Withdrawing TFSA Funds Instead of Transferring To Avoid Fees

As expected I have been hearing a lot of negative vibe about the business/marketing practices of certain financial institutions that have suddenly dropped its tax free savings account interest rates. As a result, many people do not want to move their funds out of the account as well as their provider charges a fee to do so.

One way to avoid these transfer fees is to just simply withdraw your money when your term is up. Example, if you wanted to move $5000 from Financial institution A to Financial institution B, instead of requesting a transfer just withdraw all of our funds before the maturity date and manually deposit it into your new bank of choice.

PC Financial is a great example as they charge a hefty $50 transfer fee and this way you can avoid it.


Comment  on February 13th, 2009

My understanding is that once you withdraw money from a TFSA account, you can reinvest the same amount of money only the following year.

TFSA  on February 13th, 2009

If you take say $500 out this year you can still put the $500 back in your tax free savings account to earn more interest. However, transferring that fund with a different financial institution is a different story as most banks indicate that they have a fee attached with that.

Alex  on April 23rd, 2009

Don’t do that – don’t withdraw if you have to re-invest the same year and you have reached your limit. Withdrawal creates room for following.

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