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Transfer into TFSA
July 24, 2015
6:14 pm
c001m4n
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I ran into a problem while transferring funds from my bank's chequing account to the TFSA at Implicity.

When I tried to initialize the transfer online from my linked chequing account to my TFSA it gave me an error saying "The To Account is restricted from this feature. Please contact your credit union. (code 114)". I tried to transfer $6000 and $1, but both gave me the same error.

When I contacted Implicity they told me I had to open a HISA with them first. Transfer from my chequing account to HISA, then email them, to request a transfer from HISA to TFSA.

Is this normal procedure? Why can't I complete the transfers online myself?

July 25, 2015
10:32 am
jgclghrn
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I have TFSAs at People's Trust, Hubert and Tangerine. All of them allow transfers into TFSAs via my linked accounts.

I assume you opened a TFSA with Implicity directly via a cheque? If so I wonder why they set up a link if you couldn't use it? I guess you will have to get the answer from Implicity as to why they employ such a round about process to get money into a TFSA.

July 25, 2015
11:10 am
Norman1
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c001m4n said
...

When I contacted Implicity they told me I had to open a HISA with them first. Transfer from my chequing account to HISA, then email them, to request a transfer from HISA to TFSA.

Is this normal procedure? Why can't I complete the transfers online myself?

No, it is not normal for TFSA contributions to require manual intervention by staff. I have seen cases where withdrawals from registered accounts (TFSA and RRSP) have to be done manually.

Sounds like a limitation in Implicity's online banking system. Their system may still be a work in progress. According to Me2Me transfers have finally arrived, fully automatic online transfers to and from a member's linked external account was implemented just a year ago.

July 25, 2015
11:18 am
Norman1
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It is a "known" limitation. I found this in their Me2Me Transfers FAQ:

What accounts are eligible for Me2Me?

Any of your Implicity accounts can use Me2Me Transfers with the exception of TFSA accounts and any personal accounts that require two or more signatures to perform transactions.

August 2, 2015
12:23 pm
c001m4n
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O

Norman1 said

It is a "known" limitation. I found this in their Me2Me Transfers FAQ:

What accounts are eligible for Me2Me?

Any of your Implicity accounts can use Me2Me Transfers with the exception of TFSA accounts and any personal accounts that require two or more signatures to perform transactions.

Thank you for this information.

January 10, 2019
3:04 pm
picassocat
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TFSA at Implicity is a snarl. If you transfer from a tfsa savings to a GIC tfsa the system will count it as a withdrawal then a deposit, NOT GOOD if your TFSA limit is low or inexistent. You are also limited to one free withdrawal per month from a TFSA account, more than one and it's a buck a piece. Rates are pretty good, too bad the minimum deposit for a GIC is 1000$, I like lesser amounts, like 500$. No checking account, but access to an ATM is wonderful.

January 10, 2019
5:14 pm
Loonie
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It's scary to think they could mess up your TFSA.
Did you talk to them about it? It depends on where the money went after it was "withdrawn". Does the amount appear in your non-registered savings account at any point? If not, I think you're safe and that it's jsut a matter of how they phrase the transfer.

January 10, 2019
7:52 pm
hwyc
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picassocat said
TFSA at Implicity is a snarl. If you transfer from a tfsa savings to a GIC tfsa the system will count it as a withdrawal then a deposit, NOT GOOD if your TFSA limit is low or inexistent. You are also limited to one free withdrawal per month from a TFSA account, more than one and it's a buck a piece. Rates are pretty good, too bad the minimum deposit for a GIC is 1000$, I like lesser amounts, like 500$. No checking account, but access to an ATM is wonderful.  

Does that also mean it will be another withdrawal/deposit *when* the Tax-Free GIC term matures ?

January 10, 2019
9:41 pm
picassocat
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We exchanged mails. If it counts as a withdrawal going from tfsa savings to tfsa GIC, then I suppose it’s a withdrawal if you don’t reinvest for another term. They are aware of it. I like the idea that while my funds are held in Manitoba, I can withdraw ding free at an ATM in Gatineau QC. Love this country.
sf-smile

January 11, 2019
11:01 pm
picassocat
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Implicity wanted to clarify: moving tfsa savings to tfsa gic counts as a withdrawal, but the transfer doesn’t alter tfsa limits. S0, if you withdraw OR MOVE tfsa funds more than once a month, it’ll be a buck every time you do. Annoying fee but good follow-up!

January 15, 2019
2:28 pm
Londonguy
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Like Loonie said, maybe this is all just a language usage issue in how you and Implicity are describing things, but I believe you should get more clarification from them about what they've done. As long as your money remains in your TFSA and never becomes freely available to you, it should not matter whether it's being moved back and forth between a GIC or cash or savings or whatever -- as long as everything stays inside the TFSA there has been no "withdrawal" within the CRA definition of the term.

So if they are calling what they are doing a "withdrawal", then I would seek clarification of their practices immediately, because a staff member's incorrect classification and recording of a product transfer as a formal withdrawal would, at the very least, prevent you from re-contributing that money until the following taxation year. Furthermore, the FI cannot undo such a mistake, as CRA will categorically not allow it. You would have to seek relief for the error from the FI yourself.

Even worse, if Implicity staff have incorrectly classified and recorded the movement between products as a formal withdrawal and then also allowed you to prematurely re-contribute the same funds to a different product the same or next day, you may additionally find yourself subject to some whopping 1% per month over-contribution penalties that are going to pile up for an entire year before you find out.

I get it about the activity fees, but that is a small potatoes issue compared to a potential over-contribution problem. To be on the safe side, if I were you I'd be asking for something in writing from Implicity that clearly states they haven't incorrectly routed your transfers between their TFSA products as withdrawals and re-contributions.

For your sake, here's hoping "withdrawal" is just a poor choice of words on their part

January 15, 2019
8:35 pm
Loonie
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I think the word you want them be using is "transfer". Perhaps ask them if they "transferred" your funds - in writing.

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