EQ Bank savings accounts, TFSA, and RRSP rates dropping to 1.25% | Page 8 | EQ Bank | Discussion forum

Please consider registering
guest

sp_LogInOut Log In sp_Registration Register

Register | Lost password?
Advanced Search

— Forum Scope —




— Match —





— Forum Options —





Minimum search word length is 3 characters - maximum search word length is 84 characters

No permission to create posts
sp_Feed Topic RSS sp_TopicIcon
EQ Bank savings accounts, TFSA, and RRSP rates dropping to 1.25%
July 8, 2021
9:04 am
HermanH
Member
Members
Forum Posts: 224
Member Since:
April 14, 2021
sp_UserOfflineSmall Offline

pooreva said
Interesting point... So how this works then: lets say you have 12500 in TFSA (2x6000+2 years interest). If you withdraw all 12500 in December (2021-12-31), can you deposit all 12500+6000 (6000 annual allowance for current year 2022) in January (2022-01-01) or you will be restricted by your default limit of 3x6000?  

I included some dates to clarify, but you can (re-)deposit all of the previous year's 12500 and the new year's additional contribution allowance 6000 at the same time on 2022-01-01.

July 8, 2021
10:26 am
Vatox
Member
Members
Forum Posts: 1017
Member Since:
October 29, 2017
sp_UserOnlineSmall Online
142sp_Permalink sp_Print

HermanH said

I included some dates to clarify, but you can (re-)deposit all of the previous year's 12500 and the new year's additional contribution allowance 6000 at the same time on 2022-01-01.  

That’s right. A withdrawal can always be recontributed the following year or later regardless of the contributions you have made concerning the official contribution limit. Keep your official contribution limits separate from your withdrawals and the gains are just money sitting in your TFSA. A withdrawal has absolutely no designation with regards to a contribution, a gain, or a recontribution, a withdrawal is money taken out of your TFSA regardless of how it got there. The only exception would be if you over contributed and were forced to withdraw the excessive allotment.

July 8, 2021
10:52 am
pooreva
Member
Members
Forum Posts: 291
Member Since:
April 2, 2018
sp_UserOfflineSmall Offline
143sp_Permalink sp_Print

Thank you VERY much HermanH and Vatox for clarification.
To my understanding, this means, whoever wants to change FI can take ALL money from FI1-TFSA (for example $150K) in Dec 2021 and deposit in Jan 2022 ALL $150K into FI2-TFSA plus regular 6K for 2022.

July 8, 2021
11:06 am
smayer97
Member
Members
Forum Posts: 467
Member Since:
September 29, 2017
sp_UserOfflineSmall Offline

pooreva said
Thank you VERY much HermanH and Vatox for clarification.
To my understanding, this means, whoever wants to change FI can take ALL money from FI1-TFSA (for example $150K) in Dec 2021 and deposit in Jan 2022 ALL $150K into FI2-TFSA plus regular 6K for 2022.  

Because it warranted a separate discussion on this topic, a thread was started recently that covers this in detail.
https://www.highinterestsavings.ca/forum/tax-free-savings-accounts/how-is-tfsa-contribution-room-determined-do-all-withdrawals-increase-the-max/

The bottom line appears to be that ANY amount withdrawn, including any gains, gets added to the max contribution limits for the following year, on top of annual contribution room allowances.

July 8, 2021
11:38 am
Vatox
Member
Members
Forum Posts: 1017
Member Since:
October 29, 2017
sp_UserOnlineSmall Online
145sp_Permalink sp_Print

pooreva said
Thank you VERY much HermanH and Vatox for clarification.
To my understanding, this means, whoever wants to change FI can take ALL money from FI1-TFSA (for example $150K) in Dec 2021 and deposit in Jan 2022 ALL $150K into FI2-TFSA plus regular 6K for 2022.  

That’s right! Assuming all contributions have been made in the past, you only get the new year allotment of $6k and the withdrawal of $150k in 2021 is recontributable in 2022. It doesn’t matter what FI the withdrawals and contributions are done with, they all just need to add up. I sometimes split my contribution among FIs and the same with recontributions. You can have as many TFSAs as you want, but they must all add up to total your limits.

July 20, 2021
9:12 am
HermanH
Member
Members
Forum Posts: 224
Member Since:
April 14, 2021
sp_UserOfflineSmall Offline

HermanH said
I called CT and they acknowledged receipt of the same e-mail contents and said that they would continue to work towards completing the transfer. I asked if the original transfer request was sufficient / still valid or would my mother need to submit another transfer request due to the original being declined. They did not know, so I asked for one just in case. Hopefully, they will be able to append the confirmation letter and finish the original transfer.  

CT and EQ managed to work out the arrangements between them and satisfied their concerns. No additional paperwork was required from our end.

July 15: EQ was in the process of sending the cheque to CT when CT (2021-07-18) decided to drop their rate from 1.55% to 1.25%, so it was no better than EQ (after all this hassle.)

July 19: So, I called CT and asked them to just terminate the request altogether. They said that the cheque had not arrived, but they would simply return any EQ cheque that arrives and the transaction would not be completed.

Also called EQ and they looked around the office and found the cheque had not yet been mailed. They canceled it and returned the funds to the TFSA account.

Now, to try the same process with WealthOne, the last bank with a TFSA of 1.5%

July 20, 2021
8:20 pm
maxb
Member
Members
Forum Posts: 56
Member Since:
September 24, 2018
sp_UserOfflineSmall Offline
147sp_Permalink sp_Print

Be careful !!! Since $150K is beyond the maximum "contribution room" allocated to any individual, they may set the number to this "maximum".. I think its around $75000..

Just do a transfer to the new bank/creditunion. Doesn't open you to possible issues.

July 20, 2021
8:59 pm
HermanH
Member
Members
Forum Posts: 224
Member Since:
April 14, 2021
sp_UserOfflineSmall Offline
148sp_Permalink sp_Print

Thank you for your concern. I just double-checked with EQ bank rep and he assured us that the cancellation of the transfer request was in time and we can treat the account as though nothing has happened. 🙂

July 20, 2021
9:17 pm
AltaRed
Member
Members
Forum Posts: 1535
Member Since:
October 27, 2013
sp_UserOfflineSmall Offline
149sp_Permalink sp_Print

You got lucky. Maybe there is a lesson to be learned and that is to stop chasing 'outliers'. It has almost never been worth the effort, at least not for registered accounts.

July 20, 2021
9:34 pm
HermanH
Member
Members
Forum Posts: 224
Member Since:
April 14, 2021
sp_UserOfflineSmall Offline

It's true, but EQ charges no transfer fee and the difference was CT 1.55% v EQ 1.25% and we had no idea CT was going to drop its rate any time soon.

That differential made it worthwhile, IMO. Even had the transfer gone through, she would have been no worse off with CT at 1.25% because EQ is at the same rate. There should have been no financial downside; only a waste of time. 🙂

July 21, 2021
3:15 am
Loonie
Member
Members
Forum Posts: 7498
Member Since:
October 21, 2013
sp_UserOfflineSmall Offline
151sp_Permalink sp_Print

Handy hint for future: leading rates ALWAYS come down, especially after a good run. This was to be expected at CT.

No permission to create posts

Please write your comments in the forum.