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WARNING: Transfer-out fees from Tangerine for registered accounts
October 27, 2014
1:45 pm
Rick
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Loonie said

In the meanwhile, can you get CDI to reimburse the $45, Rick? Many, if not most, will do this, making the whole fee-charging operation a bit of a circus, and creating more work which ought not to be necessary.

CDF WILL reimburse up to $50.00 for transfer fees, but only ONCE, and I used up my reimbursement earlier in the year. Before I transferred the last one out of CC, checked with them and was told they have a limit of one reimbursement per customer.

October 27, 2014
2:01 pm
Rick
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Loonie said

I think you're absolutely right about that, Rick. This would require a change in the regulations - see link in post #28 above.

Nothing in the regulations that say they can't start charging on Jan 1 and grandfathering existing funds, or at least locked in existing funds at the minimum. Just sets out the guidelines for notifying customers of fee changes.

October 27, 2014
8:15 pm
Loonie
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Brian said

Loonie said
To some people, $45 may represent 10 Starbucks.
However, picture for moment the person who saved and managed to put $3000 into their first RRSP this year, a 1 year GIC, on the understanding that Tangerine did not charge fees - a fact which was advertised in big letters on their website until a few days ago. It may not be a lot, but this is their first investment and represents some scrimping for their family.
By next year, they have learned a bit more and want to move their money to an institution where they can get a better return, and they plan to invest more money.
However, during the course of their one-year investment, they learn that there is now an exit fee of $45. The receiving institution which they have chosen does not want to reimburse the fee because either they do not charge fees themselves or because the amount is too small to justify it in the mind of the receiving institution.
This client will lose at least the ENTIRETY of the paltry interest earned at Tangerine when they transfer the RRSP. In fact, assuming the rate was 1.4% or less (I believe it was 1.40% early in the year, but am not positive; it's currently 1.35%), this person would actually lose some of their principal!
They will probably decide to move the money elsewhere anyway, because of the better return. But, I think it's fair to say, they will never bank with Tangerine again, and they will tell all their friends and relatives that they were badly treated. Losing customers this way doesn't bode well for Tangerine or BNS or, ultimately, for stockholders, if they don't pull up their socks. As any marketer knows, it costs a whole lot more than $45 to replace a customer, especially if some of their friends and relatives go with them.
By the way, I personally stand to lose nothing. If I did, I would certainly be angry, and I would consider that anger very appropriate.
However, I am making sure that people I am in contact with are made aware of the situation because I believe this is unethical. It's the least I can do. How dare they push their new slogan of "no unfair fees"! Changing the fee structure unilaterally during the course of a GIC is unfair by any measure that I am acquainted with.

Loonie - You make some valid points but you don't give the whole balanced story.
My friends in banking tell me they may lose a customer right now, but they (the customers) rush right back again when the bank or institution gives even a minor bonus or increase in interest. They tell me many customers (not all of course) are temporary as they chase interest rates all over the place. That is quite fine if the customer wishes to do so, but the banks/institutions are getting saddled with costs to service these transactions and they have no choice but to pass on costs to these "revolving door" customers. Customers who do not constantly jump ship for in many cases fairly small amounts of additional interest being paid by another institution are of course not charged transfer fees etc. So people need to weigh how much they really come ahead each year after taxes when they "rate chase" non stop after every bank and CU (not even considering the customer's time and effort involved in chasing the interest rates and then doing the transfers). Loonie - there are usually two sides to get the complete story.

Brian, the reports from your friends in the banking sector sound more like "belly-aching" than a full discussion of reality, so I must remain sceptical.
First, we are talking here about money in Registered plans. If you friends had provided documentation about deposits, I might take them more seriously. It's easier to create suspicion when you are not obliged to document it. It is my belief, equally undocumented, but, I submit, reasonable, that most of the money in Tang's registered plans would be in GICs. Registered plans are traditionally longer-term investments, so it only makes sense that people would invest in vehicles that provide better rates for the longer term, which is usually GICs.
Second, the punitive fee is being levied on registered plans, not the non-registered savings accounts which would logically create most of the revolving-door activity.
You have created an image of registered plan holders running back and forth with great regularity from one institution to another It just doesn't make sense for them to do this in significant numbers.

Further, if Tangerine wants to discourage or punish those who move money frequently and create more work for them, they have 2 other alternatives which they are not using. One, they can stop offering the kinds of promos which encourage this behaviour; and, two, they can add more nuance to their fee, so that it only punishes the people who are causing the problem rather than penalizing people like Rick who has been investing with them for a while now and is making a fair and reasonable decision to move his money elsewhere. Instead, they have chosen a blanket solution, rather like the teacher who punishes the whole class because nobody will tell her whodunit - always an unpopular strategy!

