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CIBC targeted esavings account 4.25%
August 26, 2022
5:14 pm
Bill
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Tell me about it, I've had $4.25 in my CIBC eadvantage account for a long time, zero interest. And no sign of any offer for that account.

I did notice I have a 3% offer to Dec31 if I open a US$ (didn't the format used to be "$US"?) account but, sorry everyone, it appears to be targeted just for me as it says "exclusive offer".

August 26, 2022
5:24 pm
Money
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The 4¼% offer there is for those opening their "first CIBC eAdvantage® Savings Account".

There is another 4¼% offer that is for targeted existing eAdvantage account holders.

It sounds like there is a third offer: 4% for targeted existing eAdvantage account holders.

I am not sure if this information above is correct its all sounds good. I got the CIBC Edvantage Savings Account lucky me got $4.45 in interest Jan 31 2022 on savings of over $100,000.

August 26, 2022
8:35 pm
COIN
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It appears the 4% offer is capped at $200,000 and only for "new" money.

August 26, 2022
11:25 pm
Norman1
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Money said
Why is it that it seems people are getting so much from the CIBC edvantage savings account, but those who have the account make very little. With over $100,000 in my account in Jan 31 2022 interest was $4.45 and Feb 28 2022 interest was $4.02. …

$4.02 interest on $100,000 for the month of February implies a rate of

  $4.02 / $100,000 x 365 /28 = 0.000524 = 0.052% per annum

The CIBC eAdvantage Savings account may have had a much lower rate in February than the 1% it pays now.

The Simplii High Interest Savings Account was paying just 0.10% in February.

August 27, 2022
1:28 am
smayer97
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COIN said
It appears the 4% offer is capped at $200,000 and only for "new" money.  

But with a CDIC limit of only $100K. :-\

October 16, 2022
4:01 pm
Ckavanagh
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Question and advice:
I opened a CIBC Eadvantage Savings account and received the initial 4.25%. When the promo ended the interest rate reduced to 1.25%. I saw a promo for the CIBC TSFA at 2.60%. I opened a TFSA account and moved my money from the Eadvantage Savings account. Now the TFSA interest promo has ended and is reduced to 0.65%. The interest is lower than the Eadvantage Savings Account. I know I don't declare the interest earned for a TFSA on my taxes, but I heard I do I have to declare the interest earned on the Eadvantage Savings account. Its interest is higher than the TFSA so should I just leave it where it is and declare it or move the money back to the lower interest earning TFSA. Which way benefits me more and actually earns money? Seems useless to stay with the account that earns interest only for the government to want back.

October 16, 2022
5:55 pm
Loonie
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Do I hear you right that you are trying to choose between taxable 1.25% and non-taxable 0.65%?

In any event, you can't move the money back to a TSFA in the same year in which you withdrew it. There is a penalty for doing this. You should read up on TFSAs on the government website as there are rules you need to know about.

October 16, 2022
6:33 pm
Bill
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Depends. For example, say you have $10000 contribution room at the beginning of the year and you put $4000 into your TFSA, then in the same year you later withdraw $4100, you still have $6000 you can contribute that year, i.e. in effect in this scenario you can put your $4100 back in plus up to $1900 more. Plus the $4100 initial withdrawal will be added to your contribution room starting next year.

But, yeah, you better read up:
https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4466/tax-free-savings-account-tfsa-guide-individuals.html

October 17, 2022
11:54 am
Ckavanagh
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My question is:
What is the best interest earning savings account?

1. TFSA at a lower interest earning rate = 0.65%, not required to declare as income on taxes
OR
2. Eadvantage Savings Account at a higher earning interest rate = 1.25%; however, required to declare as income on taxes.

The Eadvantage is double the interest so would I benefit putting my money into that even though I have to declare the interest?

I moved the money from Eadvantage to TFSA then back to Eadvantage. If in the end if the TFSA is the better account of the 2 (don't need to declare income on taxes) then I will wait until I can move it back without a penalty (if any)

I should have contacted an advisor before chasing interest rates and moving between my 2 accounts.

October 17, 2022
12:05 pm
Bill
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Depends on your situation, i.e. your marginal tax rate plus impact on any gov't benefit entitlements of that 1.25% interest income. You'll have to do your own personal numbers to see if your 1.25% ends up being more or less than the .65% you'd get.

Also depends on what your personal materiality level is. Do you care if it's only $10 difference? $100? $1000?

October 17, 2022
12:12 pm
FastJonny
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Ckavanagh said
My question is:
What is the best interest earning savings account?

1. TFSA at a lower interest earning rate = 0.65%, not required to declare as income on taxes
OR
2. Eadvantage Savings Account at a higher earning interest rate = 1.25%; however, required to declare as income on taxes.

The Eadvantage is double the interest so would I benefit putting my money into that even though I have to declare the interest?

I moved the money from Eadvantage to TFSA then back to Eadvantage. If in the end if the TFSA is the better account of the 2 (don't need to declare income on taxes) then I will wait until I can move it back without a penalty (if any)

I should have contacted an advisor before chasing interest rates and moving between my 2 accounts.  

Contact an advisor for your personal circumstances.
There is no binary answer for all circumstances.
For most people the most critical determinate would be what income tax bracket are you going to be in when you pay the tax. Many factors can go into the calculation including provincial income tax rates vary between provinces as well.
I think for many people they would be better off with the higher interest , but again, contact your advisor.

October 17, 2022
1:26 pm
Ckavanagh
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I checked my TFSA statement and see I have 0.65% interest plus BONUS 2.25% interest. It's about 23 bucks a month total interest each month on 10K; however, when I contacted CIBC last week, I was only told the interest on the TFSA was 0.65%, the rep did not mention the BONUS interest. I thought it ended and that's why I moved my money to my Eadvantage at 1.25%. I contacted CIBC again today and was told that the bonus interest is until March 2023! Thankfully, I have enough contribution room to move my money back to the TFSA without penalty! I will leave it there until the bonus interest ends.

October 17, 2022
5:10 pm
RetirEd
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Ckavanagh:

I should have contacted an advisor before chasing interest rates and moving between my 2 accounts.

Sadly, you'd have a hard time picking an advisor who didn't put their own interest before yours. At the very least, check with several, and heed warnings from other folks around here and elsewhere.

For older investors, taking money out of tax-free status can seriously reduce means-tested benefits such as GIS or housing assistance. Those at higher income levels may even find their OAS clawed back.

For similar reasons, keep your tax-free accounts full of your highest-yield investments.
RetirEd

RetirEd

October 21, 2022
12:05 pm
Ckavanagh
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Question answered:
Moved the money back to TFSA - interest is 0.65% PLUS 2.25% until March 2023
No penalty to transfer it back as my TFSA contribution room is far greater than the transferred amount.
I'd rather get 2.90% TFSA interest rate than the Eadvantage interest rate at $1.25% on my money and not have to declare it on Income Tax. I will decide later what to do when the TFSA interest rate promo ends and drops to 0.65%.

October 21, 2022
6:55 pm
Loonie
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Thanks for letting us know the outcome. Be sure to keep detailed records of the money you put in and took out and then redeposited to TFSA including date, amount and name of institution. You may be glad of it down the road as CRA records are often not up to date.sf-smile

October 25, 2022
8:20 pm
RetirEd
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...and make sure you have printed records from the financial institution to show!
RetirEd

Dealing with CRA, I always get the names of three agents who agree on important questions, and record the dates I spoke to them.

RetirEd

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