Want to open a brokerage account and need help.
Page 1 of 2 12 LastLast
Results 1 to 10 of 14

Thread: Want to open a brokerage account and need help.

  1. #1
    Junior Member
    Join Date
    Jan 2017
    Posts
    11

    Want to open a brokerage account and need help.

    Hi,
    I am wanting to open an account for a discount brokerage and I'm thinking of opening an account with Questrade. I want to start getting into buying stocks to go with some other things I have on the go. Part of the registration is picking your account and from what I understand it's best to pick the package option with individual margin, RRSP & TFSA. Now I already have an RRSP through work and a TFSA at my bank. Since I already have an RRSP and TFSA does opening other affect my current accounts some how? What is the best way to buy stocks on Questrade? I don't plan to buy stocks for prob a month or two still as I am still learning how an online brokerage works and want to learn more before I start investing money. Any advice is greatly appreciated.

    Thanks for any and all advice
    Billy


  2. #2
    Senior Member Potato's Avatar
    Join Date
    Apr 2009
    Location
    Toronto, ON
    Posts
    435
    It won't affect your current accounts, but your contribution room is limited -- if you've already used your TFSA and RRSP contribution room by putting money into those other accounts, you won't be able to contribute to your new ones at Questrade until you get more room. But no harm in opening them and leaving them as empty shells. Depending on your plan and where those other accounts are (i.e., you likely won't transfer the work RRSP), you can also transfer them in to Questrade. If you're transferring enough, they will likely cover the transfer-out fee from your old TFSA/other RRSP (if applicable). If you have enough excess TFSA contribution room (or can wait until 2018), the TFSA shuffle may be a cheaper way to move your TFSA.
    Hidden Content , a step-by-step guide to index investing.
    Hidden Content

  3. #3
    Junior Member
    Join Date
    Jan 2017
    Posts
    11
    Sorry if i am asking stupid questions but how does that work with buying stocks? Lets say i have $20,000 of room in my TFSA, does that mean i can only spend that much on stocks? Or do buying stocks not count? Im just confused on how much i am allowed to spend on stocks or does it not matter?

  4. Remove Advertisements
    CanadianMoneyForum.com
    Advertisements
     

  5. #4
    Senior Member pwm's Avatar
    Join Date
    Jan 2012
    Location
    Headingley MB
    Posts
    635
    First transfer cash into the TFSA up to your current limit, then buy what you want. Be careful not to pay more than the cash balance since you won't be able to add more money if you've used up your contribution room. Use a limit order and don't forget he commission.

  6. #5
    Junior Member
    Join Date
    Jan 2017
    Posts
    11
    So after i transfer the max amount into my TFSA i then use that money to buy the stocks? Dors that mean as of 2017 i cant spend more than $52,000 on stocks?

  7. #6
    Senior Member
    Join Date
    May 2010
    Posts
    1,944
    Quote Originally Posted by Silversurfer View Post
    So after i transfer the max amount into my TFSA i then use that money to buy the stocks? Dors that mean as of 2017 i cant spend more than $52,000 on stocks?
    No, you have to subtract the amount you have deposited into your other bank. Hopefully you've been keeping track of how much you've deposited into your bank's TFSA. I think you can view your current limit somewhere on in CRA's website if you have set up a login?

  8. #7
    Senior Member
    Join Date
    Oct 2010
    Posts
    7,595
    Quote Originally Posted by Potato View Post
    Quote Originally Posted by Silversurfer View Post
    Hi,
    I am wanting to open an account for a discount brokerage ... Now I already have an RRSP through work and a TFSA at my bank. Since I already have an RRSP and TFSA does opening other affect my current accounts some how?
    It won't affect your current accounts, but your contribution room is limited -- if you've already used your TFSA and RRSP contribution room by putting money into those other accounts, you won't be able to contribute to your new ones ...
    True ... though IMO it makes it clearer by saying the contribution room for registered accounts are based on the individual and have to be applied across all accounts.

