TFSA question

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Feb 11th, 2018 4:01 pm

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Feb 11th, 2018 9:59 am

realg123 [OP]: Deal Addict; Feb 22, 2007; 2241 posts; 363 upvotes; Toronto

Feb 11th, 2018 9:59 am

TFSA question

I have a question regarding TFSA contributions. I Googled this question but am still a bit confused.

I recently opened a Tangerine account. I was planning to move my savings from TD to Tangerines TFSA account.

At the moment I have about 3K sitting in TD' s TFSA.

My question is if I transfer money to my Tangerine TFSA, am I allowed to only transfer $2500? Or can I transfer more as long as it's under the cumulative limit ($57,500) without getting penalised

7 replies

Feb 11th, 2018 10:43 am

jsn23: Jr. Member; Jan 16, 2009; 173 posts; 96 upvotes

Feb 11th, 2018 10:43 am

You can transfer up to $57,500 into your TFSA account as long as the account balance was zero at the beginning of the year.

Since it was $3000 that you currently have you can transfer up to $54,500 into it this year. Just don't be withdrawing and adding to it multiple times per year. That is where people get caught and have a hard time keeping track of what their contribution limits are.

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Feb 11th, 2018 10:51 am

Nukey: Deal Addict; Dec 25, 2005; 1449 posts; 481 upvotes

Feb 11th, 2018 10:51 am

If you withdraw $3,000 from your TD TFSA, you regain that contribution room next year. You can check the CRA website for your current contribution room (noting that it may not be up to date for recent transactions). Assuming you originally contributed $3,000, since you have $54,500 of room there is no issue doing this unless you plan on maxing out your TFSA during the year.

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Feb 11th, 2018 10:54 am

mbg: Deal Guru; Apr 4, 2001; 11750 posts; 583 upvotes

Feb 11th, 2018 10:54 am

Not clear from your post, but if you are just transferring between TFSA accounts, you don't need to worry about contribution room if the money has already entered your TFSA - just make sure you do a direct transfer between accounts via the bank's process for doing that, rather than withdrawing from one place and depositing to another as separate self-directed transactions:

https://www.canada.ca/en/revenue-agency ... idual.html

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Feb 11th, 2018 11:27 am

Nukey: Deal Addict; Dec 25, 2005; 1449 posts; 481 upvotes

Feb 11th, 2018 11:27 am

mbg wrote: ↑ Not clear from your post, but if you are just transferring between TFSA accounts, you don't need to worry about contribution room if the money has already entered your TFSA - just make sure you do a direct transfer between accounts via the bank's process for doing that, rather than withdrawing from one place and depositing to another as separate self-directed transactions:

https://www.canada.ca/en/revenue-agency ... idual.html

Just to add to this, doing a direct TFSA transfer makes sense if you don't have the contribution room to withdraw the funds and contribute them to your new account. But, many banks hit you with a transfer fee which - depending on the size of your account - can make a transfer less (or not) worthwhile. TD charges $75 for a transfer out.

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Feb 11th, 2018 11:47 am

realg123 [OP]: Deal Addict; Feb 22, 2007; 2241 posts; 363 upvotes; Toronto

Feb 11th, 2018 11:47 am

Thanks everyone1

Nukey wrote: ↑ But, many banks hit you with a transfer fee which - depending on the size of your account - can make a transfer less (or not) worthwhile. TD charges $75 for a transfer out.

Is the transfer fee only if you move all your money? I will be keeping my TFSA in TD. But I'll be transferring most of my savings from TD to Tangerine. I will still keep a few hundred in my savings account in TD

Feb 11th, 2018 12:03 pm

Nukey: Deal Addict; Dec 25, 2005; 1449 posts; 481 upvotes

Feb 11th, 2018 12:03 pm

realg123 wrote: ↑ Is the transfer fee only if you move all your money? I will be keeping my TFSA in TD. But I'll be transferring most of my savings from TD to Tangerine. I will still keep a few hundred in my savings account in TD

The transfer fee only applies if you do a direct transfer of your TFSA to another location. If you just withdraw funds from the account and deposit elsewhere (as per my initial post), there is no fee.

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Feb 11th, 2018 4:01 pm

Barrakuda: Newbie; Jun 25, 2013; 40 posts; 22 upvotes; Calgary

Feb 11th, 2018 4:01 pm

realg123 wrote: ↑ Or can I transfer more as long as it's under the cumulative limit ($57,500) without getting penalised

Although you may have thought of this already, its worth stating - the cumulative limit of 57,500$ is assuming that you were 18 years of age or older as of 2009, and a Canadian Citizen at the time.

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