Personal Finance

Tangerine TFSA Kick Start Account - earn Double Interest

  • Last Updated:
  • Oct 14th, 2017 11:01 am
[OP]
Member
Sep 12, 2012
350 posts
77 upvotes
Toronto/Markham

Tangerine TFSA Kick Start Account - earn Double Interest

Tangerine has opened up their annual TFSA Kick Start account where you can earn double the interest on money placed into this account.

I was wondering, since the 2018 TFSA contribution limit is $5,500 can we deposit more than $5,500 into the Kick Start account to earn double interest? Or does Tangerine only pay the double interest up to a principle amount of $5,500? I wanted to see what people's past experience's were like with this account.

https://www.tangerine.ca/en/products/sa ... t-account/
18 replies
Member
Jan 19, 2017
484 posts
128 upvotes
hamandcheese wrote:
Oct 12th, 2017 11:52 am
Tangerine has opened up their annual TFSA Kick Start account where you can earn double the interest on money placed into this account.

I was wondering, since the 2018 TFSA contribution limit is $5,500 can we deposit more than $5,500 into the Kick Start account to earn double interest? Or does Tangerine only pay the double interest up to a principle amount of $5,500? I wanted to see what people's past experience's were like with this account.

https://www.tangerine.ca/en/products/sa ... t-account/
The base rate is only 1%. So you would get 2% for double. Unless you didn’t get the fall bonus rate of more than 2% until Dec. 31, it is useless.
[OP]
Member
Sep 12, 2012
350 posts
77 upvotes
Toronto/Markham
ml88888888 wrote:
Oct 12th, 2017 12:18 pm
The base rate is only 1%. So you would get 2% for double. Unless you didn’t get the fall bonus rate of more than 2% until Dec. 31, it is useless.
Doesn't the fall bonus rate only apply to new deposits? Which means my money prior to any new deposits get only the 1% interest? I'm looking to move money already sitting in a 1% savings account to the new Kick Start account but want to know if I transfer more than $5,500 does my principle amount greater than $5,500 receive the double interest?

Plus the fall bonus rate only applies to a maximum of $500 per savings account.
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Dec 17, 2008
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hamandcheese wrote:
Oct 12th, 2017 3:47 pm

Plus the fall bonus rate only applies to a maximum of $500 per savings account.
Actually $500,000 (missed a few zeroes)
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[OP]
Member
Sep 12, 2012
350 posts
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Toronto/Markham
Shawguy wrote:
Oct 12th, 2017 4:09 pm
Actually $500,000 (missed a few zeroes)
Sorry, you are correct.
Deal Addict
Mar 8, 2013
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This would be an interesting offer if there were no alternatives. Tangerine is counting on people depositing $5500 (next year's limit) now and then leaving it there earning 1% in 2018 because any withdrawal doesn't create contribution room until 2019. This is not a good use of TFSA contribution room.
Member
Mar 14, 2010
237 posts
94 upvotes
Toronto
I agree with akaManny. Tangerine's regular rate of interest for TFSA accounts is pathetic. PLUS, Tangerine will charge you money if you transfer your account elsewhere. Tangerine can be good for investors with regular savings accounts but is not for RRSPs or TFSAs.
Newbie
Aug 23, 2017
69 posts
50 upvotes
Quebec
The double interest is to off-set the tax payable in the non-registered account before the new year. If you have not already maximized your contributions for this year and all previous years ($41000), then you're better-off putting the money directly in your TFSA anyway, so for the vast majority of people (only a very small proportion of the population has a maximized TFSA) the kick-start account is useless.
Member
Mar 14, 2010
237 posts
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Toronto
jimprdx wrote:
Oct 12th, 2017 8:26 pm
The double interest is to off-set the tax payable in the non-registered account before the new year. If you have not already maximized your contributions for this year and all previous years ($41000), then you're better-off putting the money directly in your TFSA anyway, so for the vast majority of people (only a very small proportion of the population has a maximized TFSA) the kick-start account is useless.
Yabbut Tangerine's regular rate ( after December 31) is locked in and their regular interest rate is less than other online banks offer. AND, Tangerine will charge you a fee to transfer your TFSA savings to one of those superior provider such as Peoples Trust ( which is currently paying 1.65% (versus Tangerine's reg rate of 1%) and charges no transfer fees if you want to move your funds at a subsequent time).
Last edited by pickles02 on Oct 12th, 2017 8:41 pm, edited 1 time in total.
Deal Addict
Jun 12, 2015
1808 posts
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Ontario
Why not just withdraw in Dec, and move the money to somewhere you want in Jan. Only down side is won't get paid interest yet and lose out of growth but w/e it's only 2% not much.
[OP]
Member
Sep 12, 2012
350 posts
77 upvotes
Toronto/Markham
akaManny wrote:
Oct 12th, 2017 7:44 pm
This would be an interesting offer if there were no alternatives. Tangerine is counting on people depositing $5500 (next year's limit) now and then leaving it there earning 1% in 2018 because any withdrawal doesn't create contribution room until 2019. This is not a good use of TFSA contribution room.
This is a good point.

But this would only be an issue if you max out your contribution room each year (which I dont). So the plan is to take advantage of the double interest, withdraw the funds out of my TFSA on Jan. 2nd and move my money else where. I have enough contribution room to deposit $5,500 twice in 2018.
Member
Aug 20, 2015
223 posts
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Toronto
hamandcheese wrote:
Oct 13th, 2017 8:36 am
This is a good point.

But this would only be an issue if you max out your contribution room each year (which I dont). So the plan is to take advantage of the double interest, withdraw the funds out of my TFSA on Jan. 2nd and move my money else where. I have enough contribution room to deposit $5,500 twice in 2018.
If you're willing to go through all this work why not just open an EQ account and get 2.3%. This rate just gives you 2% for less than 2 months.
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tsingoo wrote:
Oct 13th, 2017 11:31 am
If you're willing to go through all this work why not just open an EQ account and get 2.3%. This rate just gives you 2% for less than 2 months.
Or just wait a couple of weeks as Simplii is bound to have an offer better than 2.3% starting Nov 1st.
Member
Aug 20, 2015
223 posts
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Toronto
scoper wrote:
Oct 13th, 2017 12:54 pm
Or just wait a couple of weeks as Simplii is bound to have an offer better than 2.3% starting Nov 1st.
It's a free account, just open it and move money to where ever the best rate is. That way you're not stuck hoping for a good promo rate from tangerine or simplifi.
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Nov 25, 2014
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Newton Brook, ON
jimprdx wrote:
Oct 12th, 2017 8:26 pm
The double interest is to off-set the tax payable in the non-registered account before the new year. If you have not already maximized your contributions for this year and all previous years ($41000), then you're better-off putting the money directly in your TFSA anyway, so for the vast majority of people (only a very small proportion of the population has a maximized TFSA) the kick-start account is useless.
Maybe the majority of people should be putting their money into TFSA eligible accounts that pay higher than Tangerine, but not because the kick-start account is useless.

Basically, your logic assumes we pay 100% tax, which of course no one does.

Let's say tax is 30%. You pay 0.3% of what's in your kick-start account from its 1% interest. You get double the interest next year, in your TFSA, so no tax on the bonus. Total effective rate = 1.7%.
You need someone with an umbrella not a fork

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