bank to its discount or full-service brokerage divisions, where you'll have access to a much greater selection of investments...

Among the discount brokers that are not planning to charge TFSA admin fees are RBC Direct Investing, ScotiaMcLeod Direct Investing and HSBC InvestDirect...

I opened my TFSA last week with BMO Investorline - although they obviously won't allow any transactions until January. They don't charge any fees if you have a minimum of $100,000 total in your Investorline accounts. This amount can be spread out over RRSP, LIRA, non reg, TFSA, etc.

[Darrell Greenwood]

Except:

There cannot be suvivor benefits or a designated beneficiary - it becomes part of your estate.

Interesting. From the Budget 2008 documents

Contributions to a spouse’s TFSA will be allowed and TFSA assets can be transferred to a spouse upon death.

Cheers,

Darrell

[queerasmoi]

To a spouse, amplifying their TFSA?

Or to a spouse, exiting the tax shelter at the time of death?

[cardhu]

Interesting. From the Budget 2008 documents

Terminology ... the TFSA legislation doesn’t use the terms “survivor benefits” or “designated beneficiary” … but the TFSA clearly can be rolled over to a surviving spouse … it is treated as an “exempt contribution” to the survivor’s own TFSA, though it may have to pass through the estate to get there.

To a spouse, amplifying their TFSA?

Yes.

[Taggart]

I'm looking for a financial institution that not only has high interest rates for their TFSA offering, but also specifically says on their website, words to the effect, that there will be no fee charged if a person decides to transfer the TFSA to another bank at any time in future. Has anyone seen one? I've seen on-line banks that mention no withdrawal fees, but nothing about "transfers" (or maybe that's a dirty word).

[Bylo Selhi]

I'm looking for a financial institution that not only has high interest rates for their TFSA offering, but also specifically says on their website, words to the effect, that there will be no fee charged if a person decides to transfer the TFSA to another bank at any time in future. Has anyone seen one?

From Carrick's piece linked upthread,

Mr. Aceto said ING's decision not to charge fees on its TFSA was an easy one because of the company's policy of having no fees on other products, such as its high-interest savings account. “We decided that yes, there's a little extra work for us to do with tax-free accounts, but we're not passing those fees along to customers,” he said.

Dunno if that's clear enough but they've never charged me anything for transferring money to/from their accounts.

Not only that but they'll pay you double interest for December if you open the TFSA now.

[WishingWealth]

I also did the ING/TFSA thing.
Just 'lines of interest', no fee lines showing on the statement.
Every dollar is working [somewhat] hard.

WW

[Darrell Greenwood]

In a nutshell apparently you can name a beneficiary of a TFSA in BC. Now I just have to convince TD of that fact

Cheers,

Darrell

From National Post

Estate-planning experts are excited that TFSA proceeds flow taxfree into the hands of the surviving spouse, provided he or she has been named "successor holder" on the original application form. A successor holder can only be a spouse or a common-law partner, says Wilmot George, specialist, tax and estate planning for Mackenzie Financial Corp. "On the death of the original TFSA holder, your spouse or common-law partner will take over your plan. The spouse simply steps into the plan. It's the simplest way to transfer assets and has no tax implications. The plan continues to be taxfree and away you go."

<snip>

Jamie Golombek, CIBC's managing director of tax and estate planning, says it may be possible to name a beneficiary on a TFSA to avoid having TFSA funds flow through the estate and be subject to probate taxes in some provinces. To date, provincial laws have not been amended to allow beneficiaries to be named on TFSA accounts (Nova Scotia is the first to introduce legislation permitting beneficiary designations; similar legislation was recently introduced in British Columbia).

Dear Jonathan,
Re. Last in a four-part series on TFSA
You have established very clearly that a surviving spouse, named "successor holder" on the original application form,simply steps into the plan. Great!
What I'm not so clear on is, can then the surviving spouse name a child their beneficiary on the TFSA to avoid the funds flow through the estate and being subject to probate taxes? I DO LIVE IN B.C. Can you please tell me,as mentioned in your article, does the 'introduce legislation in British Columbia' mean it is now in provincial law that beneficiaries other than spouses can be named on TFSA. OR just working its way through the system.

<snip>

On the latter query, CIBC's Jamie Golombek responded: " It appears that the Economic Incentive and Stabilization Statutes Amendment Act, 2008 became law on Thursday Nov 27th…It contained the TFSA beneficiary provision." Link here.

[Taggart]

I'm looking for a financial institution that not only has high interest rates for their TFSA offering, but also specifically says on their website, words to the effect, that there will be no fee charged if a person decides to transfer the TFSA to another bank at any time in future. Has anyone seen one?

From Carrick's piece linked upthread,

Mr. Aceto said ING's decision not to charge fees on its TFSA was an easy one because of the company's policy of having no fees on other products, such as its high-interest savings account. “We decided that yes, there's a little extra work for us to do with tax-free accounts, but we're not passing those fees along to customers,” he said.

Dunno if that's clear enough but they've never charged me anything for transferring money to/from their accounts.

Not only that but they'll pay you double interest for December if you open the TFSA now.

I dunno. I noticed since I posted the above that someone on another website said they phoned a couple of ING customer service reps. at different times of the day, and neither could confirm whether or not there would be a fee by ING if they were requested to transfer the TFSA to another financial institution.

Another possibility is PC Financial who are quoting an interest savings rate of 3.75% (subject to change without notice).

[twa2w]

Beneficiary information on a TFSA is apparently under provincial domain. I was informed today that once all the provinces get their requirements straightened out then the Banks will set taht up but the banks likely won't do it one province at a time.
And my understanding is the beneficiary deal will not be a rollover to the beneficiary's TFSA but a payout of the proceeds directly to the beneficiary - nothing official of course

Cheers
J