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Interac e-transfers
January 14, 2020
6:06 pm
Vatox
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Didn’t see any threads about this. They charge $1.50 to send out.

https://www.wealthonebankofcanada.com/Personal/BecomingAClient/ServiceFees/

January 21, 2020
9:21 pm
toto
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I called wealth one today to ask about tax forms on the 3000.00 they gave me for the promo last year , for the 3 terms I bought.
I was told that promo money is tax free and I won't be getting a tax form on it! Hard to believe .

January 22, 2020
4:17 am
Loonie
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It sure is hard to believe - if non-registered. If it's registered, the FIs just count it as interest earned within the plan.
I don't remember these promotions though. Did we have a thread, or do you have details?

January 22, 2020
7:15 am
Norman1
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Would that be their 0.2%-per-GIC-year cashback promotion mentioned in WealthOne GIC Promo?

January 22, 2020
8:07 am
toto
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Yes I got the .2 percent cash back promo.
I bought 3 gics, they put 3000.00 in my wealth one account .
As I said I called yesterday to check if they would be mailing out a tax slip for the 3000.00 and that's when they said it's tax free.
The csa's are very knowledgeable at wealth one , but there is a possibility he gave me wrong info.

January 22, 2020
8:55 am
Doug
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toto said
Yes I got the .2 percent cash back promo.
I bought 3 gics, they put 3000.00 in my wealth one account .
As I said I called yesterday to check if they would be mailing out a tax slip for the 3000.00 and that's when they said it's tax free.
The csa's are very knowledgeable at wealth one , but there is a possibility he gave me wrong info.  

Were you the one who bought the CDIC limit for each of you, spouse, and joint at Wealth One, toto? If so, yes, I remember you saying their customer service is excellent. As I recall, they were 5-year GICs, but was something like 3.2-3.4% plus the 0.2% bonus.

It's good that 0.2% is counted as a tax-free monetary gift even though applied as a bonus rate. Do they pay it to you when your GICs mature, or in the first year?

Cheers,
Doug

January 22, 2020
9:30 am
gicjunkie
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toto said
Yes I got the .2 percent cash back promo.
I bought 3 gics, they put 3000.00 in my wealth one account .
As I said I called yesterday to check if they would be mailing out a tax slip for the 3000.00 and that's when they said it's tax free.
The csa's are very knowledgeable at wealth one , but there is a possibility he gave me wrong info.  

I can't help but think of the old saying "If it sounds too good to be true, it's not." Quite frankly, the idea of a tax free promo on a GIC sounds (smells?) really fishy. It's really bonus interest. On the other hand, credit card cash rewards in Canada are treated as "discounts" and are therefore not taxed. Maybe this "promo" falls into that category, but I personally find it hard to believe that "promo" interest is not taxable. It's just additional interest. Even if they do not issue a T5 for it, you may be responsible for reporting the income. Ask the CRA or a tax expert.

I have also had personal experience with Wealth One (a while back) and was not impressed with their knowledge and service. Maybe it has changed since then.

January 22, 2020
1:02 pm
toto
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Yes Doug. I'm that person. 3.4 for 5 years. 2 singles and one joint .
They paid the 3000.00 immediately! That's why I can't believe it's tax free

January 22, 2020
3:25 pm
canadian.100
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toto said
Yes Doug. I'm that person. 3.4 for 5 years. 2 singles and one joint .
They paid the 3000.00 immediately! That's why I can't believe it's tax free  

I am sure a number of us have already noticed that WealthOne Bank has sustained considerable cumulative losses (Retained Earnings are negative $36M to end of Nov 2019) and has not yet turned a profit (cumulative loss at end of 3rd quarter 2019 is negative $4,878,000). (Source: OSFI website Financial Info on Banks).
Since WealthOne may not have deducted the "Bonuses Paid" as tax deductible expenses, as they did not need more deductible expenses to avoid income tax (they already were in a big loss position before taxes) - perhaps there may be a provision to pay out the Bonuses as "non taxable to recipients" if WealthOne Bank itself did not deduct these "expenses" for tax purposes. Just a thought.
In any case, more important, I hope WealthOne turns the corner sooner rather than later and turns a profit to reach a stable position. This is one bank that depositors need and depend on CDIC coverage.

January 22, 2020
4:19 pm
Loonie
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I was just reviewing Doug's original post about the promo.
Seems it bear some similarity to Meridian's 1% promo on RSPs/TFSAs, current.
But Meridian has tamed it by limiting the deposit which qualifies. On the other hand, Meridian's offer applies to any term.
Meridian considers this as bonus interest and not as a contribution to the registered plan into which it is deposited up-front. So, on that basis, I would expect WEalthOne to also consider it bonus interest. But it seems toto's investment was non-registered, so the interest would have to show up as such.
Keep an eye on your online CRA profile to see if a tax receipt shows up there. It's still early for many of them to be sent out anyway.
Another possibility: perhaps it will be added to your annual T5s, divided over five years, and thus will start to appear on 2020 T5.

I wouldn't be inclined to call CRA about it. First, their answers are no more reliable than the ones given by the banks. Second, you might just open a can of worms that will be even worse to deal with.

I would ask for written, signed, clarification as to how this money is to be taxed because you can be sure it will be, one way or another; or at the very least a written signed explanation of why it is not taxable.
You could also ask your accountant, if you have one. They may have seen this kind of issue before.

January 22, 2020
6:28 pm
toto
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Thanks for the feedback. Good idea to check my CRA account.

January 22, 2020
6:39 pm
Norman1
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The 0.2%-per-year cashback may not be taxable. But, that doesn't mean it doesn't have any tax consequences.

No T5 slip is issued maybe because the cashback isn't interest. Instead, it is a partial return of the original principal or a return of capital.

So, there is an immediate reduction in the cost of the GIC from the cashback. On maturity, there would be a corresponding capital gain when the GIC is redeemed.

It looks similar to buying a five-year bond for 99% of face value and having it redeemed for 100% of face value at maturity.

January 22, 2020
10:42 pm
Loonie
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I find it hard to believe a bank would set up a GIC in such a way that the customer would acquire a capital gain.
It certainly wouldn't be what the customer thought they had signed up for and it would create a lot of confusion and resultant phone calls.

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