Investing

TD TFSA/GIC $100 offer - worth it for beginner?

  • Last Updated:
  • Jan 10th, 2020 10:28 am
[OP]
Newbie
User avatar
Dec 13, 2012
59 posts
29 upvotes
Toronto

TD TFSA/GIC $100 offer - worth it for beginner?

Hi folks, newbie question here.

TD's offer is $100 for opening a new TFSA and investing $1000 in a 1-year non-cashable GIC.

Is it worth it? As far as I understand you can't touch the 1k for a year, is that right? I have very little experience with investing and hoping for some of your feedback.

Thanks in advance!
9 replies
Deal Fanatic
Jul 1, 2007
8341 posts
1336 upvotes
Looks like a 10% return plus whatever the GIC pays. Is $100 worth all the effort though? What use is a TFSA that can only invest in cash and GICs?
Money Smarts Blog wrote: I agree with the previous posters, especially Thalo. {And} Thalo's advice is spot on.
Deal Addict
Mar 22, 2010
2541 posts
625 upvotes
non-cashable so you can't touch for 1 year.
Jr. Member
Dec 1, 2019
120 posts
94 upvotes
Assuming your finances are at a point where you can think about investing, great job getting here.

https://i.imgur.com/zlGnuDO.png

Bond ETFs and GICs typically have rates around the 2% - 3% mark, barely above inflation - and that's for the 5 year GICs.

Getting $100 for $1000 is great, and with a GIC it's CDIC insured, so if the bank failed you'd at least get the $1000 back.

In a broader sense, you need to figure out your risk tolerance and investment time frame. In general if you need the money in 5 years or under, you're better off with GICs, TFSA savings accounts, or bond ETFs.

In this situation if you are using the $1000 for an emergency fund, keep it in a savings account so you can draw on it on short notice. Otherwise go for it.
Penalty Box
Aug 17, 2013
679 posts
582 upvotes
Toronto
How much does it cost to transfer out? withdrawal? close the account?

I'm sure it will cost more than the 100 they give you. Never worth unless you have an account there already and plan to keep it for a while.
Deal Addict
Jun 18, 2018
1010 posts
578 upvotes
Toronto
Obviously 10% return is good, but not worth the time or effort for $1k (in terms of opening and closing the account later). Unless you have plans to bank there I suppose...
Deal Fanatic
Jul 1, 2007
8341 posts
1336 upvotes
Best question to ask the bank is how easily you can transfer it to a TD Direct Investing TFSA.
Money Smarts Blog wrote: I agree with the previous posters, especially Thalo. {And} Thalo's advice is spot on.
Deal Fanatic
Oct 7, 2007
6256 posts
2501 upvotes
If OP wanted to withdraw the funds when the GIC matures, could he just withdraw the funds as opposed to doing a transfer to save himself any "transfer out" fees? This is one of the burning questions I have because those transfer out fees are a dealbreaker for me.
Member
May 18, 2017
387 posts
177 upvotes
Toronto, Ontario
the offer doesnt have to be a GIC, can be a TD fund.

Qualifying Product(s)
TD Canada Trust non-cashable Guaranteed Investment Certificate (GIC) with a maturity of 1 year or more.
An eligible TD Mutual Fund or TD Managed Assets Program portfolio; and a Pre-Authorized Purchase Plan ("PPP") in the New RRSP or New TFSA, with a minimum monthly investment of $25 by February 9, 2020. The first PPP transaction must be made by March 2 , 2020, and the PPP must be maintained until April 30, 2020.

https://www.td.com/ca/en/personal-banki ... offer-100/
Deal Addict
User avatar
Feb 1, 2012
1216 posts
1524 upvotes
Thunder Bay, ON
Have to check with TD. Normally there will not be any transfer out fee for non-registered accounts. RRSP or TFSA usually have a transfer out fee, that depends on the bank or broker, somewhere between $50 (for banks) and $135 (for brokers).

With a TFSA you can withdraw (rather than transfer) late in the year then deposit into another financial institution the next year. Or if you have extra contribution room, just withdraw from one and redeposit to the new one the same year. If you withdraw from a TFSA you don't get that room back until the next year.

Also from experience I know that TD does not charge a registered transfer to move a TFSA from TD Canada Trust to TDDI.

Check with the bank to be sure.
I solemnly swear, to never assume I have an inkling at which direction the market will head, and to never make any investments based on a timing strategy.

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