Does TFSA interest count as a contribution? | Tax Free Savings Accounts | Discussion forum

As long as the money is not deregistered and then redeposited.
And as always the amount does not exceed your TFSA yearly contribution limit.
Interest earned within a "TFSA" is never taxable.
Unless you're running it like a business in which case the CRA will take notice.
Hope this helps.

Realized investment gains inside a TFSA are not contributions. When withdrawn, such gains will increase one's TFSA contribution limit the following year, even if the amount is larger than the total of one's TFSA dollar limits of previous years.

We looked into this earlier.

Any return earn from money that is already in the TFSA account does not affect your contribution limit at all. Also any amount that you withdraw is tax free, that exact amount that you withdraw gets add back to your life time contribution limit. So if you withdraw $50k this year, you can contribute $50k back without issue in any future years. Make sure its NOT the same calendar year you do the withdrawal, thats the only rule.

hwyc said

I am trying to identify FIs with that monthly paid interest option for TFSA GICs. Tell me I am not looking for an unicorn, or a white rhino.  

I called Motive inquiring about this exact scenario, and the answer is yes they will pay monthly but only to a TFSA savings account.
Now the kicker, you must call to have the monthy interest deregistered !

hwyc said

... I wish this is written somewhere on their site. Words here are kinda you said, they said.  

So, to clarify you must call in to request a monthly interest payment after setting up the GIC. This can only be done by a CSR.
What "Words here are kinda ... " are you refering to ?

I currently have a 3 year non registered gic with Motive that pays monthly.
And was assured by a CSR that the TFSA gic is also available with a monthly payment option.
The caveat is you must be over 57 to qualify.

Norman1 said
Earlier, we found that Motive offers to pay GIC interest monthly for those over age 57 only for non-registered GIC's.  

According to the CSR I spoke to, a monthly payment option is available for a TFSA GIC .
The term must be greater than 1 year and one must be 57 or older.
Monthly payment will be made into a TFSA savings account from which the GIC was funded and one must call a CSR to have interest payments / principal deregistered.

Here are three scenarios that will encompass all questions regarding this I think.

1- Contribute and take out on Dec 31 by cash and you will have all that amount available for re-deposit on Jan 1 of next year. Even if it is bigger than your initial contribution. So contribute $1 and make $0.50 interest on it and you withdraw $1.5 on Dec 31 and then you can deposit back $1.5 on Jan 1 without any problems.

2- Contribute into a TFSA trading account for amount of $1 and trade that really well and make it $1,000,000.00 and withdraw $1,000,000.00 on Dec 31 in cash and you will be able to deposit again $1,000,000.00 on Jan 1st + whatever else the gov allows for next year which is ~$6000.00 so you can deposit $1,006,000.00.

3- If TFSA is transferred between banks using proper TFSA transfer it doesn't affect anything so don't think about it at all and just go ahead and read #1 and #2 again about your other questions.