# Should you have all assets at one bank?



## christinad (Apr 30, 2013)

So, I have almost everything at 1 bank - chequing account, mortgage, discount brokerage, line of credit, credit card. I do have a separate peoples trust tfsa. I was reading Gail Vaz-Oxlade and she says if you owed money on your credit card if it is the same bank they could take the money from your bank account to cover it. So I'd like to be clear I have no debt other then my mortgage. But what if I ran into trouble and incurred debt? Could td take money out of my RRsps? I think if I couldn't pay off my mortgage there would be some legal hoops they would have to go through before taking the money. But what about their rights in terms of paying back a line of credit? (Not a heloc). My understanding is they can ask for the money back at anytime. Could they take the money from my discount brokerage rrsp?

I know I'm being negative but I'd be interested to know what happens.


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## Ponderling (Mar 1, 2013)

I suspect getting funds out of an RRSP to pay day to day debts would face some hurdles for the banker.

We have a smaller account at a second institution for the hopefully never realised event of having our accounts at primary bank frozen should someone try to pull an identity theft scam on us.


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## birdman (Feb 12, 2013)

Firstly, I suggest that you not be too worried about it and I have never heard of a credit card company offsetting their bill about against your bank account. It seems the only way they could do this would be to sue you, obtain judgement, and then guarnishee the account. This would apply to any creditor. To the best of my knowledge, RSP's cannot be attached by another party. Perhaps there could be some small print on some of your account agreements which may say something to the contrary - not sure but I somehow doubt it. 
Perhaps I'm wrong but I do not worry about identity theft too much as it seems to me if someone steals your identity and say mortgages your home its not your problem, its the financial institutions. I deal at a number of financial institutions, actually too many, but have done this just to take advantage of deposit rastes.


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## marina628 (Dec 14, 2010)

Other than one investment account I deal with TD for everything ,it is convenient for me and I am sure if you pay your credit card and debt bills regularly you dont have to worry .


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## Eclectic12 (Oct 20, 2010)

Having seen a big five banks ATMs unavailable for three days over a weekend ... I'm a big fan of having two bank accounts with ATM access, particularly now that there are low fee ones available.

Then too, once the deposits are over the covered limit, I know of people who will setup other accounts to maximise the CDIC coverage.


As for covering debts, I'm not sure what the bank policies are .... taking existing cash from a savings/chequing account I suspect it easy (or cash from a taxable discount brokerage account). 

It would upset the client so I suspect it would be under dire circumstances.


As for RRSPs ... it is harder to tell. 

The Feds as well as some provinces have been making RRSPs more off limits to creditors but according to these articles, YMMV.
http://www.robertsnashgroup.com/article/my-rrsp-creditor-proof
http://www.businesslawyers.com/blog...hts-to-enforce-claims-against-rrsps-and-rrifs
http://www.theglobeandmail.com/glob...ent-funds-from-creditor-claims/article549663/


Cheers


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## OptsyEagle (Nov 29, 2009)

Your question would require a legal review by a lawyer, but from my understanding, since a bank account is a debt of the bank to you and a loan is a debt of yours to the bank, they can legally just take one to pay the other after giving you your 30 days notice. They would of course stop any withdrawals during that 30 days notice until everything is resolved.

My understanding with RRSPs, is that they CANNOT be used to secure debts and are protected from creditors so NO they cannot take those to pay off your loans. What they probably can do is not allow you to ever withdraw or transfer the RRSP until the loans and all interest is paid. So it surmounts to about the same thing.

At the end of the day, you need to ask yourself: Are you going to meet your commitments and pay back the money you promised to pay or are you going to play some unethical, oh woe is me and look at how rich the bank is game and try to scam out of it. If it is the former, it makes no difference. 

If I cannot pay my loans with my cash flow I will cash in my RRSPS to pay them. Why. Because I promised I would.

Anyway, that is my understanding of how these things work.


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## Eclectic12 (Oct 20, 2010)

frase said:


> Firstly, I suggest that you not be too worried about it and I have never heard of a credit card company offsetting their bill about against your bank account.


Me neither ... but then again I've read of a lot of other things I wouldn't have thought were possible.




frase said:


> To the best of my knowledge, RSP's cannot be attached by another party.


It's been made tougher for a creditor to get at an RRSP ... but the articles quoted in my other message say it is possible.
One of them, at least, points out that those at risk are likely those with unlimited liability such as a business owner or professional.




frase said:


> Perhaps I'm wrong but I do not worry about identity theft too much as it seems to me if someone steals your identity and say mortgages your home its not your problem, its the financial institutions.


Trouble is ... most of the articles I've read of instances in Canada seems to have required years in court to get a judgement that the true owner isn't on the hook for the fraudulent mortgage. 



> For example, the Toronto Star reported in October that one of Canada’s largest banks is locked in a legal battle with a North York couple who lost their condo to identity thieves.
> *The Owners owners are faced with a $247,860.00 mortgage which was put on their home. *
> The court has ordered the mortgage cancelled, but the bank is considering an appeal.


http://www.heydary.com/publications/title_theft_ontario.html

I'm not finding the recent examples I posted in another thread ... if I get time, I'll update this comment.



