This article has 75 comments

  1. Good list!

    All I can say about TD’s fees – is wow – they are truly awful. There are so many good no-fee options out there…

  2. Really good Q&A CC. It’s appreciated. I think I’m leaning towards PC or ING at the moment for mine & my gf’s.

  3. Question about withdrawal room and carryover: what about a situation in which someone withdraws 3000$ Dec 1? Do they get the tax-sheltered growth still, plus 8000$ room Jan 1?

  4. Thanks for answering some of the key tfsa questions, I think i am going to use Ing for my own tfsa and then maybe move to other things like mutual funds when my contribution room expands.

  5. Here’s TDW’s TFSA form (print out and mail or visit branch)

    If you sign up for e-Service, it’s really free so I don’t have a problem with it, and having a Brokerage TFSA is much more useful than a GIC/Mutual Fund one

  6. Guys what exactly is the e-Service for TD? Do you mean their Web-broker?

  7. I guess that will need to be claimed on my income taxes,or do they have another way of keeping track of the comings and goings of the money?I assume it isn’t on the honour system.

    I have an account with Credential Direct,their website says no annual fee.I think I’ll shall sign up for that.

  8. Yep, indeed Credential has announced their TFSA too… no annual fee, no withdrawal fees ever, $125 to transfer out. Only offered in $Cdn for now. So I’m sticking with em for now.

  9. Great Q&A post! I guess I will stick with ING to hold my savings for real estate investment in near future.

  10. Ernie: The situation you describe is correct. If you make a withdrawal on Dec 1 the contribution room increases by the withdrawal amount plus the regular yearly contribution room on Jan 1. So it is possible to use a TFSA as a Christmas shopping fund. 😉

  11. I ran into a little snag with ING on this. ING has a well-publicized deal where you can set up your TFSA with them in 2008 and they will roll it over into an official TFSA on 1 January 2009, doubling your interest to make up for the fact that you’ll have to pay taxes on any interest earned in 2008.

    The catch is that the interest you earn in 2008 is apparently counted toward your $5,000 contribution limit. I learned this when I tried to top off my TFSA account last week to bring it up to $5,000, and ING wouldn’t let me because I had already earned some interest on my previous contribution. To play it safe I topped off at $4,900. Once my interest for December is paid I’ll know exactly how much room I have left, although I’m not sure if the “doubled interest” that ING will pay will count toward my contribution or not, we’ll have to see.

  12. Brad – that is interesting – my wife put $5k into her ing tfsa so I’m not sure what will happen with the interest.

    I would assume the interest earned in 2008 will stay in the open account (where it is now).

  13. Thanks for the FAQ.. was just thinking this morning that I’d like to do some more research on these TFSA’s.. one thing I’m wondering however, as a trader… does it not make good sense to open up a TFSA with an broker, and then use it to trade from.. any money I make (off of the 5,000) I can withdrawal at any time tax free?

    So hypothetically.. heh heh.. if I was to turn my 5K into 20K.. perhaps I invested in a call option which skyrockets… I can take that 20K out tax free? Also, and I think this is covered in the FAQ, but would I be able to re-contribute in the same year? or would it make more sense to just take out the profits, and then try to do it again or something?

    A lot of hypotheticals in there.. but just trying to get the overall idea.

    Thanks guys.

  14. Interesting comment Brad. Like Mrs Pillars we put $5k on the nose into two TFSAs at ING with no issues. I seem to be getting interest in that account regardless (a big fifteen bucks per account to date, woohoo!).

    TD’s fees are brutal.

  15. I think my problem was that my money went into ING in a few instalments, so when I tried to deposit my last instalment (which would have put my total contribution for the year at $5K), I got an error message from ING saying that the total value of my account cannot exceed $5K (and it would have, since I had earned some interest already on my previous instalments). I suspect this is an error on ING’s part but I’m sure I’m not the only one who’s encountered it.

  16. RBC hasn’t listed any fees but Royal Direct Investing has suggested that normal trading commissions will apply.

    These seem like high fees for only $5,000.

  17. Canadian Capitalist

    Mike: TDW fees seems to be par for the course. In fact, it is better than BMOIL because you can get the admin fees waived by signing up for e-Services and the first withdrawal is free.

    Ernie: The withdrawal and contribution limits are based on calendar year, so your scenario is kosher.

    Remus: e-Services is where monthly statements and transaction confirmations are sent by email and also available on the TDW website. I found it to be very convenient anyway because I was drowning under a mountain of brokerage statements.

    Hazy: CRA will keep track of contribution room. Withdrawals will be reported by institutions to the CRA. It certainly isn’t an honour system 🙂

    Charles: Credential Direct sounds like a winner. We’ll have to wait and see how other accounts stack up.

