Access Credit Union 2.8% Registered Savings Accounts | General comparisons | Discussion forum

Registered products have great interest rates at Access, Steinbach, and Rosenort, all very similar CUs in Manitoba. If you do buy a TFSA at these institutions, because they pay interest based on lowest sum of money in the account during the month, and pay interest annually, if you ever want to transfer out, you probably would want to transfer out on Dec 1 to a savings account at same FI. And then a month later on Jan 1 transfer to a different bank.

And I forgot to mention to not totally close the TFSA at Access,Steinbach or Rosenort if you do transfer out, so that the interest will deposit there.

I spoke to CSR at Rosenort CU and was told that if I did the ‘December manoeuvre’ - TFSA savings account - I wouldn’t be able to include the interest for reinvestment the following January. If I understand Briguy correctly, this may be because the interest is not paid until Jan. 2nd. Can anyone confirm this?

JenE said
I spoke to CSR at Rosenort CU and was told that if I did the ‘December manoeuvre’ - TFSA savings account - I wouldn’t be able to include the interest for reinvestment the following January. If I understand Briguy correctly, this may be because the interest is not paid until Jan. 2nd. Can anyone confirm this?  

You've got part of the story right, but I think they were trying to make a different point.

Yes, you wont be able to include your December interest posting as part of any rollover. But that's pretty much what happens no matter where your TFSA money is parked when you do the "December manoevre" because, from a practical point of view, you really need to get your funds out of the account before Dec 31, and no FI posts interest before the end of the month. Meaning that you will undoubtedly have residual funds in your old TFSA once the December interest posts that you probably won't want to move until the following December. That's why it takes at least 2 years to completely (or nearly completely) move TFSA money in this manner. It's not a big deal though -- your interest for December will post in your old account and earn whatever it was earning, so it's not like you lose it.

Now, the added wrinkle peculiar to the case of a Rosenort or a Steinbach or an Access is that they don't post interest at each month end like everybody else does, which means that your unposted interest credit could be either 6 month's or as much as an entire year's worth of interest that will remain temporarily stranded in the old TFSA. You will then be left waiting on the following year's unposted "interest on the residual interest" that won't get credited until early in year 3. Meaning you'll have to draw it off your balance a second time in order to effectively wipe out the account. Another wrinkle at those FIs is that they only pay interest on the lowest balance for the month, so you also need to do your manoevring around December 1st to avoid losing a bunch of interest.

To avoid this entire Groundhog Day cycle, if you really want out of those particular FIs, you're probably better off just doing a formal transfer the day after your interest gets posted and eating the transfer-out fee if you can't your new TFSA FI to reimburse you.

Your other option is to simply withdraw your residual balance in its entirety in early January once the interest is posted, and then redeposit the funds elsewhere to the extent of your eligibility at that time. How long you'll have to wait to redeposit the money in another TFSA depends on whether you're already flirting around your maximum eligibility in the first place -- so it could be as much as a year, or not at all if you're way below the limits