# TFSA at 2 different bank



## adreama (Feb 21, 2011)

Can a person have a TFSA account at 2 different banks?


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## Beaver101 (Nov 14, 2011)

Yes, actually you can have 2 different TFSA accounts at 2 different banks ... doesn't matter how many accounts at how many banks you can have as long as your contribution falls within the limits $5,500 for 2014 or $31K for years 2009 to 2014 inclusive.


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## wendi1 (Oct 2, 2013)

Yes. Or two different discount brokers, or five banks and a broker...

And when you get one to send your money to the other to consolidate, they will charge you a fee.

You are on your own for making sure you stay under the contribution limit, too.


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## carverman (Nov 8, 2010)

wendi1 said:


> Yes. Or two different discount brokers, or five banks and a broker...
> *And when you get one to send your money to the other to consolidate, they will charge you a fee. *


*


How does this work? Let's say I open up a TFSA accounts in two different banks. If I have a checking account/LOC with both, and open up a TFSA with each bank to
take advantage of GICs or some other bank related investments for each TFSA , and split my yearly contribution equally...say $2,750 over the course of the year
to each TFSA. 
So If I want to withdraw some money from Bank A TFSA and transfer it to Bank B TFSA, Is "Bank A" going to charge me a withdrawal fee for that? 

I have one with PC Financial. I withdrew some money out of it last year for disability vehicles. I transferred from the TFSA into my LOC with the
same bank, and I wasn't charged a penny in withdrawal fees.*


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## OnlyMyOpinion (Sep 1, 2013)

*"How does this work?"*
You can't know the answer for certain until you check with your particular institutions for your particular types of accounts. Simply ask them for the details (if its not posted on line or in their product literature). Some will cost nothing as you point out, others will charge. Charges for a withdrawl versus a transfer are likely to differ as well, etc.


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## Beaver101 (Nov 14, 2011)

From the PC Financial "Legal" section under the TFSA section:

"2Funds are not taxable even when withdrawn. Any withdrawals made from your account during the year will be added to your contribution room for the next calendar year. Transfers between Tax-Free Savings Accounts will leave your annual contribution room unchanged. The Tax-Free Interest Plus savings account is not eligible for withdrawals through bank machine or Interac® Debit transactions. A transfer fee applies if you transfer funds to another financial institution, other than CIBC."

In Carverman's case, it's a withdrawal from the same financial institution (PC Financial or its sister company), there is no fee. However, a transfer to an unrelated financial institution would result in a fee. I would get the receiving institution to pick up the fee since they're getting new business or simply open up another TFSA account in the other institution and bypass the transfer fee altogether. Only drawback with opening multiple TFSA accounts is keeping track of all of them.


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## bgc_fan (Apr 5, 2009)

carverman said:


> How does this work? Let's say I open up a TFSA accounts in two different banks. If I have a checking account/LOC with both, and open up a TFSA with each bank to
> take advantage of GICs or some other bank related investments for each TFSA , and split my yearly contribution equally...say $2,750 over the course of the year
> to each TFSA.
> So If I want to withdraw some money from Bank A TFSA and transfer it to Bank B TFSA, Is "Bank A" going to charge me a withdrawal fee for that?
> ...


I don't think wendi1 was referring to a withdrawal fee, but more of a transfer fee. I believe most TFSA accounts allow you to transfer from one institution to another directly for a fee, I.e. No withdrawal happens and you don't have to wait for the next calender year to contribute into your second account without incurring an overcontribution issue. Otherwise you could withdraw from bank A in December, and then contribute those funds in January with no cost, other than the loss of some interest.


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## Eclectic12 (Oct 20, 2010)

carverman said:


> How does this work?
> 
> Let's say I open up a TFSA accounts in two different banks. If I have a checking account/LOC with both, and open up a TFSA with each bank to
> take advantage of GICs or some other bank related investments for each TFSA , and split my yearly contribution equally...say $2,750 over the course of the year to each TFSA ...


This is likely a good setup as the TFSA withdrawal to a chequing account of the same financial group is likely to be a free withdrawal. Then a cheque can be written complete the process.

What's likely to have fees (and time required to get the paperwork done) is to transfer directly to another TFSA held at another financial institution.


It does mean that one will have to manage the timing (ex. withdraw on Dec 28th and deposit cheque on Jan 2nd) and it will be a withdrawal followed by next year contribution (assuming one does not have the TFSA contribution room to do it in the same year, then wait for the withdrawal to be added back the following year).


This is where a little bit of time spent - up front when considering the TFSAs to open, can save a lot of cost/trouble later on.


