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Rush to renew
April 2, 2021
10:25 pm
Vatox
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smayer97 said
I do understand CDIC coverage well. I was only asking about the mechanics of getting the TFSA GIC as over the last few days opened up and maxed the TFSA accounts for both myself and my wife and was wondering if to get the TFSA GIC was within the existing TFSA or not. If not, then it would mean losing the opportunity since we have used up our contribution room.  

A TFSA GIC funded from the HISA TFSA is never a contribution. That’s why I always make contributions to my HISA TFSA and then any TFSA GICs that I want must be funded from the HISA TFSA. It makes things very easy to keep track of contributions that way. Similarly you should only withdraw TFSA money to a non-registered account out of the HISA TFSA. TFSA GICs that are funded from the HISA TFSA are automatically matured back to the HISA TFSA.

EDIT: This is within the same FI only.

April 2, 2021
11:16 pm
smayer97
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Yes, after playing around with the site I see that I can fund a TFSA GIC from WITHIN the TFSA, which works for me at this point.

Still curious for my information, is it possible to buy a TFSA GIC without having a TFSA account? I see on the EQ site them saying "you’ll need to open a Savings Plus Account first". Unclear how that would work and seems misleading and incomplete at best.

April 2, 2021
11:44 pm
Vatox
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smayer97 said
Yes, after playing around with the site I see that I can fund a TFSA GIC from WITHIN the TFSA, which works for me at this point.

Still curious for my information, is it possible to buy a TFSA GIC without having a TFSA account? I see on the EQ site them saying "you’ll need to open a Savings Plus Account first". Unclear how that would work and seems misleading and incomplete at best.  

I would never bother to try, but if you could, that TFSA GIC would then be a contribution. I’m sure you most likely can’t because you need to have a TFSA umbrella number for reporting purposes and GICs aren’t permanent entities, so how would they report the contribution, I suppose your first TFSA GIC could initiate that roll number for all future TFSA GICs, but as I was pointing out, without the HISA TFSA, where are your TFSA GICs maturing to? To the regular non-registered HISA! That’s a withdrawal then and not very convenient.

April 3, 2021
12:29 am
smayer97
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Yes, that is a good point about the TFSA GIC initated outside a TFSA to keep in mind.

I'm still curious about the mechanics. Since I have no funds and no contribution room I cannot play around with this to figure it out.

April 3, 2021
10:02 am
Vatox
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smayer97 said
Yes, that is a good point about the TFSA GIC initated outside a TFSA to keep in mind.

I'm still curious about the mechanics. Since I have no funds and no contribution room I cannot play around with this to figure it out.  

Well, there is no option to open a TFSA GIC without having the HISA TFSA created first. You can only access TFSA GIC buying after you have the HISA TFSA created. You are allowed to purchase a TFSA GIC at that point and yes you can fund that TFSA GIC from the regular non-registered savings and make it a contribution. I wouldn’t even allow the option to fund it from anything but the TFSA HISA, but it is there as an option.

April 3, 2021
12:10 pm
rodeworthy
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smayer97 said
....
I'm still curious about the mechanics. Since I have no funds and no contribution room I cannot play around with this to figure it out.  

Smayer97, this partial selection from the dashboard of my EQ Bank accounts may help you to see the 'mechanics' of how the accounts are related:

EQB-acct-dashboard.gif

I opened a non-registered personal savings account with EQB mid-2020. Soon after a non-registered joint savings account with my spouse was created and deposits were made.

In Dec./20 I arranged with EQB for a registered TFSA savings account to be created with no deposit.

Later in December, I transferred out a portion of my TFSA at another FI to a joint account at that FI and subsequently transferred that amount to our CIBC account, which we use as a hub. I then transferred that non-registered amount, plus the 2021 contribution amount ($6,000), to my non-registered personal savings account at EQB.

On January 1, 2021 I moved the original transferred amount from my EQB personal savings account to my EQB TFSA savings account thus completing the December maneuver to move TFSA money from one FI to another.

