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EQ TFSA Savings acc 2.3% GIC 3 mo 2.5 % Same for RSP
December 13, 2020
10:04 am
davidgeorge
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julio said
Yes, in theory, but because EQ does not hold the 3 month rate , which I hope to get too, when the currently in transit cheque from T2033 eventually lands on EQ’s desk. Same for daily interest in April. Who knows, what it will be. By the way, Jan 2021 might see some promos from others emerge.  

Thanks. Let's hope some promos from others come out soon.

December 13, 2020
11:00 am
Vatox
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davidgeorge said

Thanks, (1) I am going to open the TFSA savings account now and leave it as zero since I don't have any room for this year. (2) I really doubt that if I fund the GIC directly from my external account, the matured GIC will automatically go back to my external account, which indeed is a non-registered account. Anyway, I will ckeck with EQ.  

Yes, I too was doubting it would mature to the external account, but without the TFSA savings existing first, it may mature to the regular EQ savings and you don’t want that as it would be a withdrawal. I always fund TFSA GICs from the TFSA savings in the same FI, it just makes things simple for book keeping and adding up contributions and withdrawals. In other words, my TFSA GICs are never contributions or withdrawals.

EQ might even release the hold period if you are going straight into the 3 month GIC.

December 13, 2020
1:21 pm
nvn24
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Hello,

This is a noob question since I am new to investments & savings,
I have a lot of contribution room left in TFSA. However, i would like to save money for my down payment for end of next year. I should be able to withdraw money whenever needed.

Can I leave the money in EQ TFSA (hoping to get tax free 2.3% interest) and make 2-3 monthly deposit towards the end of the year 2021.

I do not want to buy ETFs or stock due to the risk involved and just deposit money in EQ TFSA, essentially using it as HISA and get tax free interest? Does that work?

Thank you for helping out!

December 13, 2020
2:23 pm
Dean
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nvn24 said

Hello,

This is a noob question since I am new to investments & savings,
I have a lot of contribution room left in TFSA. However, i would like to save money for my down payment for end of next year. I should be able to withdraw money whenever needed.

Can I leave the money in EQ TFSA (hoping to get tax free 2.3% interest) and make 2-3 monthly deposit towards the end of the year 2021.

I do not want to buy ETFs or stock due to the risk involved and just deposit money in EQ TFSA, essentially using it as HISA and get tax free interest? Does that work?

Thank you for helping out!  

Welcome to the Club, Nvn24 ❗

That's not a 'noob' question ... and as your timeframe is a year (or less), that would work.

Just be aware that the 2.30% interest rate on EQ's TFSA SA will probably be lowered by quite a bit, sometime in the new year (Feb./March❓). If that happens, you could consider putting some of your TFSA $$$ in 'Short Term'
GICs (e.g. 3 months).

Cheers sf-smile

    Dean

sf-cool " Live Long And Prosper " sf-cool

December 13, 2020
2:45 pm
Loonie
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Why not move the money from external account to EQ non-registered savings before the end of the year, so that it is available to put into TFSA savings on Jan 1 as an internal transfer? You might lose a small amount of interest at wherever you are now, but not much. I'm not sure if you would need to wait for it to clear before moving it to TFSA. Clearing takes longer at Christmas due to all the stat holidays.
Perhaps I'm over-cautious , but I am a bit nervous about trying to move funds directly from external to TFSA, especially a GIC. I'm not sure it will go through that way. It's not like we have any prior experience with this at EQ. Jan 1 is a holiday, so there may be no phone help, and lines will likely be busy anyway due to the promo rate and new contribution room.

There may be competitive rates in January elsewhere. I have noticed in the past that they don't always appear on Jan 1 or 2, however. Sometimes a few weeks later.

That said, i don't think 2020 will be a banner year for TFSA/RSP promos. EQ is very likely to be as good as it gets, especially with no transfer fee and for those who are only able to put in 6K then. In my opinion, a transfer fee isn't worth it for a contribution of 6K, especially as it may rise by the time you incur it.
If there is little competition, that could motivate EQ to lower their rates sooner rather than later.

