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Unable to transfer fund out
June 3, 2017
3:48 am
xup6.yc
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I currently have two accounts with Alterna Bank, eSavings and TFSA.
I've been putting all my long-term savings in the TFSA, and recently I'm in need of some money, that's when I've noticed I can't transfer fund out of TFSA.

Here's what I tried:
Transfer -> select TFSA as from account -> When I try to select a to account, it tells me no valid account available

I've contacted alterna thru their form, currently awaiting a response.
Just thought I'd share my experience, I'll update when i receive a reply.

Depending on what they reply, I might consider closing my accounts, I'm not interested in jumping thru hoops every time I want to use my money.

June 3, 2017
4:01 am
Top It Up
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I've never made a withdrawal from my TFSA but I suspect your transferring out "problems" have to do with the fact that TFSAs are registered accounts and may require some paperwork.

June 3, 2017
6:54 am
xup6.yc
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Top It Up said
...TFSAs are registered accounts...  

The TLDR is as Top It Up said.

Since I need the money quite urgently, I've called them up instead of waiting for the email reply.

Turns out, at alterna bank, any withdraw from registered accounts, TFSA and RRSP, can only be done thru calling them directly.
I'm not sure why they have this policy, since I can withdraw from registered accounts online at other banks, I guess they don't want people moving money out?

It does make things complicated and slightly annoying, for example, what if I need money urgently, and it's not their business hour?

For future reference, I'll probably move my emergency funds out of alterna, and treat alterna as a GIC.

June 3, 2017
7:46 am
Top It Up
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xup6.yc said

It does make things complicated and slightly annoying, for example, what if I need money urgently, and it's not their business hour?
  

Well, if I needed URGENT, URGENT cash, and none was available in my traditional accounts OR it was outside of banking hours ... I'd do a cash advance on my credit card and sort it out in the following couple of days, thereby dampening the high interest rates associated with CC cash advances.

June 3, 2017
8:08 am
User230
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xup6.yc said

The TLDR is as Top It Up said.

Since I need the money quite urgently, I've called them up instead of waiting for the email reply.

Turns out, at alterna bank, any withdraw from registered accounts, TFSA and RRSP, can only be done thru calling them directly.
I'm not sure why they have this policy, since I can withdraw from registered accounts online at other banks, I guess they don't want people moving money out?

It does make things complicated and slightly annoying, for example, what if I need money urgently, and it's not their business hour?

For future reference, I'll probably move my emergency funds out of alterna, and treat alterna as a GIC.

*side-note: the funds doesn't get transferred immediately, tho it shows up on Account Activity, the Current Balance doesn't change, you'll have to wait a day(s)?  

Implicity is the same way. Have to phone to get the money out.

June 3, 2017
8:45 am
Cranston
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Outlook Financial you have to download a PDF form (if it will download) fill it in and mail to withdraw TFSA funds. And they will not accept a POA what so ever.

June 3, 2017
9:06 am
AltaRed
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It should be more difficult to transfer funds out of registered accounts. After all, there is extra paperwork involved by the FI to record and transmit that information to CRA for each transaction, and taking funds out of registered accounts should be considered more seriously than just 'any' account.

The extra step of having to phone or even fill out a PDF form seems like the right thing to do to cause pause to the individual to think more seriously about withdrawals. If the OP does not already know, s/he cannot re-contribute the withdrawal amount for that specific contribution space again until the next calendar year.

June 3, 2017
11:05 am
Cranston
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I am sure most TFSA holders are in for the long haul and there are less withdrawals than from a non registered account. The choice of an FI to offer the product and associated costs should be minimal and less if they are fee driven. And if you need the funds it should be without hassle. I disagree with the "paper work" comment as I have found it is all system input taking very little time to execute the request.

June 3, 2017
11:18 am
AltaRed
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Maybe. Do you know how the FI informs and provides the data to the CRA? I am guessing it is probably collected and held until about Feb of the following year and then there is a whole data dump to them for everybody.

Someone still has to maintain that and do the checks and balances to make sure all is well with what is being submitted. My prior experience with databases is that they do not take care of themselves. IOW, it still costs the FI some time and money.

June 3, 2017
11:26 am
Cranston
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From what I understand you maybe correct. Input data that is held till it can be submitted to CRA at the latest date possible.

What ever the FI cost is....I don't care as they are getting it from us one way or another.

