# TFSA December Shuffle



## avrex (Nov 14, 2010)

I opened my first TFSA with Questrade at the beginning of 2011. However, their system upgrade in Jan went terribly, affecting trade execution and customer service. We're now at the end of the year and I find their service has now improved to a level of 'ok'.

It's time to perform the TFSA December Shuffle. That link includes tips on the strategy, that Canadian Capitalist wrote about.

I've sold the two ETFs that were held within the TFSA. I will now cash out this account and open a new TFSA account with TD in Jan 2012. The main reason that I'm moving to TD is because I already have my RRSPs with TD, and I just feel more comfortable with them, and their platform.

This means that I'll be giving up $5 trades for $10 trades. But, that's ok, because I wasn't very active with my TFSA anyway.

Anyone else performing 'The Shuffle'? What are your reasons?


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## DanFo (Apr 9, 2011)

I'm doing something similar but within td and tdw. Just transfering the cash portion of my td tfsa to a tdw TFSA along with the new contribution room in the new year. I'll also be transfering my rrsp into tdw in the new year. It should get me down to the lower trading commisions when all is done and having all the accounts with td/tdw will keep things simpler.


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## cdnpennystocks (Oct 27, 2011)

Thanks, almost forgot. I'm tempted to hold out a bit in cash as I think the markets will be heading downwards during the winter months. Europe is shaky and I'm still not convinced that the US is in the clear.


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## david2005 (Dec 19, 2011)

DanFo said:


> I'm doing something similar but within td and tdw. Just transfering the cash portion of my td tfsa to a tdw TFSA along with the new contribution room in the new year. I'll also be transfering my rrsp into tdw in the new year. It should get me down to the lower trading commisions when all is done and having all the accounts with td/tdw will keep things simpler.


I transferred my mutual funds from my RRSP, TFSA accounts with TD to TDW about a month ago. You don't need to sell the funds. The transfer is free. You can do it at any time of the year since it's not considered as transfer out, then into RRSP / TFSA accounts.


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## slacker (Mar 8, 2010)

Just sold my holdings at TDWH TFSA today. I have to wait for it to settle, and then call them again to do the free withdrawal. Hopefully in time to beat the new year deadline.

BTW: moving everything to questrade (aka, the best brokerage out there, bar none)


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## larry81 (Nov 22, 2010)

slacker said:


> Just sold my holdings at TDWH TFSA today. I have to wait for it to settle, and then call them again to do the free withdrawal. Hopefully in time to beat the new year deadline.
> 
> BTW: moving everything to questrade (aka, the best brokerage out there, bar none)


were you aware that questrade is run from some guy mom basement ?


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## DanFo (Apr 9, 2011)

I was aware about doing the transfer but for the few quarters of interest i might lose it's easier to do it online then to book an appointment with the bank and with my work schedule i can't get in until the new year anyway.


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## CanadianCapitalist (Mar 31, 2009)

Good reminder avrex. I transferred my TFSA accounts to TDW earlier in the year since Ally did not charge transfer fees.

Now that swaps with TFSA accounts are banned, the December shuffle becomes key if you hold an illiquid asset that you want to move around for tax efficiency. Here's an example: let's say you hold some high dividend yield Canadian stocks in your taxable account and a GIC yielding 2% your TFSA account. Your potential tax savings from the GIC is 0.9%. If you have a eligible stock that is yielding 7% in your taxable account, you will be paying 1.6% in tax. By swapping the Canadian stock with TFSA GIC, you can theoretically save 0.6% in taxes. Keep in mind that transferring the stock in kind to a TFSA account is a taxable disposition, so it is best to do it when you have huge accumulated capital losses or the stock's market value is close to your book value.


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## humble_pie (Jun 7, 2009)

CC doesn't this mean transferring an entire tfsa just to save less than $20 in commissions.

one could buy the desired stock in the tfsa for less than $10 since one already has the cash there. And one could sell the target stock in non-registered. The 2 accounts don't even have to be at the same institution.

hand-transferring a tfsa to another institution during the holiday rush to save 19.95 seems like far too much uproar to me, especially if investor is happy enough at his existing tfsa institution.

even in the swap days, which ended only recently, it was always cheaper to buy & sell in place than to pay the swap fee.


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## CanadianCapitalist (Mar 31, 2009)

Good point humble and I agree with you. Most of the time, it is better to buy and sell within the TFSA account. However, there are some instances when a December shuffle can come in handy. One example would be a GIC that is maturing after a while that an investor wants to rearrange for tax efficiency.


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## gibor365 (Apr 1, 2011)

I have 1 TFSA in saving account at ING Direct and 1 in CIBC investor Edge.
I want to move money from ING to CIBC.
There are 2 way to do it:

1. Go to CiBC branch and fill out transfer form (no fee)
2. On Dec 30, Just move money online from ING TFSA to CIBC chequing account. And on Jan 3 transfer money from CIBC cheqing account to TFSA.

