# TFSA- Contributions vs Withdrawals



## Patricia (Apr 3, 2009)

Can anyone advise the best way to transfer cash funds between TFSA accounts so that Revenue Canada does not see them as withdrawals thus lowering the contribution room? 

Should these be initiated by the receiving institution?


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## DAvid (Apr 3, 2009)

Yes, they should be initiated by the receiving institution. Be aware of the fees that will be charged by the other institution.

You may wish to open a new TFSA at the receiving institution, and withdraw on Dec 31, then deposit on Jan 2, with no fees charged.


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## Patricia (Apr 3, 2009)

Thanks for confirming my assessment of this. A friend of mine has just lost contribution room because of incorrect advice from a financial advisor and was about to end up in an over contribution situation. So hopefully this post will be a warning to others. It has also become apparent that the banking sector are unwilling to transfer funds in TFSA accounts between institutions and only offer withdrawal as the option. So beware that once a bank has your money they intend to hang on to it for as long as they can. So DAvid's advice on withdrawal is bang on.


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## archanfel (Apr 7, 2009)

It's important to read the fine prints. A lot of banks have transfer fee or account close fee. The only bank I will trust is ING since my RRSP transaction went very smoothly.


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## cardhu (May 26, 2009)

All of the literature surrounding the introduction of the TFSA suggested that it was their intent to limit replacement contributions until the following year ... however, I am not convinced that the law, as written, supports that intention ... I don’t think the language dealing with the supposed “overcontribution” tax, captures the scenario of a replacement contribution ... in other words, while they are saying it can’t be done, I don’t think there are any repercussions if it is done.


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## pingu (Jul 29, 2009)

Hey..I've got a question
I've setup TFSA with ING Direct (high interest savings acct) back in Dec and now I had 3k in it. I just opened a TD Waterhouse TFSA account with the intention to invest in stock for the whole 5K contribution limit for 2009. Can I just move all my 3K into the TFSA account at TD Waterhouse. Is there negative effects towards my contribution room for next year? Thank you.


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## Mockingbird (Apr 29, 2009)

pingu said:


> Hey..I've got a question
> I've setup TFSA with ING Direct (high interest savings acct) back in Dec and now I had 3k in it. I just opened a TD Waterhouse TFSA account with the intention to invest in stock for the whole 5K contribution limit for 2009. Can I just move all my 3K into the TFSA account at TD Waterhouse. Is there negative effects towards my contribution room for next year? Thank you.


If you put in 3K, then you still have 2K contribution room remaining for 2009.
You can *transfer* (broker-to-broker) full 3K from ING to TDW, and you can also add extra 2K into this TDW account this year.
But if you *withdraw* (cash out) 3K, then you can only put in 2K into TDW and 3K deposit has to wait till the new year. Plus, you will have a new set of contribution room in 2010.


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