I can move TFSA funds from my online brokerage account to a non registered chequing account at a local CU within a minute with out any assistance.

June 3, 2017
12:03 pm
Norman1
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Alterna Bank does not provide online outgoing Me-2-Me transfers for their registered accounts:

Are M2M transfers an option for making contributions to the RRSP and TFSA eSavings Accounts?
Absolutely! M2M transfers are a fast and convenient way of making a contribution to your RRSP and TFSA eSavings account.

Are Outgoing M2M transfers available on the RRSP and TFSA eSavings Accounts?
No, Outgoing M2M transfers are not available on the RRSP and TFSA eSavings accounts.

More limited access to registered accounts is quite common. TFSA and RRSP accounts are actually trust accounts. One doesn't actually have direct control of the accounts. The accounts are in the name of a trustee, in trust for the RRSP annuitant or TFSA holder.

In the case of Alterna Bank, the declarations of trust name Concentra Trust as the trustee. I think someone representing Concentra would have to sign off on the withdrawal.

June 3, 2017
3:46 pm
Loonie
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AltaRed said
Maybe. Do you know how the FI informs and provides the data to the CRA? I am guessing it is probably collected and held until about Feb of the following year and then there is a whole data dump to them for everybody.

Someone still has to maintain that and do the checks and balances to make sure all is well with what is being submitted. My prior experience with databases is that they do not take care of themselves. IOW, it still costs the FI some time and money.  

The necessary reporting is not going to be done until after one has made the withdrawal, so that is not reason to create a delay.

Any time and money involved is part of the cost of doing business. Nobody forces these FIs to offer TFSAs.

As a side note, I cashed out part of an RIF at TD last winter. I was astonished that I could do this over the phone and that it happened instantaneously. Before I hung up from the call, the money had moved to my savings account - and the appropriate tax deduction had already been made. Conclusion: they can make things efficient if they want to and if they put the resources into developing the systems. Alterna and so on probably haven't made that investment. That's OK with me, as I'm not going to be in a hurry and I'd rather they put the money into paying me higher interest!

It would be nice to think that FIs had our best interests at heart and that if we started to take money out of our TFSAs they would take the opportunity to be sure that we understood that we could not recontribute until next year (assuming maxed out), but I'd be amazed if they did. And, besides, who could believe them as they've lied to people over and over again in the past. It would be foolish to take their word for anything as important as CRA rules.
Really, it's our money, our responsibility to know the rules, and their job to give us the money when we want it. If we intended to have it tied up, we would put it in a GIC. All they need to know is that we are who we say we are, and that is already covered by their systems. A phone call does not seem too onerous to me in order to accomplish this. It's too bad Alterna is not available by phone 24/7, but this is a known limitation.

June 3, 2017
8:46 pm
AltaRed
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As you suggest, an FI that pays more interest likely has to cut costs in other areas. Can't have one's cake and eat it too. Don't like it....don't have an account at Alterna. Really is that simple.

My perspective is likely different than many on this site. I put my money in the common equity of FI's, not their products*. Thus I want them motivated to higher earnings and profits for a business model.

*Added: Not quite true. I have circa 3% of my investment portfolio in GICs

June 4, 2017
4:28 pm
Bill
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"And, besides, who could believe them as they've lied to people over and over again in the past." Well, I suppose a general allegation of chronic and long-term lying by "they", who it appears are the (some? most? all?) employees of financial institutions (an FI is not a human so can't lie, so the reference is to people who work there), is something that has its place on a forum that allows adults free expression, but for balance I'd like to offer another view. As far as I know I've never been lied to by an employee of an FI and any acquaintances or family I know who work for FIs don't seem to be habitual liars, as far as I can tell. (Full disclosure: I've never worked for an FI or in the industry.)

June 4, 2017
11:38 pm
Cranston
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Bill said
"And, besides, who could believe them as they've lied to people over and over again in the past." Well, I suppose a general allegation of chronic and long-term lying by "they", who it appears are the (some? most? all?) employees of financial institutions (an FI is not a human so can't lie, so the reference is to people who work there), is something that has its place on a forum that allows adults free expression, but for balance I'd like to offer another view. As far as I know I've never been lied to by an employee of an FI and any acquaintances or family I know who work for FIs don't seem to be habitual liars, as far as I can tell. (Full disclosure: I've never worked for an FI or in the industry.)  

