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October 18, 2020
9:25 am
dwdrajesh
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Hi Guys, Sorry I got a few questions I thought would get some reviews from experienced guys on this website before i go ahead.

1. I am thinking of opening a TFSA with Oaken and put the money into an 18 month GIC. I currently only have an RRSP with them (no savings account). I tried to open a TFSA and wanted to transfer from another external account but it seems you need to have a savings account before doing any of this, correct?
2. Do you guys here have any reviews of Oaken and their TFSAs? It seems they are one of the few offering good rates now given the lockdown situation.
3. The other thing I didn't understand is why do banks charge you when you want to transfer your TFSA? If I understand this correctly, we dont need to pay any tax or anything when we withdraw from a TFSA correct? Thanks

October 18, 2020
9:43 am
Dean
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.
My Main 'Pet-Peeve' with Oaken . . .

    They Don't have TFSA/RSP/RIF savings accounts ❗
    .

Gawd knows why sf-confused

          Dean

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

October 18, 2020
10:00 am
2of3aintbad
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Dean said
.
My Main 'Pet-Peeve' with Oaken . . .

    They Don't have TFSA/RSP/RIF savings accounts ❗
    .

Gawd knows why sf-confused

          Dean

  

I have all 3 account types with Oaken. Why would I need a RIF savings account, when GICs are automatically redeemed (partially) to cover the minimum withdrawal. Why would I need an TFSA savings account except for rate chasing? Why would I need an RRSP savings account when an RRSP is meant for retirement and needs growth over the long term?

October 18, 2020
10:00 am
AltaRed
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dwdrajesh said
3. The other thing I didn't understand is why do banks charge you when you want to transfer your TFSA? If I understand this correctly, we dont need to pay any tax or anything when we withdraw from a TFSA correct? Thanks  

Because they can plus there is paperwork involved in the transfer of a registered account that needs to go to the government. Why should they incur and absorb that cost themselves for a 'leaving' customer?

October 18, 2020
12:32 pm
fbeaulie
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My wife and I had TFSAs (GICs) with them (rates were good at that time). However, as mentioned by Dean, they do not have TFSA Savings Account and, therefore, options are limited at maturity date and this is the main reason why I will never have TFSAs (GICs) with them again.

Re: Transferring a TFSA. I once had a direct transfer of a TFSA from one institution to another one. The receiving institution did not report it correctly and I got assessed a $3,500 penalty. After several phone calls, several e-mails and a notice of objection, I managed to have it cancelled but it took long and it was not fun.

October 18, 2020
12:42 pm
topgun
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Years ago there was no cost to transfer a RRSP GIC to another FI. I transferred my RRSP GIC's to one FI before the transfer fee initiated. There were special deals to transfer RRSP to other FI. I remember RBC, BMO, and National Bank. RBC gave 1% on transferred funds deal. The deal applied to several account types (i.e. RRSP, LIRA, not sure what else). Limits on amount of transfer. It was a good deal. I moved RRSP out after 6 months. The receiving FI paid the transfer fee. BMO was not as good as RBC deal. That is no longer the case. You need to pay the transfer fee to cover the paperwork cost.

Have a Great Day

October 18, 2020
1:04 pm
Vatox
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Best way to move TFSA money is to withdraw from a TFSA in December and then contribute the same amount to a different TFSA in January. It’s the only way I have ever moved TFSA cash.

October 18, 2020
1:50 pm
topgun
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Vatox said
Best way to move TFSA money is to withdraw from a TFSA in December and then contribute the same amount to a different TFSA in January. It’s the only way I have ever moved TFSA cash.  

I was not a believer in TFSA when they appeared. I tried several small TFSA to determine what I liked. I found a couple that fitted my investment style. I withdraw the funds when GIC matures. Invest the money in TFSA that suits my style. Since I am not close to contribution limit I can deposit the funds quickly. The TFSA that have no activity/funds for two years are closed.

Have a Great Day

October 18, 2020
2:04 pm
Vatox
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Not sure what you mean by “believer”? It’s tax free on the gains, it’s real. It’s not a bottle of snake oil that makes claims to cure cancer!

October 18, 2020
3:15 pm
topgun
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Vatox said
Not sure what you mean by “believer”? It’s tax free on the gains, it’s real. It’s not a bottle of snake oil that makes claims to cure cancer!  

I was retired at the time. My income was low. The amount of tax I paid on interest/dividends was a small amount. I have many friends that contributed maximum. I have some friends that do not believe as well. I am changing. It also depends if your wife worked. Single income families can split some income streams to pay less tax (i.e. pension income).

Have a Great Day

October 18, 2020
3:53 pm
Loonie
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AltaRed said

Because they can plus there is paperwork involved in the transfer of a registered account that needs to go to the government. Why should they incur and absorb that cost themselves for a 'leaving' customer?  

Because it's the cost of doing business when you fail to meet the customer's needs.
They do it because almost all of the other guys do it. I would call it price fixing, in effect, although prices vary a bit. It's a game they play because they all know that in most cases the receiving institution will reimburse the customer IF they ask.
It's a game of "gotcha". When you take out a TFSA GIC, you have no idea what they will charge you at the end of the day to transfer the funds. There is no limit. I believe such fees, if any, should be embedded in the original ocntract, not subject to change.
Accordingly, our registered funds tend to be at Oaken and Hubert. except when there is an exceptional deal elsewhere that overrides the likely exit fee.
I agree that Oaken should offer registered savings accounts. However, they are good at transfers - efficient and free. They generally take significantly less time than the FIs which charge for this. They will also do partial transfers efficiently, where you can leave some of the money in a renewed GIC but transfer some of it elsewhere to registered savings.

