So it looks like CIBC took a hit today as its tax free savings account interest rate fell. Not surprisingly, it has dropped to the widely adopted figure of 2.25% as you can see here:
It’s almost like all the big banks have a discussion with each other ahead of time to determine a universal rate huh?
I got a message from Matty recently who sent in the following question:
I’ve heard conflicting replies to the following question.
Does your contribution room accumulate in years where you have not yet opened a TFSA account? For example, if I don’t open an account until 2010, will I have $10,000 in contribution room (from 2009 and 2010) or will I only have $5,000 of contribution room (from 2010 only)?
Thanks!
Based on the information available, if you don’t open an account until 2010 then your contribution room should be the $10,000 as you will get the $5000 boost every year (Assuming you meet all the requirements such as you are over 18 as that is one of the requirements of a TFSA). This should also be displayed on your notice of assessment each year as it will tell you how much you can contribute too.
ING Direct definitely had one of the higher interest offerings at 3% initially and just recently the rate has been reduced to 2.3% as you can see here:
The rate is still higher than most other financial intuitions I suppose which is the good thing as a lot of other banks seemed to have adopted a 2.25% rate.
I guess this is one of the last round of large banks who has officially decreased its tax free savings account interest rate. BMO originally had a 3.0% interest rate and as you can see here today that has apparently dropped to 2.25%
So by the looks of it people were only able to enjoy a one month rate of the initial 3%. Although, one good thing is this bank apparently had no transfer fee. So if you were thinking of switching then you can do it without too much worry.
I’m not sure how I missed this before, but Scotiabank is holding a contest where everyday it is giving away $5000 through random draws. You can enter the contest at this page https://5000aday.scotiabank.com/
From what I see you don’t have to have a TFSA account with them initially to enter the contest. As well, the terms seem to indicate that they simply cut you a cheque payable to your name. So in that sense I guess you could use it for anything and not necessarily just for a TFSA account. I personally never won that much money before, but I suppose since they are choosing a winner everyday it doesn’t hurt to try and I got the following e-mail afterwards:
“Thank you for entering the $5,000-a-day TFSA Give-away. Your entry has been successfully submitted and your name entered into the draw.
Whether you’re just starting a savings plan, have taxable investments or are retired, there’s something for everyone with a Tax Free Savings Account. You can:
- Contribute up to $5,000 each year starting January 2009.
- Choose from a range of investments like mutual funds, savings accounts, and GICs.
- Withdraw from your TFSA at any time, for any reason and all withdrawals are tax-free.All income (interest, dividends and capital gains) earned in your Scotia TFSA is tax-free for life.
Learn more about how a Tax Free Savings Account can work for you, and open yours today!”
This one was to surprising to me as I expected the bigger banks to drop its interest rates sooner or later. I guess you can add RBC to the mix as its new rate is 2.25% compared to its original 2.5%
The rate is kind of interesting as it is in-line with Outlook Financial’s change that I posted today as well. Makes you wonder if there is a certain reason why financial institutions or banks would be favoring that number.
Looks like this financial institution has recently had a significant drop in its interest rate. Outlook Financial originally had a pretty high 2.8% offering and as you can see here that has dropped to 2.25%.
That’s a loss of 0.55%. This is the first credit union I have seen where the interest rate has taken a dive so far.
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