I recall a few years ago that "RSP season" essentially didn't happen. We were looking for promos and there were none to speak of. It could be one of those years.

December 13, 2020
2:50 pm
hwyc
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After browsing thru their FAQs, I am not sure one can buy a TFSA GIC from an externally linked account in a single step.

I intend to buy a TFSA GIC on Jan 1st & working the dates backwards.

  • Transfer money to Savings Plus from external FI latest on Dec 22nd
  • Money unhold after five business days on Dec 31st
  • Open TFSA Savings Account (beneficiary setup etc) on or before Jan 1st
  • Contribute money to TFSA Savings Account on Jan 1st
  • Buy TFSA GIC with money in TFSA Savings Account from on Jan 1st

More lead time required if you do not already have a Savings Plus account or externally link not yet ready. Would you agree ?

December 13, 2020
3:22 pm
Loonie
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Yes, that was part of my point in previous post. I think we may have been overlapping in typing time.

December 13, 2020
3:46 pm
Vatox
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As Loonie says, it’s probably a great idea to dump the maturing GIC into the EQ savings so it’s ready to go to the TFSA on January 1st. Then opening the 3 month TFSA GIC from the TFSA savings account is quick and easy.

December 13, 2020
5:04 pm
davidgeorge
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Thank you all. Seems it's better to move fund into EQ savings plus account a week before Jan. 1. I still don't see the advantage of moving money into the EQ TFSA savings account first, then purchase a TFSA GIC with the fund from the TFSA savings account, which may cause some confusion of the contribution room in my opinion. Why don't we purchase the TFSA GIC with the fund already in the EQ savings plus account directly?

December 13, 2020
5:38 pm
Vatox
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davidgeorge said
Thank you all. Seems it's better to move fund into EQ savings plus account a week before Jan. 1. I still don't see the advantage of moving money into the EQ TFSA savings account first, then purchase a TFSA GIC with the fund from the TFSA savings account, which may cause some confusion of the contribution room in my opinion. Why don't we purchase the TFSA GIC with the fund already in the EQ savings plus account directly?  

Because that’s the confusion! Make it simple, all contributions and withdrawals are made with the TFSA savings account, only. Then your TFSA GICs are funded from that account and matured to that account. You never have to worry about calculating and keeping track of the TFSA GIC values because they are being funded and matured under the same umbrella. It’s only the deposits and withdrawals that come and go to non-registered that need keeping track of.

Edit: going down the list of withdrawals and deposits for the year is much easier if it’s all controlled in one account and you don’t have to scratch your head about where the money came from. With many GICs and FI accounts, it sucks to have to figure out if it was a contribution, withdrawal or neither.

December 13, 2020
8:55 pm
Loonie
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Some FIs (don't ask me which ones as I can't reemember) will ONLY funnel such contributions through a registered savings account. It's just the way they do things, and I think it is the more conventional method.

I understand the concern that it might appear to be two contributions, but I don't think that's the way it works.

December 14, 2020
5:36 am
davidgeorge
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Thanks, Vatox & Loonie.

December 15, 2020
10:03 am
HISAhopper
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I am a bit concerned about opening the TFSA GIC at EQ on Jan 1st for the 3 months because what if EQ introduces transfer-out fee in mid Jan, it would take 2 months, mid March to become effective therefore the fund in GIC would be stuck till end of March and be subject to transfer-out fee onward. Is my concern reasonable?

December 15, 2020
10:12 am
hwyc
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On the otherhand, I'm concerned it will be door crashing on Jan 1st & it's sold out by the time I got in sf-cry

December 15, 2020
11:17 am
Vatox
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HISAhopper said
I am a bit concerned about opening the TFSA GIC at EQ on Jan 1st for the 3 months because what if EQ introduces transfer-out fee in mid Jan, it would take 2 months, mid March to become effective therefore the fund in GIC would be stuck till end of March and be subject to transfer-out fee onward. Is my concern reasonable?  

If you are so concerned about EQ rates that will exist in March, why not just put your money elsewhere in the first place? If EQ TFSA rate were to be horrendous come March, you do realize that you can withdraw the funds free of charge and put them in a non-registered account with a better rate and wait until 2022 to redeposit into a TFSA.