On January 2, 2021 I moved the 2021 contribution amount ($6,000) from my EQB personal savings account to my EQB TFSA savings account.

On the same day, I purchased, from the money in the TFSA savings account, a 3-month GIC in the TFSA account in the amount of the original transfer plus the 2021 contribution.

Yesterday, April 2, that GIC matured and the total amount was deposited in my TFSA savings account. It is my intention to take out another 3-month GIC funded from the cash in my TFSA savings account. All of these latest transaction are done within the TFSA contract - no withdrawals have occurred.

I have needed the non-registered savings account; the TFSA savings account; and the GIC 'account' to effect all of these transactions. In the future, if I want to move money out of the TFSA, it can be transferred back to my EQB personal non-registered savings account in December so it can be moved quickly to its next destination. Or it could be arranged as an in-kind transfer - which I have never done.

The exact same transactions took place for my spouse who also has a personal savings account; the joint account; and a TFSA account at EQB.

I keep track of contributions completely separate from my FI transactions.

Hope this helps.

April 3, 2021
12:43 pm
smayer97
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@rodeworthy I thank you for taking the time for breaking it down. And it may help someone else but I am not that uninitiated. My issue is with the way EQ presents the option to buy a TFSA GIC stating that you need a Savings account first and nothing more is indicated. So their messaging is very unclear raising all kinds of questions.

As I stated, for now with our funds already in a TFSA, the mechanics are simple and straightforward, now that I have looked at it more closely (with guidance from here) BUT that is NOT because of how EQ presents the offer.

So, that still leaves questions about whether or not it is somehow possible to buy a TFSA GIC via some other mechanism and what how that all works out and plays out (whether optimal or not, as Vatox has pointed out).

April 3, 2021
1:19 pm
Alexandra
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Actually smayer97, it seems like you are asking a few different questions. Your post 02April@1:21: You were wondering about someone getting a "renewal" of 2.3% on their TFSA.

I am going to use me for an example:

01 Jan 2021 opened a TFSA (Savings, not GIC) funded from my EQ regular savings account which was funded from CIBC account. This was my $6K 2021 TFSA contribution. The savings TFSA was at 2.3%.

01 Jan 2021 (later in the day), I purchased a $6K TFSA GIC for 3Mo @2.5%. This was funded from the TFSA (savings) When the GIC matured on 01Apr, the $6K plus interest went into the TFSA (Savings) This is not "cashing in a TFSA".

02 April 2021, I purchased another TFSA GIC for 3months @2.3%. When that matures it will go into the TFSA (Savings) I can leave it in there or purchase another TFSA GIC.

All of these transactions are within the same 2021 contribution. The only way it would be considered cashed is if the funds go from the TFSA (savings) to a regular savings account. If you did that, then you could not re-contribute those funds until next year (2022)

If you had purchased a 3 month GIC in Jan it was at 2.5%; If you decided to purchase one now it would be @2.3%. Both the TFSA(savings) & the 3Month TFSA GIC are @2.3%.

In the past, at other institutions, I have purchased a TFSA GIC from a regular savings account. It would appear you can't do that at EQ bank. Regardless, the bank reported to CRA as a contribution for that year.

I don't know if this is any clearer now?

April 3, 2021
1:25 pm
2of3aintbad
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You definitely want to have a TFSA Savings Account, so you can specify a successor holder or beneficiary. That way, when the TFSA GICs mature, the proceeds will go to the Savings Account, whether or not you are alive. It doesn't make sense to specify the successor holder or beneficiary to a GIC.

April 3, 2021
2:56 pm
Alexandra
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2of3aintbad said
You definitely want to have a TFSA Savings Account, so you can specify a successor holder or beneficiary. That way, when the TFSA GICs mature, the proceeds will go to the Savings Account, whether or not you are alive. It doesn't make sense to specify the successor holder or beneficiary to a GIC.  

I agree. Although with Oaken I notice on all my TFSA & RRIF GIC's, each individual one lists my daughter as beneficiary.

