TD e-series TFSA questions

[Rroo]

I have made an appointment for next week with TD to open up a TFSA e-series account. I am not currently a TD client.
I realize that I have to first open up a mutual fund account and then convert it to e-series (I have printed off the conversion form to take in). When I open the account, is it best to open it with the index funds (in the investor series) that I would like to own once it is converted? Or what should I hold in the time before it is converted? Or do I have to choose anything before the conversion?
I want to contribute the full $5000/year allowance and will be using this for retirement. I am 30 years old. I am wondering how many index funds I should purchase and what a good allocation would be for my situation.
I also want to do the pre-authorized purchase plan and am wondering if it is best to do weekly or bi-weekly, or is there really a benefit of one over the other? Also, if $25 per fund is required per purchase and I want to contribute $5000/year, what ‘schedule’ do you recommend?

Thanks for all your help!

[AllWheelDrift]

I helped my wife open and TD e-series RRSP account. We showed up with the rejected application for not being an existing TD client and as expected the rep was clueless about the e-series. We got her to open a regular TD RRSP account, and we didn't make any contributions, then went home and filled out the form to convert the account and sent it in. The account remainded empty until after it was converted. Then we set up the pre-authorized purchase plan of e-series funds via easyWeb.

As to what funds you should buy, assuming you are investing for long term, some split of the e-series: Canadian Bond Index, Canadian Index, US Index, and International index is what I'd recommend.

If you have the 5k, I'd do a lump sum contribution at the start of each year for the most tax benefit, though if you want to take advantage of dollar cost averaging you should consider making that lump sum contribution to a money market fund, then switching to the other funds bit by bit over the year.

Otherwise you should figure investing into 4 funds (3 if you decided you don't need a bond componenet yet) at $25/each, that's 100/period, so weekly would be 52 weeks * $100 $5200 which puts you over the limit. (well, not for this year since you've missed part of it already, but might as well pick a shedule that you don't need to change next year and instead "catch up" on this year when you can.) The most frequent you're looking at is probably bi-weekly, but it might be best to just match it up with your pay period, otherwise the money is just sitting somewhere while you "wait" for it to be invested, earning nothing or taxable interest.

[Jobu]

I have made an appointment for next week with TD to open up a TFSA e-series account. I am not currently a TD client.
I realize that I have to first open up a mutual fund account and then convert it to e-series (I have printed off the conversion form to take in). When I open the account, is it best to open it with the index funds (in the investor series) that I would like to own once it is converted? Or what should I hold in the time before it is converted? Or do I have to choose anything before the conversion?
I want to contribute the full $5000/year allowance and will be using this for retirement. I am 30 years old. I am wondering how many index funds I should purchase and what a good allocation would be for my situation.
I also want to do the pre-authorized purchase plan and am wondering if it is best to do weekly or bi-weekly, or is there really a benefit of one over the other? Also, if $25 per fund is required per purchase and I want to contribute $5000/year, what ‘schedule’ do you recommend?

Thanks for all your help!

I wouldn't bother buying any funds until converted -- it only takes a few days, max a week. You don't need to put anything into it prior to conversion.

As for when to invest, I do it bi-weekly to match my paycheques. There's no real right answer as to when/how often to invest, though the law of dollar-cost averaging would suggest to periodically invest unless you can predict where the market troughs and peaks will be.

[alvisblue]

I probably will just open TD Waterhouse TFSA directly, since they have the option to choose eStatement to waive the administration fee. Therefore no extra cost compared with TD mutual-fund account.

But it has several advantages:

1) No need to convert mutual funds account or do other works.

2) You can purchase both investor series (I) and e-series (e) at your choice and no need to worry about selling funds and reduce your TFSA limit in case to lock in profit, the proceeds will stay inside the TFSA account as Cash. You can buy money-market fund later (I series) or buy GIC inside TD Waterhouse.

3) When you build up enough amount inside your TFSA account, you may consider buying ETF instead of mutual funds, which has lower MER and has more options like long funds or short funds. You can earn money whether market is down or up. In current market situation, I would not hold any mutual funds longer than 6 months due to such high volatility. If you have profit, you must act quickly, otherwise it will gone in a few weeks.

[Rroo]

I probably will just open TD Waterhouse TFSA directly, since they have the option to choose eStatement to waive the administration fee. Therefore no extra cost compared with TD mutual-fund account.