Cheers


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## wendi1 (Oct 2, 2013)

Banks usually don't charge for withdrawals, but they do charge for transfers. Transfers have no affect on your contribution limit, and don't trigger the "wait 'til next year" rule.

I think this accounts for the large number of empty TFSA accounts that are reported. People just take the money out of one bank, and deposit into another bank or discount broker, leaving the old TFSA open and empty.

I don't see the advantage of having TFSAs in more than one institution, myself... but it's certainly possible.


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## Eclectic12 (Oct 20, 2010)

wendi1 said:


> ... Banks usually don't charge for withdrawals, but they do charge for transfers ... I think this accounts for the large number of empty TFSA accounts that are reported. People just take the money out of one bank, and deposit into another bank or discount broker, leaving the old TFSA open and empty ...


Probably ... it's nice to not have to wait for next year but if there's a fee involved, I'd expect a lot of people can plan around the timing (as I have done at times) so that the withdrawal is Dec 28th and the deposit is Jan 2nd. If it means no fee and the empty TFSA does not have an inactivity fee or yearly fee - the situation pretty much pushes people towards the withdrawal instead.





wendi1 said:


> ... I don't see the advantage of having TFSAs in more than one institution, myself... but it's certainly possible.


You don't?

Well there's the crowd that chases whomever has the highest savings account rate for TFSA (ex. there used to be several with between 2 through 3%) - which for a lot of people means a different financial institution than their main bank.

Then there's those like myself who want their emergency funds to have the least amount of delay when using them so I have one with my main bank and then for the mid to long term investments, I've got a second one that is brokerage TFSA for stocks, REITs, etc. The advantage is that I can have the emergency money next business day instead of waiting on a settlement date, then a transfer and possibly a hold on the funds at the receiving institution, if it were to come from a different financial institution.


Cheers


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## carverman (Nov 8, 2010)

Beaver101 said:


> From the PC Financial "Legal" section under the TFSA section:
> 
> "*Debit transactions. A transfer fee applies if you transfer funds to another financial institution, other than CIBC."*


Thanks, so it appears then I can open up another TFSA with my local CIBC branch that PC Financial uses. I do make withdrawals from my CIBC/PCFinancial ATM free of any charges, so that makes sense.

As far as tracking the yearly contribution room in my TFSA..it's very simple if you also maintain a monthly budget on your computer.

I run a monthly budget file on my computer and each the month, not only do I keep track of my checking and savings transactions, but also my TFSA with PC Financial.

The monthly contributions and the remaining contribution room left for the year, so I if decide to do that with a bank that has online access, it won't be no different from what I am doing now.

example: 2014 max $5500 Maximum
PC Financial TFSA "current balance " $2750 - January "contribution" = "remaining contribution room" for PC Financial TFSA
CIBC TFSA "opening balance" $2750 - January "contribution" = "remaining contribution room" for CIBC TFSA

I should be able to do transfers between the two without any fees, but I will check into that to be sure.


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## Beaver101 (Nov 14, 2011)

Yes, please double check the transfer fees rules. You know how they can apply the fine print of "changes without notice".

Having 2 TFSA accounts are not hard to track but when you have more than 2 and then there're RRSPs, etc., (and at different institutions) then the trackings become notorious. And trying remember multiple passwords/PINS in the head. :topsy_turvy:


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## carverman (Nov 8, 2010)

Eclectic12 said:


> Well there's the crowd that chases whomever has the highest savings account rate for TFSA (ex. there used to be several with between 2 through 3%) - which for a lot of people means a different financial institution than their main bank.


This is the main problem with just an interest bearing TFSA..your money earns diddly squat and doesn't even keep up with the yearly inflation. 



> *Then there's those like myself who want their emergency funds to have the least amount of delay when using them so I have one with my main bank* and then for the mid to long term investments, I've got a second one that is brokerage TFSA for stocks, REITs, etc. The advantage is that I can have the emergency money next business day instead of waiting on a settlement date, then a transfer and possibly a hold on the funds at the receiving institution, if it were to come from a different financial institution.


Excellent. My TFSA pays diddly squat in interest (currently 1.4%). This is what I was thinking. The money you invest in a TFSA will earn more tax free money if you put it into GICs, but if you need an emergency cash withdrawal, depending on when the GIC matures, you can lose part or even all the the interest that you were counting on from the investment.

It really doesn't make sense to me to borrow the cash from my LOC (lets say $5000), and pay 4.5% on it until it's paid off, while waiting for a GIC from the same
(or other bank) at 2.5% per annum to mature in 5 years. 

Heck at my age, I may not have 5 years, so I really need to think this out..how to make the most out of what I have invested so far. 

I have over $18,500 in a PCF TFSA that is currently earning around 1.4% and $29K in a regular savings account PCF Interest plus that is *paying next to nothing *(1.35%) I have to include the interest paid on the regular savings account in my income tax filing which will probably erode it even more.

I need to find some better investment vehicles this month.


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## Eclectic12 (Oct 20, 2010)

Beaver101 said:


> Yes, please double check the transfer fees rules. You know how they can apply the fine print of "changes without notice".


Good point ...




Beaver101 said:


> ... Having 2 TFSA accounts are not hard to track but when you have more than 2 and then there're RRSPs, etc., (and at different institutions) then the trackings become notorious. And trying remember multiple passwords/PINS in the head. :topsy_turvy:


One doesn't want it to get out of hand but as tedious as it is, I'm not sure it's that difficult.

In a spreadsheet for an individual, there's one "TFSA" tab with both accounts under it to track the contributions, withdrawals & the fresh contribution room granted each year.

For RRSPs, again one "RRSP" tab with both accounts under it to track similar.


Also - in my case, the first TFSA is for emergency cash so other than tracking that interest was paid properly, there's not a lot to do. The brokerage TFSA has the most work as there are decisions about buying/selling etc.


Cheers


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## carverman (Nov 8, 2010)

Beaver101 said:


> Having 2 TFSA accounts are not hard to track but when you have more than 2 and then there're RRSPs, etc., (and at different institutions) then the trackings become notorious. And trying remember multiple passwords/PINS in the head. :topsy_turvy:


At my age, I have trouble remembering my phone number sometimes..and the pins for my MC and debit card. The rest of the various usernames and passwords that are not directly financial related, I keep in a pocket calendar next to my computer.

That's the problem with the internet and computers...too many passwords. I try and keep my username consistent and my password as well, but some sites require more security on the passwords. No wonder seniors that are not computer savvy avoid using computers.


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## Beaver101 (Nov 14, 2011)

I'm not a senior (yet) and I yearn for the simpler days at work and at home ... too much information or an overload now (except for CMF where it is fun). :chuncky:


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## Eclectic12 (Oct 20, 2010)

carverman said:


> ... I have over $18,500 in a PCF TFSA that is currently earning around 1.4% ...
> 
> I need to find some better investment vehicles this month.


That's where I'm only keeping enough to cover sizeable, short term requirements, that would be needed right away as the emergency fund. As the longer term investments have paid out dividends and/or grown, there is a nice chunk there that for a longer term need can be sold and transferred in about a week or two.

So for the types of emergencies that you'd have to deal with quickly - I suspect you've got far more than needed.




carverman said:


> ... That's the problem with the internet and computers...too many passwords ...


That's where I used software like KeePass ... one password gets me in and then clicking on the links gets me into the website, using the correct (unique) account/password combination. As long as I keep backups & remember the one password - I'm good to go.


Cheers


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## carverman (Nov 8, 2010)

Eclectic12 said:


> That's where I'm only keeping enough to cover sizeable, short term requirements, that would be needed right away as the emergency fund. As the longer term investments have paid out dividends and/or grown, there is a nice chunk there that for a longer term need can be sold and transferred in about a week or two.


Agree..but I have two things working against me now..my age (aproaching 70) and my health which is declining..so I don't want to plan on any long term investments beyond 5 years.

This aft, I called PCF and arranged to move my two savings accounts into what they called "laddered GICs) where you invest a block of cash ($4000) for 1 year that pays about 1.35%..not a heck of a lot above the typical savings acct with them (1.25%), but the next block of GICs for 2 years is a bit higher and the next block is higher still with the last block invested for 5 years at the highest GIC rate they offer right now...2.5% . 

I will have them deposit all the interest back into my savings account balance which is still large enough for emergency fund, combined with my TFSA should be enough to cover any major emergencies with my home. 
I don't want to go into any long term investments that may fluctuate, as I may not have that much time left in years, so I need to be very safe.

At age 73 ( in 5 years time), I may stop the last automatic re-investment anyway. Right now, I can't afford to lose any of my money in perhaps more riskier investments, so I will stick with safe GICs...at least they are cash-able anytime, (even if I lose the interest) should I need to cash them before they mature. 

My Nortel pension is in the process of being wound up, and they owe me some money too ($40K on my TRB and health/dental that was cancelled ) , but with everyone fighting over the sale of the Nortel assets, it may take a few more years before I even see a dime ...and I may not be around by then.


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