I don't think I'm have been lied to either. But feel that I have spoken to seasoned FI employes that have been subjected to so much training/brainwashing that I have not recieved a "best answer". AND I know I spoken to new hires that are often answering phones and emails as part of their training and have provided incorrect off the cuff responses.

June 5, 2017
7:32 am
Top It Up
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I've never been lied to, but, I have had to deal with some silliness of financial institutions and some incompetence of their employees - the latest one being, a senior supervisor in an FI's CC security section, who was most assuredly 2 pay grades above their competence level, if not 3.

June 6, 2017
12:26 am
Loonie
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It's good to know that some of you don't feel you've been exactly lied to at your bank.

There are numerous examples which have come to the fore, especially in recent years, and most of us have probably been aware of them at one time or another. The most recent are the revelations from almost 1000 bank employees to the media, which were noted earlier in this forum. If you're the sort who thinks the media are not to be trusted, I can't help you there, but, personally, I can't ignore 1000 voices speaking out. I also had occasion to meet one of these ex-employees last year, and the story was the same.

Ever been told a certain mutual fund was a sure thing based on its recent past performance? had no fees? and was ideal for someone like you? Ever been told you've been offered the best mortgage interest rate? Ever found out later that these things were not true?

I was told quite recently that a certain fund had no fees. There is no such thing as a fund which has no fees.

June 6, 2017
6:17 am
Top It Up
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Loonie said

Ever been told a certain mutual fund was a sure thing based on its recent past performance? had no fees? and was ideal for someone like you? Ever been told you've been offered the best mortgage interest rate? Ever found out later that these things were not true?
  

Other than the no fees bit (and since you're talking mutual funds we'd need to hear more details) - so, sorry ... the rest of it is nothing more than salesmanship and hardly qualifies as lying. What in the world ever happened to due diligence.

You can't drive past a bank these days without their electronic sign or large posters in their windows telling you their mortgage rates . pretty darned easy to compare.

June 6, 2017
8:41 am
AltaRed
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There are misrepresentations but not necessarily lies. Some times it is employee ignorance of the facts and/or misinterpretation of the question.

The issue about 'no fees' on mutual funds is one of the most blatant because while it is true there are no direct fees paid by the investor, there are indeed fees paid to the mutual fund managers from the mutual fund itself, e.g. money management fee and the trailer fee, that takes profits away from the investor. That one needs to be corrected, and is partly corrected with the new reporting requirements on disclosure of trailer fees paid (but not fund expenses, nor money management fee).

As Top It Up says, investors don't do their due diligence and the question really is.... how much regulatory oversight should there be to protect someone from themselves? We put safety railings along steep dropoffs to help prevent idiots from falliing over the edge, but should we also put safety nets over the edge in case someone is stupid enough to climb up and over the saftey barrier and fall off? How far do we go to protect people from themselves? I don't know the answer but surely there should be some expectation of people looking out for themselves.

As to the 'lowest' mortgage rate, I don't know anything about that issue since it's been over 25 years since I had a mortgage, but I've heard enough anecdotal evidence to know there are some 'discretionary' rates to be had that are lower than posted rates, e.g. friends and family rates, valuable customer rates, etc. These are not exactly lies, but of course, exceptionally annoying nonetheless.

June 6, 2017
2:48 pm
Loonie
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I consider it a lie when there is a pattern of telling people things that aren't true, regardless of the excuse for doing so.

If the concern is about due diligence and being informed, then one of the first things people need to learn is that a fee is a fee is a fee, however it may be disguised, and it's coming out of your returns. I would agree that a lot of people don't realize that there are such fees, but the banks certainly do.

I won't get into whether we should rescue people on cliffs as we'd soon be into whether people who smoke or who have unhealthy lifestyles or drive too fast should be covered by health insurance, and I hope we don't want to go there.

I will say though that most people have better things to do with their lives than to have to become experts on everything they have to deal with in life. Life is complex. Products are complex. The need for profit can be in competition with the need for honesty. That's why we have regulation.

Why would you believe that there are special mortgage rates for friends and family, valued customers etc? That's just another way of saying that the rate they told you in the first place, which they claimed, falsely, was their best rate, was not in fact their best rate. They are conning people into thinking they are not lying. It's one of the oldest tricks in the book - special rate for you, my friend.

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