    Brad: That’s interesting. I suppose ING is building in some room so as not to run afoul of contribution limits.

    lencurrie: Yes, of course. If you can take in $5K and grow it to $20K, it’s entirely tax-free. You can take out that $20K but you won’t be contribute it in that year but will be added to your available contribution room in the next year.

    Alois: It’ll be interesting to see RBCDI’s fee structure for TFSA because all our other accounts are there. But like many others, our first TFSA accounts will be with ING.

  18. After learning about TDW TSFA, I am simply thrilled. I am going to sign up for TDW TSFA and use eServices, so that I won’t have to annual account fees. TDW TSFA gives me access to TD e-series and I am ecstatic about it.

    lencurrie: Yes, you will be able to take 20k out tax free. TDW TSFA does allow you to trade options. It is in the application form.

    guinness416: I have to disagree. I won’t be paying account fees with TDW eServices. TDW TSFA is probably one of the best out there. TD e series and discount brokerage all in one is very difficult to beat. All right, I concede that TDW does charge a lot for a trade, but trading is bad for one’s health anyways.

  19. One thing about lencurrie’s comment. I don’t think that options are a valid investment inside a TFSA. I’m not totally sure on that but if options aren’t allowed inside an RSP they aren’t allowed inside a TFSA either…

  20. Any idea if there is an age limit to qualify for the TFSA? For example, if I have a 6 year old child, will they have $60,000 of contribution room when they turn 18, assuming they make no contributions between now and then?

  21. TFSA’s are eligable for people 18 and older. Contirbution room starts at 18

  22. Very nice post MDJ, good information. Thank you.

  23. Please read CC instead of MDJ in my previous comment. I love both blogs.

  24. OxCC: You can buy calls, buy puts, and sell covered calls in a RRSP. Presumably it will be the same for TFSA

  25. Maybe I am missing something, but it looks like ING currently offers 2.7% interest rate compared to 3.75% at PC Financial (PC doe s not offer early start like ING does). Any ideas why such a spread in rates?

  26. Thanks for correcting me DK. For some reason I thought that options weren’t allowed in an RSP. After seeing your comment I did a little bit of looking around and it seems that options are in fact allowed in an RSP which should mean they are allowed in a TFSA as well.

  27. Jerry already gave the link for the TD Waterhouse TFSA application form… but I’d like to note that the fee schedule is included in this document.

    Again, the link is

  28. @CC concerning lencurrie’s comment: Sure, your available contribution room will be 20k$ more…. if you had made at least 20k$ worth of contributions in the past. At least, that’s my understanding of the rules.

    Here’s a *very* hypothetical scenario to make my point more evident. Let’s say in the next 5 years you put 5k$ each year. Let’s also say that you are *extremely* lucky with my investing and that at the end of the fifth year, my account as 125k$, having made a gain in capital of 100k$ during the same five years…. not too shabby 😉 . Now, I could get all the money (125k$) out tax free at the end of year 5. What would be the new contribution room in year 6? Not 125k$ + 5k$…. I really doubt it…. it probably would be 25k$ (past contributions) + 5k$ (year 6 contribution) = 30k$.

    So what do you think…. Is the answer 130k$ or 30k$?

  29. Full Flexibility to Withdraw and Re-contribute
    From the Canada budget 2008 TFSA pamphlet:

    * Gillian saves $3,000 a year for 10 years in a TFSA. She decides to start a small business and withdraws $40,000 of her TFSA savings, tax-free. Later, Gillian decides to re-contribute the $40,000 to her TFSA. She may do so without reducing her other available contribution room.

    So Carl the answer for you is $130k.

  30. @ Derek: Thanks for the quote. Wow! I wasn’t expecting that answer. It really is flexible.

  31. @Four Pillars
    I contributed $5000 to a TFSA at ING direct in October. I asked ING Direct what would happen to the interest that is earned on it between now and January 1. They told me it would be transferred to my ING savings account and that if I did not have one then one would be created for me.

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  35. My question relates to FAQ #1. Say that scenario is true. Additionally, at Bank A I have a straight TFSA Savings Account and Bank B is a self-directed TFSA.

    Can I move money between those two TFSA accounts? Or once it comes out of Bank A is that considered a withdrawal and I can’t recontribute it to Bank B until next year? If possible I’d like a reference to the answer, too.

    Basically my plan is to put my money into a TFSA Savings account in January and keep watching the stock market and when I see fit, pounce on a couple stocks. So really I plan on putting all $5,000 into Bank A and then transferring it (or a portion of it) to Bank B sometime during the year.

  36. Canadian Capitalist

    Vern: You cannot withdraw from Account 1 and contribute to Account 2. But, you can transfer out of Account 1 into Account 2. Typically, self-directed TFSAs will charge you a transfer fee but TFSA accounts like with ING Direct won’t. So, yes, you can do exactly what you describe with an account transfer but make sure there will be no fees. Also, transfer’s usually take some time. My experience with RRSPs is that transfers typically take about a week, but FIs say it could take up to 6 weeks.