But it has several advantages:

1) No need to convert mutual funds account or do other works.

2) You can purchase both investor series (I) and e-series (e) at your choice and no need to worry about selling funds and reduce your TFSA limit in case to lock in profit, the proceeds will stay inside the TFSA account as Cash. You can buy money-market fund later (I series) or buy GIC inside TD Waterhouse.

3) When you build up enough amount inside your TFSA account, you may consider buying ETF instead of mutual funds, which has lower MER and has more options like long funds or short funds. You can earn money whether market is down or up. In current market situation, I would not hold any mutual funds longer than 6 months due to such high volatility. If you have profit, you must act quickly, otherwise it will gone in a few weeks.

Now I am confused! I thought that the e-series TFSA was no fee (other than MER of course)??

[hsedin]

Now I am confused! I thought that the e-series TFSA was no fee (other than MER of course)??

There are no fees associated with the TD efunds account, all you are paying is the MER. The only "condition" that you have to be aware of is that other than the e-series money market fund, you have to hold the e-series units/funds for at least 90 days to avoid early redemptoin fees. The usual "standard" for most TD / other mutual funds is 30 days. The quote from the TD site :

** An early redemption fee may apply if this Fund is redeemed or transferred within 30 days of purchase. (90 days for certain e-Series units). Please see the Fund’s Prospectus for details. **

I believe the redemtpion fee may be as high as 2% of your fund's value.

Also, the dividends are automatically re-invested into the same corresponding e-funds. So you don't have to worry about doing it manually.

[AllWheelDrift]

Now I am confused! I thought that the e-series TFSA was no fee (other than MER of course)??

The poster was talking about a TD Waterhouse TFSA account (which also alows the purchase of e-series funds) rather than an e-series TFSA mutual fund account.

[Jungle]

I probably will just open TD Waterhouse TFSA directly, since they have the option to choose eStatement to waive the administration fee. Therefore no extra cost compared with TD mutual-fund account.

But it has several advantages:

1) No need to convert mutual funds account or do other works.

2) You can purchase both investor series (I) and e-series (e) at your choice and no need to worry about selling funds and reduce your TFSA limit in case to lock in profit, the proceeds will stay inside the TFSA account as Cash. You can buy money-market fund later (I series) or buy GIC inside TD Waterhouse.

3) When you build up enough amount inside your TFSA account, you may consider buying ETF instead of mutual funds, which has lower MER and has more options like long funds or short funds. You can earn money whether market is down or up. In current market situation, I would not hold any mutual funds longer than 6 months due to such high volatility. If you have profit, you must act quickly, otherwise it will gone in a few weeks.

This sounds like a great idea, just wondering, what are long and short funds for the td ETF? And don't you have to pay brokerage fees for this fund to trade?

[BTron]

I probably will just open TD Waterhouse TFSA directly, since they have the option to choose eStatement to waive the administration fee.

+1 for sure

Although I already had a Waterhouse account for non-registered investment, my Waterhouse TFSA was opened in a week. You can invest anything you want in it, including e-series, so I don't know why you'd limit yourself with a regular RRSP or TFSA account. If in two years you feel more comfortable (or foolish depending who you ask) and what to invest in other securities, you'd then have to open a new Waterhouse TFSA account and do the transfer all over again, when you could have just had one for free from day 1.

[Jungle]

Can anyone confirm if there are comission fees to BUY e series mutual funds inside td waterhouse? (not maintenance fees). Thank you.

[jchanq]

Can anyone confirm if there are comission fees to BUY e series mutual funds inside td waterhouse? (not maintenance fees). Thank you.

No commission to buy e series. It's free.

[macsp]

Can someone please confirm that TD e-series funds are only available through TDW and not through any other brokerages? I am planning to open TFSA with iTRADE and not sure if I can buy TD e-series funds there.

Thank you!

-macsp

[asdfvcx]

Can someone please confirm that TD e-series funds are only available through TDW and not through any other brokerages?

They can be bought through a special eFund account available directly from TD Mutual funds, and any account in TD Waterhouse. That's it, no other options.

[jobby]

What are the fees for maintaining and trading funds through TDW. For the time being I am looking for just e-series.

[Lyrrad0]

What are the fees for maintaining and trading funds through TDW. For the time being I am looking for just e-series.

None for a non-registered account if you sign up for eServices (and are below a certain account value)

There are yearly fees for RSP TDW accounts if you aren't above a minimum balance.