Which option is better in your opinion? 
1st one looks more time consuming as I need to go to branch and wait until transfer will come in and it can take months.


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## humble_pie (Jun 7, 2009)

still not quite getting this. Investor has a GIC that matures in his tfsa & now he wants to own stock in its place in his tfsa ?

so he would buy the stock in his tfsa, paying for it with the matured GIC funds, no.

i for one cannot think of a single situation where an investor would jump ship with his entire account & navigate to a different institution just because he wanted to do a little shopping ...


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## humble_pie (Jun 7, 2009)

gibor one has to smile. Who but you would personally own 2 tfsas


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## Sampson (Apr 3, 2009)

humble_pie said:


> i for one cannot think of a single situation where an investor would jump ship with his entire account & navigate to a different institution just because he wanted to do a little shopping ...


I think in the early years, many people took advantage of the 'higher' rates institutions were offering as HISA within TFSA, sometimes 0.5-1% higher (take Ally or ING for example). Perhaps they hold trading accounts elsewhere (TDW or RBC-DI) and now want that cash for trading in their normal accounts.

I do agree with you that the 'shuffle' only works in some situations. Just last year, I did some rearranging as per CC's example, but I simply sold in the TFSA and bought in the other account.


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## gibor365 (Apr 1, 2011)

humble_pie said:


> gibor one has to smile. Who but you would personally own 2 tfsas


HP, Sampson gave you exact example why 

1/3 of my TFSA (this one that in ING) - fixed-income part, I just want to transfer as CIBC Investor Edge allows me to buy 3rd party GIC with higher rates. 

BTW, I appreciate your comments, but can you advise on my question?


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## Spudd (Oct 11, 2011)

gibor said:


> I have 1 TFSA in saving account at ING Direct and 1 in CIBC investor Edge.
> I want to move money from ING to CIBC.
> There are 2 way to do it:
> 
> ...


I had the same problem and went with the transfer form method because I wanted to move mine back in November. It took about a month for the money to show up, if I remember correctly. Plus it was a hassle filling out the form. I would just do your online transfers if I were you, it'll be faster and easier.


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## gibor365 (Apr 1, 2011)

Spudd said:


> I had the same problem and went with the transfer form method because I wanted to move mine back in November. It took about a month for the money to show up, if I remember correctly. Plus it was a hassle filling out the form. I would just do your online transfers if I were you, it'll be faster and easier.


1 months is still good  I waited almost 1 month when transfered RRSP from TD to TDW and almost 2 months from Sunlife to CIBC .

Other thing that I hate to deal with transfer forms as in every 2nd transfer i did in this country, receiving institution didn't fill out form correctly and relinguishing simply was rejecting it....

Another question that if I deposited into TFSA 5,000 and now have for example $5,100 (and cash out those 5,100), in january how much I can recontribute? 5,000 or 5,100?


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## Spudd (Oct 11, 2011)

5100.


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## humble_pie (Jun 7, 2009)

gibor between your 1) & 2) i don't see much difference except insofar as one may be more convenient or comfortable for yourself, so that would be the one to pick.

i believe that ING has zero transfer-out fees, so if you are transferring the whole account you could do it at any time. You could also ask the destination broker, which is CIBC, to send you the printed transfer form by mail (canada post, you remember it ? where a nice fellow like the-royal-mail comes to your door & pushes paper envelopes through a slot ?)

and you could mail said form back to cibc broker (i'd get the name of a team manager to write on the envelope, bureaucracies are bad these days.)

or you could speed things up by withdrawing to your ING linked bank account - this appears to be a cibc account - near the end of 2011, and then uploading the funds to your cibc tfsa in early january 2012. This appears to be the option you would prefer.

oddly enough, i believe that i myself would choose the first option. Especially if i were planning a new 2012 tfsa contribution at that same cibc brokerage. I would want to avoid any chance that they might mix up the 2 amounts.

you mentioned that you have a GIC possibility with a higher interest rate at cibc; so i would ask them - at cibc brokerage - to guarantee that rate or better for me as soon as i had returned the transfer form to them. This should not be too difficult for them to contemplate as rates are not falling these days, & also the upcoming rrsp season will tend to prop rates.

best of luck. Either way, it looks like a good step.


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## gibor365 (Apr 1, 2011)

humble_pie said:


> oddly enough, i believe that i myself would choose the first option. Especially if i were planning a new 2012 tfsa contribution at that same cibc brokerage. I would want to avoid any chance that they might mix up the 2 amounts.


This exactly what I'm afraid of and this is the only advantage I see in paper transfer. 
Most likely they will need to do buy with different contribution codes....
Probably I'll do first buy from 2011 withdrawal and couple of days later new 2012 contribution...

As per GIC rates ...it doesn't make sence for me to ask locking rate as 3rd party GICs (available via Investor Edge) give higher rates


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