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Canadian Banks and TFSAs

Posted by phduffy on 2009-06-30 11:43:07
8 forum posts
So last January the government of Canada introduced Tax Free Savings Accounts, which let you put in $5,000 of after-tax income, and it grows tax free, and you don't pay tax on it when you take it out.

Great, this is a nice place to park your layoff/new car/whatever fund. Surely the 5 Canadian banks will take advantage of this and offer TFSA accounts, right?

Well, right and wrong. My bank, CIBC has a variety of TFSAs… they have a flexible GIC, and non-flexible GIC, some other GIC…. The best I could find was one where they'd give you 1.90% if you locked in for 5 years. I did a very basic calculation on this, and if you assume a 40% tax bracket, you save about $38 a year. (it's a little more complicated than that, but it's $38 a year in the first year).

Now, what I'd actually like to do is open a self-directed TFSA… but CIBC doesn't offer that! Despite the fact that I have a self-directed RRPS with them, I can't get a self-directed TFSA. So I looked at other banks. And what bank is known for its customer service, and doing what the big banks won't, then ING?

ING does not offer a self-directed TFSA. They have a mutual Fund TFSA you can invest in, but I'm not paying anyone 1.5 to 2% to manage my money when I can do that myself. So I Googled it, and apparently an organization known as Questrade offers a self-directed TFSA and has very low fees. However, they also apparently have terrible customer service, so I'm not sure that I want to go there.

Question: Does anyone here have a TFSA? What kind? Does your bank offer self-directed TFSAs? I believe that TD does, although the fees are higher than Questrade.

Honestly, I'm thinking about switching banks over this, so if your bank has a self-directed TFSA and you think it's decent, let me know.
  8 forum posts