TFSA: Peoples Trust vs Canadian Direct Financial | Tax Free Savings Accounts | Discussion forum

Please consider registering
guest

sp_LogInOut Log In sp_Registration Register

Register | Lost password?
Advanced Search

— Forum Scope —




— Match —





— Forum Options —





Minimum search word length is 3 characters - maximum search word length is 84 characters

sp_Feed Topic RSS sp_TopicIcon
TFSA: Peoples Trust vs Canadian Direct Financial
December 28, 2016
11:34 am
superd
Member
Members
Forum Posts: 4
Member Since:
December 28, 2016
sp_UserOfflineSmall Offline

Newbie here. I'd appreciate any input on Peoples Trust vs Canadian Direct Financial for a TFSA.

I've been shuffling TFSA money between PC Financial and Tangerine. Often it ends up sitting at 0.8% because with kids and life, I just don't have time to chase promos. I'm tired of their games and want a decent bank with a decent rate and a history of being near the top of the interest rates offered. (i.e. no jumping from offer to offer). Tangerine hasn't offered me any bonus interest in over a year now (and won't via phone call).

From quick research it sounds like Peoples Trust and Canadian Direct Financial have historically offered rates near the top (excluding those great promos I've read about here). Please correct me if I'm wrong. I'd be interested to know which of the 2 are better. Of if there's a 3rd bank I've missed... Thanks!

December 28, 2016
12:11 pm
Norman1
Member
Members
Forum Posts: 2763
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline

Negotiating position for money in a TFSA savings account is not as strong because of the transfer fees. The financial institutions know that.

Peoples Trust's Tax-Free Savings Account is currently 1.75%.

There is not as much rate history for Alterna Bank's TFSA eSavings Account. But, it is currently 1.95%.

December 28, 2016
1:06 pm
semi-retired
Member
Members
Forum Posts: 136
Member Since:
April 15, 2015
sp_UserOfflineSmall Offline

Look into Hubert for TFSA.They presently offer a 1 year GIC averaging 2.05 % that can be cashed in every 3 months if necessary.

December 28, 2016
1:26 pm
Bill
Member
Members
Forum Posts: 1600
Member Since:
September 11, 2013
sp_UserOfflineSmall Offline

Peoples Trust has 1-year GIC at 2.05%. If I buy GICs in a TFSA I like them to mature in December so if I want I can move the money out when it matures and then redeposit it to a TFSA (non-GIC) wherever I choose in January, or else just leave it there and renew again if I still like their GIC rates.

December 28, 2016
1:49 pm
superd
Member
Members
Forum Posts: 4
Member Since:
December 28, 2016
sp_UserOfflineSmall Offline

Norman1 said
Negotiating position for money in a TFSA savings account is not as strong because of the transfer fees. The financial institutions know that.

Peoples Trust's Tax-Free Savings Account is currently 1.75%.

There is not as much rate history for Alterna Bank's TFSA eSavings Account. But, it is currently 1.95%.

Norman1: Thanks for the reply! I was wondering which transfer fees are you referring to? I've been able to transfer TFSA funds without any fees between 3 different institutions so far. So I suspect it's something with these smaller institutions?
I'm hesitant to go with Alterna, because I believe it's only been about 9 months that they've offered that high rate and they may reduce again.

semi-retired said
Look into Hubert for TFSA.They presently offer a 1 year GIC averaging 2.05 % that can be cashed in every 3 months if necessary.

semi-retired: Hubert's "1 year tax free quarterly term" is an interesting option. Do you know how many years they've offered that now?

Bill said

Peoples Trust has 1-year GIC at 2.05%. If I buy GICs in a TFSA I like them to mature in December so if I want I can move the money out when it matures and then redeposit it to a TFSA (non-GIC) wherever I choose in January, or else just leave it there and renew again if I still like their GIC rates.

Bill: Thanks for the input. I'm hesitant to do GICs in case I need the funds, which happens semi-often. I like the option to take TFSA funds out at end of calendar year to move if necessary, so the 1-year GIC seems a bit limiting for this year (won't be done in time), but I'll keep it in mind for next year!