    Where the individual has three TFSAs and two RRSP accounts - the TFSA contribution room has to include the contributions in all three TFSA accounts and similarly the RRSP contribution room has to include contributions for the two RRSP accounts.


    Cheers

  9. #8
    Senior Member
    Join Date
    Oct 2010
    Posts
    7,595
    Quote Originally Posted by Silversurfer View Post
    Sorry if i am asking stupid questions but how does that work with buying stocks? Lets say i have $20,000 of room in my TFSA, does that mean i can only spend that much on stocks? Or do buying stocks not count?

    Im just confused on how much i am allowed to spend on stocks or does it not matter?
    I am not sure why this confusion exists but for some reason, it does.

    TFSA contribution room only applies to putting money into the TFSA. What happens after that is irrelevant.

    Say Rob turned 18 in 2016. He was granted $5.5K of TFSA contribution room in Jan 2016. He deposits in Feb 2016 $3K into a savings type TFSA paying 2%.
    By making the deposit, he has *used up* $3K of TFSA contribution room.

    At the end of 2016, Rob has $2.5K of TFSA contribution room plus a TFSA with a value of something like $3055. The value of the account or that it is cash makes no difference to how much TFSA contribution room Rob has.

    Jan 2017, Rob has another $5.5K of TFSA contributon room granted and no withdrawals. The updated TFSA contribution room available to him = available TFSA contribution room + yearly amount + last year's withdrawals = $2.5K + $5.5K +$0 = $8K.

    Rob want to make more so he opens a brokerage TFSA, contributes $5K in Jan 2017. He now has two accounts that his available TFSA contribution room has to absorb contributions made to *both* accounts. The available TFSA room = $8K - $5K = $3K. He buys a stock that goes from $5K to $22K (I am exaggerating to make the point).

    At the end of 2017, assuming no withdrawals - Rob still has available TFSA contribution room of $3K. The savings account TFSA has grown to something like $3116 and the brokerage TFSA has a stock that is trading at $22K. Contributions are what reduce the TFSA contribution room ... not the investments held in the two TFSA accounts.


    IMO, it makes more sense to add the yearly amount plus any previous year's withdrawals in early Jan *and* subtract any contributions as they happen to always know the current available TFSA contribution room.

    It is like balancing a cheque book.


    Feel free to ask questions.


    Cheers

  10. #9
    Senior Member
    Join Date
    Oct 2010
    Posts
    7,595
    Quote Originally Posted by peterk View Post
    No, you have to subtract the amount you have deposited into your other bank. Hopefully you've been keeping track of how much you've deposited into your bank's TFSA.
    There are two dangers I have seen posters write about where not keeping an up to date number by calculating for oneself have happened.

    The first is an over-contribution, which is subject a penalty of 1% per month (or more) until the over-contribution is dealt with.

    The second is that what was supposed to be an account to account TFSA transfer, which does not use up TFSA contribution was reported by the bank as a withdrawal - resulting in an over-contribution penalty as there was not enough available TFSA contribution room.

    No one care for your money like you do plus records you keep are the easiest way to find/correct any problems.


    Quote Originally Posted by peterk View Post
    I think you can view your current limit somewhere on in CRA's website if you have set up a login?
    You can ... but that is updated yearly. Contributions may not be included in CRA's old number, depending on timing.

    As an example, people who misunderstood the "withdrawal this year becomes contribution room next year" reported that it took as much as a bit over year for bank to report to CRA, CRA to calculate there was an over-contribution then the penalty letter to go out. The delay built in anywhere from four to fourteen months of penalty before the account holder was notified.

    As they say ... buyer beware.


    Cheers

  11. #10
    Senior Member
    Join Date
    Oct 2011
    Posts
    2,443
    Quote Originally Posted by peterk View Post
    No, you have to subtract the amount you have deposited into your other bank. Hopefully you've been keeping track of how much you've deposited into your bank's TFSA. I think you can view your current limit somewhere on in CRA's website if you have set up a login?
    Additionally, you can buy as many stocks as you want in your margin account, there's no limit there. But you then have to pay taxes on your profits.


Page 1 of 2 12 LastLast

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •