# More TFSA questions… timing?



## Siwash (Sep 1, 2013)

Hey folks, 

Those who have followed my recent threads know that I am new to investing (yes, I am ashamed for waiting so long :cower. In addition to not investing in the past, my wife and I have also not taken advantage of TSFAs. We are about to change all that very soon. The question(s) I have is this: Is there a "best time" to buy and take advantage of a TFSA? I've come across info on buying right after the New Year. So it seems like the new year gives you the additional $5000 contribution allotment. But in our case (we can contribute $51,000 in total up to this year), should we wait for any reason for 2014 to open the account or do it ASAP? I am guessing that if we do it now, we'd take advantage of savings for this tax year (we have a combined gross of $150K +). Am I correct? 

If we do take advantage of the $51,000 now, then we can "top up" in January an additional $5000 each, correct? 

We will be putting about $10K in equities and about $40K in GICs/HISA into our TFSAs. 

Thanks so much for any input.


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## Spudd (Oct 11, 2011)

There's no need to wait. You can do 25.5k each now, and come January, an additional 5500 each.


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## Butters (Apr 20, 2012)

Only reason to wait would be for a "year end or early year " promo for your tfsa. Some banks do it, which bank were you thinking of investing it, and what rate?


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## stardancer (Apr 26, 2009)

Never having a lot of extra $$ to invest, I didn't worry too much about when to put money into our RSPs and now our TFSAs. My philosophy is to invest it when you have the $$; don't wait because for sure something else will come up. Once I had the money in the registered account, I was loathe to touch it.


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## Siwash (Sep 1, 2013)

SheaButters said:


> Only reason to wait would be for a "year end or early year " promo for your tfsa. Some banks do it, which bank were you thinking of investing it, and what rate?


I am looking at Peoples - 3%! Seems like the best rate… We are planning to place some investments in a portion of what we are eligible for and then put the rest ion something like Peoples and GICs too…


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## liquidfinance (Jan 28, 2011)

The only aspect of timing a tfsa maybe pulling a purchase forward to December if you would be making it early in the new year anyway. 

That way you don't have to wait till the following year to recontribute the withdrawn sum.


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## heyjude (May 16, 2009)

Siwash said:


> Hey folks,
> 
> Those who have followed my recent threads know that I am new to investing (yes, I am ashamed for waiting so long :cower. In addition to not investing in the past, my wife and I have also not taken advantage of TSFAs. We are about to change all that very soon. The question(s) I have is this: *Is there a "best time" to buy and take advantage of a TFSA? *I've come across info on buying right after the New Year. So it seems like the new year gives you the additional $5000 contribution allotment. But in our case (we can contribute $51,000 in total up to this year), should we wait for any reason for 2014 to open the account or do it ASAP? *I am guessing that if we do it now, we'd take advantage of savings for this tax year *(we have a combined gross of $150K +). Am I correct?
> 
> ...


The best time to invest in your TFSA (assuming you have contribution room) is when you have the money. Once the money is in the account, any gains are exempt from tax and you can decide how best to invest it. 

Regarding savings for this tax year, the only advantage would be no tax on whatever the money in the TFSA earns between now and the end of December. Unlike an RRSP, money you put into your TFSA is after tax dollars. 

Your TFSA contribution room for 2014 will be $5500 each.


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## AltaRed (Jun 8, 2009)

Siwash said:


> I am looking at Peoples - 3%! Seems like the best rate… We are planning to place some investments in a portion of what we are eligible for and then put the rest ion something like Peoples and GICs too…


PT is a deposit taking firm, i.e. HISA, GICs, etc. If you want some of your TFSA investments in equities, you need to go elsewhere for that, e.g. mutual funds with the asset management arms of the banks (for example but which I would strongly discourage), or a discount brokerage where the range of investment possibilities are relatively limitless and costs are lower. Personally, I don't believe in having accounts scattered all over the place to grab promo pieces here and there. My TFSA is in one location, in a discount brokerage. True, I don't get access to the best 'direct' GIC rates that deposit taking firms offer to some degree, but I have 'organized' finances.


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## Guban (Jul 5, 2011)

Where is the money now? If it is invested, then you will be paying taxes on it outside of a registered account. Get that money in a TFSA as soon as possible.


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## Siwash (Sep 1, 2013)

Guban said:


> Where is the money now? If it is invested, then you will be paying taxes on it outside of a registered account. Get that money in a TFSA as soon as possible.


It's sitting in the bank making a paltry 1% unregistered…


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