CIBC TFSA Tax Advantage Savings Account Bonus Interest Offer 2.75% till March 31 | General comparisons | Discussion forum

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CIBC TFSA Tax Advantage Savings Account Bonus Interest Offer 2.75% till March 31
January 5, 2020
5:11 pm
miro
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New offer from CIBC from Jan 2 - Mar 31 @2.75%
for CIBC TFSA Tax Advantage Savings Account
Link

Terms and conditions:
link

January 6, 2020
6:42 am
davidgeorge
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What's the rate after March 31?

January 6, 2020
7:51 am
Peter
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davidgeorge said
What's the rate after March 31?  

The regular rate is 1.00%: https://www.cibc.com/en/interest-rates/tfsa-rates.html

January 16, 2020
10:33 am
pmma1
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Money put into this CIBC TFSA promo will be tied up for the year. If withdrawn it cannot be re-contributed to another TFSA until next year. 2.75% @ 3 months and 1.00% @ 9 months averages 1.43%. Better to leave TFSA money in TD Waterhouse investment savings account TDB8150 @ 1.6% for whole year & have money available to buy an appealing ETF

January 16, 2020
3:23 pm
Bill
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No need to take 1%, can take it out April 1 and stick it in LBC at 3.3% or Motive at 2.8% for rest of the year.

January 16, 2020
8:37 pm
GICinvestor
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Being as skeptical as I am I would not even consider this.
1. PT just had a 1 year for 3%
2 PT does not have a transfer fee
3 Why would you want to be sucked in by CIBC for 2.75% and then most likely lower?
4 What is their transfer out fee? Probably unreasonable.

January 17, 2020
8:42 am
Bill
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No transfer fees, just withdraw it. PT is a good offer, but next year you're stuck with whatever they're offering unless you withdraw or transfer.

TFSAs are cool because if you don't like what you're in you can just withdraw (can leave a few cents in so the account's available if they ever have a good deal in the future) and put it in a non-registered HISA, etc (e.g. for 9 months 2.8% outside a TFSA beats 1% in a TFSA) for the rest of the year and then recontribute to TFSA wherever you like next year. I bought Tangerine's 1-year GIC with my last year's $6K TFSA amount, I'm withdrawing it when it matures unless Tangerine comes up with better TFSA rates and sticking it into LBC or B2B for now. Rate chasing with TFSAs is going to result in you being stuck with low rate sometimes so just remember you can always withdraw for the rest of the year.

January 17, 2020
12:28 pm
Rick
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Bill said
No need to take 1%, can take it out April 1 and stick it in LBC at 3.3% or Motive at 2.8% for rest of the year.  

Bill said
No transfer fees, just withdraw it. PT is a good offer, but next year you're stuck with whatever they're offering unless you withdraw or transfer.

TFSAs are cool because if you don't like what you're in you can just withdraw (can leave a few cents in so the account's available if they ever have a good deal in the future) and put it in a non-registered HISA, etc (e.g. for 9 months 2.8% outside a TFSA beats 1% in a TFSA) for the rest of the year and then recontribute to TFSA wherever you like next year. I bought Tangerine's 1-year GIC with my last year's $6K TFSA amount, I'm withdrawing it when it matures unless Tangerine comes up with better TFSA rates and sticking it into LBC or B2B for now. Rate chasing with TFSAs is going to result in you being stuck with low rate sometimes so just remember you can always withdraw for the rest of the year.  

Let's do some math (less the compounding)
6000 @ 2.75% for 3 months = 41.25
Leave it in CIBC adds another 45.00 = 86.25 for leaving in CIBC for the year. (that alone should be reason enough to ignore this offer)

6000 @ 2.75% for 3 months = 41.25
Move to Non-reg @ 3.3% - 6041.25 +( 3.3% /12*9) =149.52
interest for the year (not including in limbo transfer time) 190.77
A generous tax rate of 25% (149.52 - 25%=112.14) + 41.25 = 153.39 interest after taxes

6000 @ 2.75% for 3 months = 41.25
Move to Non-reg @ 2.8% - 6041.25 +( 2.8% /12*9) =126.87
interest for the year (not including in limbo transfer time) 168.12
A generous tax rate of 25% (126.87 - 25%=95.15) + 41.25 = 136.4 interest after taxes.

6000 @ Motive 2.4% (TFSA HISA Rate) = 144 (NOT compounded but tax free)
1 year GIC @ Peoples 6000 @ 3% gets you 180.00 (tax free)

Lazy math... doesn't include compounding, but not a significant amount on 6K to bother with. Tax rate is an average...could do slightly better (or worse).
WAAAAAAY to much work to open a new account, I will probably never use again, & transfer funds around for a 10 dollar difference. Even moving 60K wouldn't be worth it with transfer fees & doesn't include any time the money sits in limbo while being moved around (twice).
Losing money as opposed to just letting it sit in my Motive TFSA HISA.
Govt gets too much of my money already. Anything I can keep tax-sheltered stays tax sheltered.
I have enough FI's...don't need the extra trouble of looking after another account/GIC and yanking funds in/out of TFSAs and complicating my taxes even further. I see a potential to screw up moving something somewhere, either me or one of the banks.
Knock yourself out....not worth it to me.

January 17, 2020
5:07 pm
Loonie
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I'm with Rick.
I would add that there is no guarantee that LBC will continue to offer 3.3 for the rest of the year - in fact, it's unlikely and could easily be gone four months from now.

I can't recall any of these registered short term offers ever being worthwhile enough for me to bother with them.

A couple of years ago, I added up interest received from hopping around with savings accounts and discovered, to my surprise, that I would have been better off to have left it alone with a rate that was a bit lower. I'm not saying you can never win by doing so, but it's tricky and definitely not worth it for relatively small amounts.
Add in taxes, transfer fees and delays with registered funds and it's likely even worse. Some FIs now charge withdrawal fees as well and I imagine this will become more common in future; when one does it, the rest tend to follow.

The incentive to take a short term rate needs to be much higher. I'd want 8% for four months or 3.25% for a year and I would expect to transfer it at the end. I'm sure CIBC has a transfer fee but won't take the time to look it up.

January 17, 2020
5:19 pm
Bill
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I agree with $6K, it's obviously not worth the time, but on principle I'm not going to leave any money with someone offering such a low rate.

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