You can’t have everything all the time. You have to just take chances based on best thoughts and do whatever you need to at a given time. If you want that 3 month GIC then you have to deal with whatever comes in March. Nobody here knows what’s coming, so don’t ask about the future rates or fees. Yes the TFSA rates EQ most likely won’t be 2.3%, it will be much less probably, but I don’t know for certain.

December 15, 2020
1:18 pm
Rick
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HISAhopper said
I am a bit concerned about opening the TFSA GIC at EQ on Jan 1st for the 3 months because what if EQ introduces transfer-out fee in mid Jan, it would take 2 months, mid March to become effective therefore the fund in GIC would be stuck till end of March and be subject to transfer-out fee onward. Is my concern reasonable?  

Think it would be a PR nightmare if EQ enticed people to open registered accounts with no fees and industry leading rates then, suddenly introduce fees and drop rates within the first month. I would (will) be PO'd enough to just transfer it all into a non-registered account after the promo period and right out of EQ all together then re-contribute elsewhere the following year. I DO expect rates to drop somewhat, probably to the same as their HISA, but DON'T expect them to introduce new fees....not right away anyway. Think I've paid fees once to move my TFSA funds. PITA. Just moved them to a non-registered account and out after that experience.

hwyc said
On the otherhand, I'm concerned it will be door crashing on Jan 1st & it's sold out by the time I got in sf-cry  

I will be one of the door-crashers. Since most people with TFS to contribute are probably maxed out already come December (as EQ SHOULD be aware of), I expect they will keep the rate for a month or so anyway. Took them about 4 months to drop the rate when they introduced HISAs with a "regular not promo rate" as I recall. Time will tell, live and learn, fool me once, money talks...pick your metaphor.

December 15, 2020
1:47 pm
julio
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EQ is in no rush to receive the money. EQ was in the possession of my T2033 on Dec01. EQ send this request to the other FI on Dec12. Upon me inquiring about the stuckness via a phone call, I learned that my request was processed rather quickly as they have 12 working days to do it.

December 15, 2020
3:51 pm
HISAhopper
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Vatox said

If you are so concerned about EQ rates that will exist in March, why not just put your money elsewhere in the first place? If EQ TFSA rate were to be horrendous come March, you do realize that you can withdraw the funds free of charge and put them in a non-registered account with a better rate and wait until 2022 to redeposit into a TFSA.

You can’t have everything all the time. You have to just take chances based on best thoughts and do whatever you need to at a given time. If you want that 3 month GIC then you have to deal with whatever comes in March. Nobody here knows what’s coming, so don’t ask about the future rates or fees. Yes the TFSA rates EQ most likely won’t be 2.3%, it will be much less probably, but I don’t know for certain.  

I think you misunderstand me. I am not concerned about the EQ rate, in fact it is quite good, my concern is the TFSA GIC transfer-out fee if it would ever be introduced and be effective in march. I would rather open the TFSA HISA where it rates is 0.2% lower than GIC but it is the safe guard against the GIC transfer-out fee. I could transfer out to OAKEN if there would be a transfer-out fee.

December 15, 2020
4:05 pm
Vatox
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As Loonie and I have encouraged contributing funds to the TFSA savings first and then fund the TFSA GIC from that account, I’ve found the question EQ FAQ and it looks as though you must fund your TFSA GIC from the TFSA savings account and trying to fund it from a non-registered isn’t allowed.

December 15, 2020
4:31 pm
Vatox
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HISAhopper said

I think you misunderstand me. I am not concerned about the EQ rate 

Sure you are! Lol. That’s why you want to take advantage of the 2.5% and have the “get out free card” just in case the EQ rates in March aren’t as high as Oaken. That’s not a fair deal. You have to accept whatever comes.

As I said, if you want to take advantage of the 2.5%, then you must accept that perhaps it’s possible EQ could charge for TFSA transfers.

In other words, you wouldn’t care about a TFSA transfer fee if you were happy with whatever RATE EQ offers in March. Therefore it is the RATE that you are concerned about and not the free transfer.

It’s called Critical Thinking Analysis.

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