April 4, 2021
9:23 pm
Loonie
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Alexandra said

I agree. Although with Oaken I notice on all my TFSA & RRIF GIC's, each individual one lists my daughter as beneficiary.  

Oaken doesn't offer registered savings accounts, so this is the only way it could be dealt with. With Oaken, either you renew, transfer, or die!

Note, however, that income in the account after date of death is taxable if beneficiary is not a spouse. I don't know if it remains in the TFSA or not prior to disbursement.

April 5, 2021
1:47 pm
Vatox
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Loonie said

Oaken doesn't offer registered savings accounts, so this is the only way it could be dealt with. With Oaken, either you renew, transfer, or die!

Note, however, that income in the account after date of death is taxable if beneficiary is not a spouse. I don't know if it remains in the TFSA or not prior to disbursement.  

I won’t be buying a TFSA GIC at Oaken then, I want my beneficiary to get the money tax free. It won’t be TFSA expansion money, like a spouse, but it’s not taxable upon receipt.

April 5, 2021
2:17 pm
Alexandra
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Ya, the only one that can continue to take advantage of the RRSP/RRIF/TFSA upon death of the contributor is a spouse. Maybe disabled children/relatives that were dependents...?

Otherwise, children or grandchildren or any beneficiary that isn't a spouse, will have to pay income tax on the interest earned after the date of death presumably. The amount up until death would still be tax free. Once Oaken gets all the appropriate paperwork from the executor, I would imagine the funds would go into a regular savings account. Who knows. But if one was interested, they could just phone the bank and ask.

I may be wrong....just makes common sense to me.sf-confused

April 5, 2021
5:30 pm
Rick
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EQ also doesn't offer the ability to roll over their GICs. Funds are automatically deposited to your savings account at maturity. I have a TFSA savings account there, but it's empty as all the funds are in their GICs right now. Not really a hardship to keep it open.

April 5, 2021
7:07 pm
Dean
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Rick said

EQ also doesn't offer the ability to roll over their GICs. Funds are automatically deposited to your savings account at maturity. I have a TFSA savings account there, but it's empty as all the funds are in their GICs right now. Not really a hardship to keep it open.  

That's what I prefer, and one of the reasons I like EQ. If you do want to 'roll over', just go into your EQ SA at maturity date and invest in another GIC.

Hubert does the Exact Opposite ... their GIC's are automatically rolled over (renewed) weather you want, or not. To block the roll over, you have to call in and have a 'conversation' with them. sf-confused

Other FI's (like Oaken) are more advanced ... you can set and change maturity instructions yourself, online.

It's a real 'Mixed Bag' out there ❗

    Dean

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

April 6, 2021
1:33 am
Rick
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Dean said
It's a real 'Mixed Bag' out there ❗

    Dean

  

Kind of a good thing. Guess it depends on your needs. Happy to have Hubert just roll over my RSP GIC ladder every year. Set it and forget it. And their cash-able 1 year rising rate GIC is always fun to play with.
EQ puts the onus on me to remember to renew at maturity. If I can't have a user based system to pick maturity options, I think I'd rather have them automatically roll over with a 7 or 10 day option to call in and cash in.
Never had a problem with calling Hubert. Usually do the chat thing. CSR's are easy to deal with and follow through quickly. When rates took a dive, they even changed my interest option on a couple of GICs from pay to an account to compound. They do have this weird thing where you can open a GIC with nothing and fund it later on. Messes with my calculations.

April 7, 2021
2:50 pm
Dean
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.
To each their own, I guess.

Although I'm in the process of diminishing my exposures, I also have dealings with the likes of Hubert and two other backwoods FI's.. But I much prefer to deal with the more advanced FI's like Oaken, where I can (as an example) set and change GIC maturity instructions myself, online.

EQ may not be quite as advanced, but since they upped their game last year (TFSA's, RRSP's, etc.), they've been on my 'Top Drawer' Short List ever since.

    Dean

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

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