Free $50 Fee Credit For Transferring Your TFSA To Ally

I was just sent this e-mail about an offer from a financial institution called Ally. From what I read, they are offering TFSA account holders with other banks up to $50 to switch to them in order for you to recoup any transferring fees that your bank may charge for the switch.

I suppose the biggest incentive is that if you were thinking of switching it looks like they offer one of the highest interest rates at 2% atthe moment. I have personally never tried this company myself. However, I figured there are probably a lot of people that are looking for options and this may be one of them.

I’m not sure if someone in-the-know wants to clarify this too, but to my understanding the $50 is to simply recoup any transferring fees as opposed to simply getting a free $50 for transferring the account.

Apparently the offer ends at the end of this month:
http://learn.ally.ca/transfer/

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.

CIBC TFSA Interest Rate

The official tax free savings account interest rate for CIBC appears to be 3% as you can see here:

Similar to the information provided before too, there is a hefty $100 fee should you decide to transfer some or all your funds to a different financial institution. So for this bank you should really think it over before signing up.

I guess the main benefit is that if you already do your daily banking with them then it can make sense to keep everything in one place.

Termination And Bank Transfer Fees For Your TFSA Account

There is an important point about choosing the bank that you are most comfortable with in opening your new tax free savings account which I heard about today. Generally speaking, like most people I am looking for a bank that will provide the best interest rate and other factors to make sure that I am getting the best return.

As a result, like most people I am susceptible to those flashy ads that some banks are using which indicate that they are offering a very high interest rate. However, it is important to keep in mind that in the fine print most of the banks say that its rates can change at anytime. Example, you could have signed up with a rate that looked like the highest of all the banks only to see it drop in the near future.

Then, you might be thinking that it is better to transfer your money to a different bank. While reading some banking fees though, such as for TD Waterhouse’s TFSA plan, they have an insanely high “$125 for a termination/transfer fee”. Essentially, you could almost be making nothing if you decided to transfer as a result of that fee.

Because of this, it is very important to make sure that the bank you are going to sign up with doesn’t have a history of dropping rates once they feel that they have acquired enough accounts. Don’t just rely on what interest rate they are wiling to offer you now.