Although I will not personally get caught with this new fee (by luck), my spouse and I have a significant amount of money in Tang, much of which has been there since it was ING. We have had accounts there almost since the beginning of ING. I also deposited a significant amount of someone else's money there when I held their power of attorney some years back. I have recommended it to countless people in years past. We responded to the incessant commercials from the Dutchman telling us to "save your money". We have watched ING's and now Tang's competitiveness gradually disappear. It is just a matter of time until we take most, if not all, of it and move it elsewhere. I am still in the process of researching the best strategy, and am taking my time. What is the response of your banker friends to that? Adding a sneaky fee after the fact seems to be the only thing they can think of to do to keep customers.
If Tangerine wants to keep people's business, they need to be competitive, reverse the fee decision, and stop belly-aching and creating the situations which encourage flight-and-return syndrome. It's as simple as that.

Brian, I recall an exchange we had a few months ago. I haven't tried to find it again, and you most likely have removed your post anyway, since you have removed almost all of them. My point then was that it was only a matter of time until the banks caught up with people who were moving money hither and yon to take advantage of short term promos, by closing the loopholes, because this had been my experience in another, retail, situation. At the time, you seemed very annoyed because I did not want to name the specifics, for privacy reasons, and you appeared suspicious of what I was saying. Now that this is in fact happening, you say that I have given an "unbalanced" view by not discussing the institution's need to do exactly what I said they would do namely, close loopholes. Ironic, eh?

October 28, 2014
9:24 am
Loonie
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Brian said

Loonie - My computer/internet account was hacked into this summer, so I did remove some posts at the time.
That is fine that you are in the process of researching the best strategy and are taking your time as you pull out of Tangerine to move elsewhere. I really don't know why you need to be condescending in your "What is the response of your banker friends to that?" comment.

I'm sorry to hear your account was hacked. Thanks for the explanation. It did draw my attention, as it occurred at the same time as the issue around "Jack Manning" came to the fore, and he had systematically removed his posts.

You have assumed a particular tone in my written words. The internet does not have the capacity to express tone. I'm sure that you are capable of perceiving another tone in these words, and I will leave it there.

November 5, 2014
8:03 pm
Loonie
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The issue of the new fees being introduced by Tangerine was addressed in the Toronto Star by consumer columnist Ellen Roseman, as follows:
http://www.thestar.com/busines.....seman.html

November 28, 2014
10:16 pm
robbell
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Thanks for posting this information.
I have a question.
My original TFSA account was with ING, now Tangerine.
When their rates dropped I waited until the end of the year and transferred most of the money out but left $100. in to keep the account active just in case they started offering a better rate.
When I read this forum I went online and transferred every last penny out of the account. No way I wanted to pay $45 to get my hundred back in the new year.

My question now is whether or not to close the Tangerine account.

Do they charge to close a TFSA account? If they do I'll put a dollar back in and let it sit forever, or do they charge a fee for inactive accounts?

November 29, 2014
6:56 am
Loonie
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They don't have any other fees - yet.
I assume you transferred your $100 into a savings account somewhere, not into a TFSA directly?
This would just count as a withdrawal, I think, not a transfer, and there is no fee for that. TFSAs, unlike RRSPs, are intended to be used from time to time. In other words, it is expected that people will withdraw money because they need to use it. So it would be foolish of them to charge $45 for that kind of withdrawal. Their concern is when you transfer it somewhere else and keep on saving, not spending, because you got a better deal somewhere else.
You might as well close it, then you won't have to be concerned about it any more. You can always reopen it later if you want to.
In any event, if you don't have any money in it, there is nothing for them to take.

Anyone who has a TFSA there which isn't locked in might want to just withdraw it at the end of December and then redeposit it in January in an account that doesn't have transfer fees, such as, but not limited to, Peoples Trust.

I can't see any point, really, in having a TFSA at Tangerine. I don't think it has any competitive advantages. It's a growing market, and really foolish of them to encourage people to leave.

November 29, 2014
9:39 am
robbell
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Thanks for that info Loonie and Rick.

Yes, I just transferred it back to TD through my linked account.

November 29, 2014
10:07 am
Rick
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If you did transfer the hundred bux into a regular account, don't forget your maximum contribution in 2015 will be $5600.00 instead of $5500.00.

November 30, 2014
10:37 am
Jon
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Rick said

If you did transfer the hundred bux into a regular account, don't forget your maximum contribution in 2015 will be $5600.00 instead of $5500.00.

Is really inconvenient that we can't see our TFSA limit on our notice of assessment, just like RRSP; yes I know the information is online, but this is still vary inconvenient as some older folks doesn't want/like to use online system.

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