Is it ok to reinvest your TFSA again into a TFSA GIC after it matures? | Page 2 | Tax Free Savings Accounts | Discussion forum

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Is it ok to reinvest your TFSA again into a TFSA GIC after it matures?
May 25, 2021
4:07 pm
PubMob
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Dean said

Norman1 said

. . .

Oaken, for example, does not have a TFSA savings account . . . 

To add to that , Oaken doesn't have 'Any' registered savings accounts❗ And for the life of me, I can't figure out Why.

I've contacted Oaken about this a few times now, but they always avoid answering the question, by replying with a useless PR spiel.

Does anyone know why Oaken has chosen Not to have registered savings accounts ❓

    Dean

  

I cannot answer why. But they MUST have a reason to not have them.

And instead of complaining think of it this way....RRSP, RRIF and TFSA are all free to transfer. While I am adopting a policy to NOT use them any more for RRSP, RRIF and TFSA I might reconsider TFSA. I did a RRIF transfer a couple of months ago and they completed the transfer to another FI ONE WHOLE WEEK BEFORE IT MATURED. And no loss of interest. My main reason for disliking the RRIF and RRSP is that I cannot massage more money out on my own because of no associated Savings Account to do it from, while I can at Hubert. Nor can I direct the withdrawal from a specific GIC while I can at Hubert as I always make sure the RRIF $ is in the RRIF Savings account. I don't like how Oaken takes your mandatory amount....they take all interest from every GIC first and then from the principal of a GIC that is at the lowest rate. (I have no idea what would happen if the principal left was less than $1000 though and you have to call them to find out what $'s were taken from where. And basically all your GIC's turn into a 1 year GIC with interest paid annually at the 5 year rate.) Hubert last year was done all online myself but with the new system the option is there, but does not work so I had to make a simple 3 minute call to have a RRIF withdrawal done that was over and above the mandatory amount. Hubert said this rarely is requested...but I don't know about that as I have been doing that for years.

So is the free transfer an option that is good enough to forget about the no savings account??

edit: And last night at midnight my RRIF payment was paid out BUT my GIC's all show with zero reflection of dollars taken out of any GICs'. So they must have a slush fund attached to my account to do so.

May 26, 2021
12:28 am
Loonie
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We do the same thing at Hubert, and they do not seem to think it unusual when we do, although I imagine few do. We always do it on the phone so as not to accidentally do it wrong.

I've decided to continue with some Oaken RIFs. The way I manage it is that there is always at least one maturing each year somewhere, not necessarily at Oaken. When one is maturing at Oaken, I transfer it to Hubert, where it will be available for when I decide how much to withdraw that year.
So far, that has provided enough liquidity. If there is some left over, then I may transfer it back to Oaken for another GIC.

But there is no getting around Oaken's annoying process of sourcing mandatory withdrawals except to keep only one RIF GIC there at a time, so there is only one source. You can then keep at least one GIC there.

May 26, 2021
9:54 am
Dean
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.
Interesting comments AltaRed, PubMob, & Loonie. Thanks ❗

As for myself ... when it comes to Oaken, I'll continue to keep my Registered Accounts (TFSA's, RSP's & RRIF's) Elsewhere, until they clean up their act. sf-confused

    Dean

sf-cool " Live Long And Prosper " sf-cool

May 26, 2021
7:12 pm
Loonie
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AltaRed said
I am guessing after HCG's near death experience in 2017 when there was a run on deposits necessitating an expensive Buffett bail out, HISA liabilities are being 'managed'. Once one has bled from all orifices, no one wants to bleed that way again. Clearly HCG's HISA rates post-crisis have not been nearly as attractive relative to their GICs as it was pre-crisis.
.  

I don't recall that Oaken was ever a leader in savings rates. Maybe they were but I have never been motivated to have a HISA there.

I don't think their crisis had to do with not offering registered savings accounts. They never had them before the crisis either. It's simply that they are meeting their goals without offering them because they have attractive GIC rates.

It's worth remembering too that registered funds are held in one name only so the max CDIC coverage you can get is 100K in each type of fund (200K in the case of Oaken). For many people, this will mean that they must hold some of their funds elsewhere regardless.