Cheers


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## christinad (Apr 30, 2013)

Thanks for the responses. For some context, I am single so I feel more vulnerable to having problems if I run into financial difficulties. I am in BC so it looks like most of my rrsps are protected except those I have contributed in the last 12 months. I'd be curious if the tfsa is protected from bankruptcy as well. I'll try and do some searches.


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## christinad (Apr 30, 2013)

Your TFSA isn't protected, unless you invest in a segregated fund.


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## WHR_SPUR (Apr 9, 2014)

First and foremost I think it's important to determine if any of your current accounts with TD are over the CDIC insured limit. As TD is a CDIC member, CDIC insures any chequing and savings accounts you have, as well as RRSP's and TFSA's (under certain circumstances), up to $100,000 per account type at each member institution. If you currently have accounts over the insured limit you may want to consider opening new accounts at seperate member instutitionsanyways to have as much of your money as possible insured. Of course this is not always possible for things such as investments, however you're never going to eliminate all of your risk, and really what's the chances of it happening in the first place? 

(For those who may be interested in a complete understanding of how CDIC works here is the link to their website http://www.cdic.ca/Coverage/Pages/default.aspx)

Now onto the question you asked in the first place.

I am familiar with Gail's advise that you refer to, however I was personally never concerned when I had only one bank that held multiple accounts including a line of credit and credit card. At that point in time I owed roughly $10,000 on the line of credit and was paying it down aggressively. The only time I would have been concerned was if I was no longer able to make my payments. If that were ever to become the case though I would have taken steps to separate my funds from the institution that I held those debts with before they even would have known I wasn't able to continue payments. 

I think it's important to remember to look at Gail's advise in context. Most of her following, and the whole premise behind her tv show and books, is helping people get out of debt. The advise is aimed at a segment of the population that is already heavily in consumer debt and is not able to pay it off due to a multitude of factors, but mostly over spending by living beyond their means. In your situation with no consumer debt this is not a risk you should be concerned with. Also if you were to ever "run into trouble", you would be able to move your money to another institution away from your debt before the bank would even know to be concerned.

I believe that having more than one bank that you can access funds from is just a prudent risk management strategy. In fact it's called duplication. If one goes down you can simply switch to the other and continue on. Also, Banks don't have any loyalty to their customers. When was the last time you received anything from the bank that not just anyone walking off the street would get? In fact most times if the bank is giving away anything or doing any "favors" it's only for new customers in order for them to win their business.

I believe you should also feel fairly comfortable with your situation given that you already hold a TFSA with a separate institution that you could access should the need arise. The only concern with relying on Peoples Trust specifically for access to funds should your main account be frozen or otherwise inaccessible, is that to my knowledge (I'm also a Peoples Trust customer) you would need to transfer the funds from Peoples Trust to an external account first in order to access those funds.

With many options these days for no fee accounts at other institutions such as Tangerine and PC Financial, this would be easy enough to set up though and could even be done in a matter of a day without leaving your home. For example I recently helped my girlfriend open a new account with Tangerine. As a brand new customer all she had to do was go online and open an account (using my Orange Key of Course 26609141S1, selfish plug but oh well) and then download their app to use the "cheque in" feature. Then she just wrote a cheque to herself for the $100 initial deposit to link the accounts, used the "cheque in" feature to take a picture of the front and back of the cheque, and then by the next day her money was deposited and she had her $25 bonus for using my orange key. 

To sum up my opinion for you, no it's not something you should be concerned with. You may however want to open a free account and link it to your Peoples Trust TFSA should the need ever arise to access some emergency funds should you be unable to access funds from TD.


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## christinad (Apr 30, 2013)

That's a good point. I do have a tangerine account now and will set it up with People's Trust.


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## fraser (May 15, 2010)

We have always had at least a second account. And that account was usually with a bank competitor, ie a trust company. Many have disappeared but in Vancouver you have a very strong credit union. Just naming that competitor has saved us money over the years. When we had a mortgage it was good for an extra 1/4 point of the rate. We never, ever paid mortgage appraisal or renewal fees...one mention of another institution willing to waive the fee was enough for the mortgage officer to waive them. 

My recommendation is if you do want a back up institution try someone like VanCity. And do business with them. For example, you could get their credit card and use it instead of your banks credit card. Use the bank for everything else. Something like that.


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## randomthoughts (May 23, 2010)

I didn't see any definitive answers here, so... I would not keep debt at the same institution as my bank accounts. Depending on your CC agreement, they could (and have, to my knowledge) 'offset' - take money from your accounts to offset your debts.

Rather than be anecdotal about it, here's the government FCAC link:
http://www.fcac-acfc.gc.ca/eng/resources/faqs/answers/Pages/AE246.aspx

"When accepting a credit card, a client enters into a contract with a financial institution. This contract may give the institution the right to “offset” the credit card debt (take funds from one account to settle a debt in another account with the same financial institution) from the client’s bank account when the credit card bill is overdue."

I doubt any CC/LOC contract indicates that they can pull from an RRSP/brokerage account where tax consequences could be incurred but, you know, check your contract.


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