    (I don’t have a reference. I’m travelling and short of time).

  37. Quote:
    28 Carl // Dec 4, 2008 at 2:04 am

    @CC concerning lencurrie’s comment: Sure, your available contribution room will be 20k$ more…. if you had made at least 20k$ worth of contributions in the past. At least, that’s my understanding of the rules.

    Here’s a *very* hypothetical scenario to make my point more evident. Let’s say in the next 5 years you put 5k$ each year. Let’s also say that you are *extremely* lucky with my investing and that at the end of the fifth year, my account as 125k$, having made a gain in capital of 100k$ during the same five years…. not too shabby . Now, I could get all the money (125k$) out tax free at the end of year 5. What would be the new contribution room in year 6? Not 125k$ + 5k$…. I really doubt it…. it probably would be 25k$ (past contributions) + 5k$ (year 6 contribution) = 30k$.

    So what do you think…. Is the answer 130k$ or 30k$?

    **Let me get this right…With reference to the above post, would you not have already paid the tax on the $100,000 over the contribution limit? Also, Do they cut you off after you have reached you $5,000 Or can you just continue to contribute and pay the significantly reduced tax rate?

  38. Thanks Canadian Capitalist.

    Comparison Question:

    It seems to me that the ING Direct TFSA gets a lot of promotion on this site. I’ve been looking at the PC Financial TFSA and can’t figure out why it’s not better? It’s 1.05% better than ING (3.75% vs 2.70%) and also has no fees for withdrawing. Granted, if I’d opened an account earlier there’d be the chance to earn interest between Oct and Dec 31 for ING, but other than that what other points make ING more attractive than PC?

  39. Thank you for the great post! I tried looking for an answer to the following question through your other posts and comment posts, but have been unsuccessful.
    My plan is to transfer $5000 worth of stocks that I currently own through the TD Waterhouse brokerage to their TFSA account. What I’m wondering about though how does the loss of value of the stocks that I own impact my contribution room. For example, if the stocks that I own perform horribly and the book value of my stocks goes down from $5,000 down to $3,000 by year end. Does this mean on Jan 1st, 2009, I will be allowed to contribute $5,000 + the $2,000 that I lost in the market, for a total of $7,000 contribution limit in 2009?

    If this is not the case, for argument sake, let’s say that the $2,000 dollars I lost was due to a company that I owned shares in going bankrupt; does this mean that I have lost the $2,000 contribution room forever?

    Thank you in advance!

  40. Sorry for the typo in the above post, that’s supposed to be Jan 1st of 2010, not 2009.

  41. Okay, here’s what I found for my own questions:

    The reference for my question posed on Dec 11 is here:

    Basically (I think) transfers between TFSAs is called a “Qualifying Transfer”

    In regards to my Dec 19th post, PC versus ING, I mis-interpreted PCs marketing of “transfer your money at any time without penalty and use it for any purpose.” My interpretation was that there was no charge but as I was signing up I was reading the legal information and discovered, “transfer of RRSP or TFSA to another financial institution: $50.00 per transfer “.

  42. (1) PC versus ING

    Before Jan 1, 2009, ING has bonus interest.
    After Jan 1, 2009, interest rate for PC TFSA is 3.75%, for ING TFSA is 2.7%.

    Because of the above, what I had done was to open an a/c with ING in mid Oct to get the bonus interest, but transfer most of the money out of it before the end of Dec 2008 so that I can get the bonus interest but don’ t have to tie up my money with ING for the whole 2009. I will contribute the rest ($5000 minus the contribution to the ING TFSA) into the PC TFSA on Jan 2, 2009.

    I have checked my ING TFSA a/c this morning and found that the amount of bonus interest received is not affected by the transfer out done at the end of December.

    (2) Transfer versus Withdraw/Deposit

    I found that nearly every TFSA has a fee for transfer of a/c to another institution but there are some TFSA that don’t have a fee for withdrawal. One way that I think will allow us to avoid the transfer fee is to withdraw money out of a TFSA near the end of the year and deposit it into another TFSA at the beginning of the following year. The withdrawal/deposit cannot be done in the same calendar year as the withdrawal will only increase the contribution limit of the following year. Thus, the best time to do it is to withdraw at the end of a year and deposit it back at the beginning of the next year.

  43. Since the account allows the purchase of stocks, then in the future, provided the mechanism is there, could one buy stocks not listed at an exchange? e.g. buying shares in a privately held company

  44. Lawrence Chan,
    The simple test would be to determine if the stocks can be held in an RSP. If they are so eligible, then you should be able to hold them in the TFSA. A quick web search using a term similar to “RRSP stock eligibility” should return suitable answers.