December 28, 2016
3:43 pm
Norman1
Member
Members
Forum Posts: 2763
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline

superd said

Norman1: Thanks for the reply! I was wondering which transfer fees are you referring to? I've been able to transfer TFSA funds without any fees between 3 different institutions so far. So I suspect it's something with these smaller institutions?

I'm referring to possible TFSA transfer-out fees.

Yes, it depends on the financial institution. There are still some that don't charge for transfers or for withdrawals.

Some will charge for TFSA transfers, but not for TFSA withdrawals. I think Alterna Bank is an example: TFSA withdrawals are currently free. But, a TFSA transfer is $50.

December 28, 2016
5:56 pm
SavingIsGood
Member
Banned
Forum Posts: 215
Member Since:
February 18, 2016
sp_UserOfflineSmall Offline

>semi-retired: Hubert's "1 year tax free quarterly term" is an interesting option. Do you
>know how many years they've offered that now?

That is the best option as of now. You get good interest AND ability to withdraw every 3 months + accumulated interest.
Why does it matter 'how many years...'???? Take it what is on a plate NOW. Tomorrow might be something completely different. Remember ING? - great rates, great service; now: THEY pick and choose who gets good promo interest.
All my TFSA money are with Hubert on 1year GIC. And 2017 TFSA allotment will go there right away on Jan 3rd...
Mind you, it is very simple self service at Hubert: you open 1year TFSA GIC, you initiate transfer to the same account. No BS - move money to savings, wait until hold clears, call cus.ser. to open term GIC, move money to TFSA, etc.

I do not understand all this talk about transfer fee? Wait until Dec xx, withdraw money, transfer to other fin.inst.
If you are a bank owner, would you like people to transfer out whenever they are pleased registered product? I would not. And I would change $100 so you get bargain with $50. Fee is just a protection from bank jumpers, nothing else.

December 28, 2016
6:03 pm
Loonie
Member
Members
Forum Posts: 5775
Member Since:
October 21, 2013
sp_UserOfflineSmall Offline

Yes, careful distinctions need to be made between "transfers", which are official transactions which go into CRA's computer, and simple withdrawals. Generally there is no fee for withdrawals, but most financial institutions do have fees for transfers. Peoples does not have a transfer out fee, and neither does Hubert. Alterna does. I don't know about CDF. Fees can change at any time.

The Hubert 1-year GIC can be cashed at any time, but you will only get the interest up to the end of the most recent quarter. The interest is graduated, which rewards you for keeping the money there longer.

I agree with Bill about arranging any GICs to mature in December, but, in practice, this is difficult since deposits are typically made in January. So far, my best idea is to buy the Hubert one year GIC in January, cash it after 3 quarters in September and moved it over to their savings account, currently at 1.7%. Then, next December, you can do what you like with it, and in January start all over again.

If you followed my Hubert strategy, your rates would be:
The first three months: 1.90%
Months four to six: 2.00%
Months seven to nine: 2.10%
Months ten through twelve (assuming no rate changes) 1.7%

The average rate would be about 1.9%, which is better than Peoples and is guaranteed for up to a year, depending on how long you keep the GIC. Next December, if you choose, you can reinvest for another full year and get the full rate as long as you don't need the cash, or you can move the money or invest it for a longer term.
This is not quite as good as Alterna's 1.95, but Alterna's rate is not guaranteed at all. It could go down to 1.7 in, say, February - and I would not be too surprised if it did, all things considered, the way things are going; and then you'd have to pay $50 to move it!

If Hubert's one year rate goes up during the year, which it sometimes does, you have the option of cashing out and reinvesting at the better rate, although this is usually only beneficial if it happens after the first 3 month period. This would not be a "transfer", just a change of investment within the institution.

This guarantees you the rate for the first nine months, and you can always withdraw as needed. Another way to minimize risk is by taking up to 4 smaller GICs and then you only have to withdraw a partial amount if that's all you need. There is a minimum of $1000 per GIC for this special annual rate.

Hubert has been offering the special one year rate for a couple of years now. I think they will keep it, although rate may change. It has apparently been very popular as long as rates are low and people are hoping they will improve.

If you can't or won't consider a GIC, then I woulld go with Peoples. They were the rate leader for years on TFSAs. Their rate has gone down, but they still don't charge transfer fees. I suspect Alterna's rate may not hold, although they have been good so far. They just haven't been around long enough to have established a firm reputation.

that said, I am not fond of Peoples. They had an annoying security breach a few years ago, and many of us are still feeling the effects every time we apply for credit or for a new account. I also don't like the fact that it's a privately held bank run entirely by men. I think women have a lot to offer in the board room as they are often found to be more frugal and cautious. This is one of the reasons I prefer credit unions, as they typically have more women in management. But those are my personal opinions and may not matter to you.

December 28, 2016
9:38 pm
Norman1
Member
Members
Forum Posts: 2763
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline

Loonie said

Yes, careful distinctions need to be made between "transfers", which are official transactions which go into CRA's computer, and simple withdrawals. Generally there is no fee for withdrawals, but most financial institutions do have fees for transfers. Peoples does not have a transfer out fee, and neither does Hubert. Alterna does. I don't know about CDF. Fees can change at any time.

There can be a fee for a TFSA withdrawal in contrast to a TFSA transfer out.

Scotia iTRADE charges $150 to transfer a TFSA out to another financial institution. In their fee schedule, a withdrawal from a registered account (RSP, RIF, RESP, or TFSA) is called a "de-registration". Partial de-registrations are $50 each. A full de-registration is $125.

The trustee reports TFSA withdrawals/de-registrations to CRA as well. Amounts de-registered from a TFSA are added to one's TFSA contribution room in January of the next calendar year. CRA needs to know the amount to add.

December 29, 2016
4:14 am
superd
Member
Members
Forum Posts: 4
Member Since:
December 28, 2016
sp_UserOfflineSmall Offline

I've always do withdrawals (no transfers) to a chequing account. And then send the funds from the chequing account to the other institutions TFSA account. Fortunately between PC, Tangerine (eg move my money) and Questrade there havent been any fees. Also, CRA has always been up-to-date with regard to my TFSA contribution room even though I've only down withdrawals. It's good to know I need to look into withdrawals/transfer fees at the new bank. I took them for granted.

December 29, 2016
6:18 am
superd
Member
Members
Forum Posts: 4
Member Since:
December 28, 2016
sp_UserOfflineSmall Offline

I see Hubert doesn't have CDIC coverage. I'm not very familiar with DGCM. How does that compare with CDIC?

Thanks again for all your input. I really appreciate it.

December 29, 2016
9:08 am
Bill
Member
Members
Forum Posts: 1600
Member Since:
September 11, 2013
sp_UserOfflineSmall Offline

A have a number of TFSA accounts, some with just a couple of dollars left in them as I've withdrawn the rest when their rates were no longer competitive. That way if they come up with an unexpected good rate the accounts are still there to be used then. Never been charged fees on withdrawals.

Loonie said "women.......are often found to be more frugal and cautious" - than men, I guess. I didn't know that.sf-wink

December 29, 2016
11:42 am
Loonie
Member
Members
Forum Posts: 5775
Member Since:
October 21, 2013
sp_UserOfflineSmall Offline

It's hard to make a direct comparison between the different insurance schemes. The CUs are different in a number of ways.

There is a certain comfort, perhaps, in thinking the federal govt may be behind CDIC. There is no explicit gov't backing behind the credit union insurance systems. However, the provincial governments write the legislation that governs them, and it would be a huge mess for the government if something went very wrong because, in Manitoba, credit unions are very popular. I once read what proportion of Manitobans' money is in credit unions, and it's quite high. In Manitoba, they are certainly fair competition for banks.

There are other threads on this topic on this website which you can read. No point in repeating it all again. Suffice to say that most people seem comfortable with the credit union insurance system.

Please write your comments in the forum.