October 19, 2020
5:11 am
savemoresaveoften
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topgun said

I was retired at the time. My income was low. The amount of tax I paid on interest/dividends was a small amount. I have many friends that contributed maximum. I have some friends that do not believe as well. I am changing. It also depends if your wife worked. Single income families can split some income streams to pay less tax (i.e. pension income).  

The design of the TFSA is an alternative to RRSP to save for retirement. If you are already retired and not paying a lot of income tax as a result, then it only works well to park extra cash / investment you dont need right now.

Whether the spouse works or not is not that relevant in my mind.

October 22, 2020
5:02 am
RetirEd
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Peoples', for one, does not charge for a TFSA transfer-out. They won't cover the transfer cost at another financial institution if you transfer a TFSA IN, though.

You pay no transfer fee if you withdraw, then reinvest that amount in an TFSA the following year. The trick is that most of us make our TFSA deposits early in the year, but we want to make transfers near the end of the year so that our cash is earning taxable interest for the shortest possible time. If you get GICs with annual maturity dates, you have to keep the cash in a tax-free ISA or short-term GIC until the end of the year, usually at lower interest rates.

Some outfits let you set GIC terms of UP TO the rounded years - but then you forgo the higher interest rate that kicks in when you cross the year boundary.

This may not matter if you are in the odd situation where you don't earn enough to pay any extra tax on the money sitting outside the TFSA until the next year. But it still might affect your income-tested benefits.

In the past I have worked Tangerine's pain-in-the-ass promotional savings account bonuses to keep my rate decent until the new year, when I can re-invest in the new institution. The only time I paid a transfer-out fee was when I quit Tangerine last summer and figured out it was a better deal to pay the fee and keep the cash tax-sheltered all year.
RetirEd

October 23, 2020
5:08 pm
Loonie
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Sometimes you can mitigate this problem by choosing GICs that have odd-month terms, so that you buy in January but it matures in the last quarter.
It's even possible that with some FIs you could negotiate the term length, but I have never tried this.

The problem is in how the TFSAs are structured. Way too convoluted, forcing you to wait til next year to re-contribute while permitting unlimited transfer fees.

I am phasing out all TFSAs at FIs that charge transfer fees unless the rate is substantially better elsewhere - which is unlikely to happen these days..

But, heck, TFSA savings and GIC accounts may become irrelevant soon if interest rates continue their tumble, which seems likely to me.

October 24, 2020
1:41 am
topgun
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Loonie said
Sometimes you can mitigate this problem by choosing GICs that have odd-month terms, so that you buy in January but it matures in the last quarter.
It's even possible that with some FIs you could negotiate the term length, but I have never tried this.

The problem is in how the TFSAs are structured. Way too convoluted, forcing you to wait til next year to re-contribute while permitting unlimited transfer fees.

I am phasing out all TFSAs at FIs that charge transfer fees unless the rate is substantially better elsewhere - which is unlikely to happen these days..

But, heck, TFSA savings and GIC accounts may become irrelevant soon if interest rates continue their tumble, which seems likely to me.  

When I started purchasing GIC's in 2018 I tried terms of 120 days, 9 months and 18 months at an Ontario credit union. I noticed they have terms from 30-364 days. The rates at Ontario credit unions are competitive with other Ontario credit unions. You can purchase a GIC that matures Dec 26th or so. Plenty of time to withdraw by Dec 31st and deposit somewhere else in January. Personally I would not do this with the low rates on terms less than 365 days.

Have a Great Day

October 24, 2020
3:30 pm
Loonie
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I think I wasn't clear enough.
I wasn't referring to term deposits less than a year.
I was referring to non-standard GICs that last more than one year which are not exact multiples of one year, e.g. 27 months, 46 months etc. These typically have promotional rates. If you can find one that meets your needs, they can be worth considering to make your TFSA GICs mature at a more optimal time. Need to make sure they have annual compounding.

=-

October 24, 2020
6:06 pm
topgun
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Loonie said
I think I wasn't clear enough.
I wasn't referring to term deposits less than a year.
I was referring to non-standard GICs that last more than one year which are not exact multiples of one year, e.g. 27 months, 46 months etc. These typically have promotional rates. If you can find one that meets your needs, they can be worth considering to make your TFSA GICs mature at a more optimal time. Need to make sure they have annual compounding.

=-  

Correct. When I started buying GIC's in 2018 I bought 120 day in May, 9 month and 18 month in October. They had promotional rate of 3.25%. I tried them and determined they are not for me. Currently they have a 19 month term special rate @ 1.00%. Higher than 1 year @ .85% and less than 2 year @ 1.15%. I may be wrong, but I am sure if you wanted a 46 month and 7 day they would accept with around the 46 month rate.

When I bought at Simplii I did not have the funds available. By the time funds arrived the term was 362 and 364 days. The funds were collecting interest for 3-1 days at the other FI.

All had annual compounding.

Having fun.

Have a Great Day

October 26, 2020
8:39 am
topgun
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topgun said

Correct. When I started buying GIC's in 2018 I bought 120 day in May, 9 month and 18 month in October. They had promotional rate of 3.25%. I tried them and determined they are not for me. Currently they have a 19 month term special rate @ 1.00%. Higher than 1 year @ .85% and less than 2 year @ 1.15%. I may be wrong, but I am sure if you wanted a 46 month and 7 day they would accept with around the 46 month rate.

When I bought at Simplii I did not have the funds available. By the time funds arrived the term was 362 and 364 days. The funds were collecting interest for 3-1 days at the other FI.

All had annual compounding.

Having fun.  

I checked regarding the special 19 month term. If you have a GIC maturing within the next 45 days they will lock in the rate now that will take effect upon maturity. Just need to call them to hold rate.

Have a Great Day

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