May 26, 2021
7:23 pm
AltaRed
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My point is their crisis was a run on HISA funds and they were almost were out of cash before they got a lifeline. There is no real incentive for them to try and attract HISA deposits, so why bother having a registered savings account? There is no need for them to 'get their act together'.

May 26, 2021
7:29 pm
PubMob
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I don't recall that Oaken was ever a leader in savings rates. Maybe they were but I have never been motivated to have a HISA there.

Correct for sure!!! Not in HISA but sometimes in GIC's.

I don't think their crisis had to do with not offering registered savings accounts. They never had them before the crisis either. It's simply that they are meeting their goals without offering them because they have attractive GIC rates.

Was the crisis not due to unscrupulous mortgage brokers filling out applications incorrectly and that Home Trust was knowingly or unknowingly accepting them? Thus allowing people to access a mortgage that they should have not been able to have. Thus giving out tooooo much money.

It's worth remembering too that registered funds are held in one name only so the max CDIC coverage you can get is 100K in each type of fund (200K in the case of Oaken). For many people, this will mean that they must hold some of their funds elsewhere regardless.

Exactly.

Just to add Loonie, I like your idea of only having ONE RRIF GIC at Oaken. Unfortunately I did not think of that one!! I was more thinking about laddering just enough for every year and the bulk to a 5 year...and where the payment would come from for the mandatory payment. Also there are so many at Oaken that cannot, or do not, answer RRIF questions correctly. A hassle not worth getting into. Last month my wife called to find out what amount of principal and interest was paid out to her. First response was....it all comes from principal....he must have heard me say....that's not right....and he then looked into her account and verified the amounts.
But bottom line....all my RIFS and wife's.....will all move out at maturity.

May 27, 2021
5:04 am
Loonie
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The crisis did have to do with management and mortgage brokers but I've forgotten the details. I remember that there was still underlying solidity to the company.
As a result, Oaken had to offer even more for GICs, which was great for me!
I will be transferring out my last Oaken RIF later this year if they don't offer an RIF savings account before then. I need to control my optional withdrawals and can't do it with them.

May 27, 2021
10:25 am
Norman1
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PubMob said

Was the crisis not due to unscrupulous mortgage brokers filling out applications incorrectly and that Home Trust was knowingly or unknowingly accepting them? Thus allowing people to access a mortgage that they should have not been able to have. Thus giving out tooooo much money.

No, that was just the background that was used by the short sellers.

The company had some high-performing underwriting staff who lied about verifying the income on applications. That's how those "outstanding" individuals were able to process so many applications.

It was called "phantom ticking". The staff would "tick" an "income verified" box without actually contacting the employer and waiting for the employer's employment and salary verification letter.

It turned out to be not material as those "phantom ticked" mortgages had slightly lower arrears and default rates than their mortgages in general.

I suspect Home Trust believed certain of those mortgage broker had doubts about the salary and employment info. But, the brokers submitted the applications anyways and could pin the bad news on Home Trust when the application came back declined.

When the application came back approved, the brokers realised something was wrong. Instead of warning Home Trust of a compromise, the brokers decided to send in more questionable applications which would also get approved.

Kind of like years ago when some restaurant staff realized many people don't verify their monthly credit card statements against the signed slips. The staff got away with changing, for example, a $71.20 slip to $74.20 after it was signed and pocketing an extra $3 of tip!

May 27, 2021
11:01 pm
Loonie
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AltaRed said
My point is their crisis was a run on HISA funds and they were almost were out of cash before they got a lifeline. There is no real incentive for them to try and attract HISA deposits, so why bother having a registered savings account? There is no need for them to 'get their act together'.  

The main reason any FI doesn't do what we want it to do is because it doesn't have to, and that is true here too.

The main reason they change their minds is because they are losing out on business that they want or need to acquire or keep.

I don't think any of them plan with the expectation of a run on the bank, and Home Capital has fixed its problem. EQ, arguably Oaken's closest competitor, just began TFSAs and is not shying away from TFSA savings accounts. Additionally, they can all control deposits in registered savings accounts simply by offering crappy interest rates, but still make them available for those who need them.

When and if enough people transfer out their registered accounts, Oaken will change its mind.

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