  45. A few questions about putting shares of a privately-held company (CCPC) into aTFSA:

    1. Is this possible? The guidelines state only that certain shares of privately held corporations will be eligible.

    2. If the shares were originally purchased at below market valuation (founder shares), is it possible to add these to a TFSA, and at what valuation? Will any difference in valuation be considered a taxable benefit?

    3. If the above is possible, does it effectively eliminate the need for the capital gains exemption?


  46. E-Trade seems to have the best TFSA offer among discount brokerages so far…

    I don’t understand why TDW wants to charge $25 after first withdrawal. Even CRA doesn’t restrict number of withdrawals from TFSA! Admin fees is waives with e-services is great but that’s the case with TDW’s non-registered account as well.

  47. Based on all the fabulous comments and research many of you have already done: can you tell me where the best option is for opening a TFSA account would be? It seems to be a toss up between the TD e service and the ING…….. Any tips??

  48. TD Waterhouse is an investment account.

    ING Direct and PC Financial are saving account.

    Assuming that you are young like me, you should go with an investment account. TD Waterhouse is a good way to go unless you have 100,000 with RBC or BMO, which qualify you for their discounted 9.99 trades.

  49. Thanks EconStudent
    One more question: using an investment account assumes that you know what to invest in, which I am not sure how to do. Are there really going to be better returns with an investment account rather than a saving account? And if so, does that mean that your money is tied up? (not available anytime)

  50. About TD e series, you need hold them for 3 months before you can sell them without a penalty.

    Historic return on stocks have been much higher than savings. However, we are in a bear market and returns may be negative for the next few years.

    Here is a good way to invest in your TSFA account:

  51. I’ve been following the comments and questions posted and there seem to be quite a few re: fees that institutions will be charging. The product is still new and many of the institutions out there are still trying to figure out how to benefit from the TFSA. There are quite a few variables involved in what fees you’ll be paying in the short and long-run depending on what you invest in within your TFSA i.e. straight savings account, mutual funds, stocks/bonds, GIC’s etc., which institution you decide to open your account with (i.e. some may not offer all options) etc. and investement amounts.

    Also, as I’ve been hearing, some institutions may not charge any fees this year but will come 2010. So make sure you speak to someone who knows the product and check in regularly to make sure that you are aware of any new fees.

    A great site to check out is the following – they will be posting an updated chart with fees charged by the more well-known institutions out there shortly.

  52. I just want to get this straight in my mind:
    In 2009 I can contribute $5,000 to a TFSA. If the earnings inside the account are, let’s say, $200 in 2009, I can still contribute another $5,000 in 2010. The account balance in January 2010 would then be $10,200. This would go on like this each year and I can leave all the earnings in the account and compound the interest that way as well as adding the $5,000. I would not have to report these earnings to Revenue Canada but the financial institution where I hold the account will do the reporting.
    Do I have this right?

  53. IJ, from what I understand that’s pretty close. I think the only reporting done however is on deposits and withdrawals.

    In your example in year two you have deposited $10000 and have $10200. Lets say near the end of that year you find a good deal on a car so you withdraw the whole lot, so back to 0 you go. You also have no contribution room (since in year 2 you will haev a max 10K, which you have used). In the following year you will be given not only the extra 5K of room, but you will also be given back the 10200 you withdrew so in year 3 you could put up to 15200 back in to a TFSA (The same one, or another one if you choose). In this case you would not pay tax on the withdrawal or on the 200 you made in interest/dividends/capital gains.

  54. Thank you, Traciatim, for confirming my understanding of the working of a TFSA and enlightening me further. Seeing it spelled out, the TFSA is a pretty good deal.

  55. Thanks, DB. I went to the websites you suggested and now I have still another question. The section which deals with TFSA transfer to a surviving spouse really has me confused. Are they saying that if the survivor is the sole beneficiary, the deceased person’s TFSA remains intact (of course no more contributions) and can keep earning? Even if the beneficiary also has a TFSA? Or do they mean, the entire amount of the deceased person’s TFSA must transferred to the surviving spouse’s TFSA without affecting the contribution limit of the survivor’s TFSA?

  56. I read on a french web site a lot of things about TFSA (celi in french). It’s seems that the banks focus on that cause they trying to attract more cash flows deposit. We must be careful cos’ they try to put our free money into a 5 years lock-in GIC. They just want to take more fees. In my opinion, there is no emergency. Better make a good plan before anything.

    Hope someone will open a english web site like It’s full of good stuff. Not only the Bank’s executives point of view.

  57. If I do not open a TFSA until 2011, can I then contribute 15,000?

  58. Wally, yes. You gain $5000 per year of contribution room, and this will go up later as I believe it is indexed for inflation (in $500 chunks).

  59. This blog is a wealth of information!
    Here’s a scenario i need some help with…
    I’m a university student who has a 10,000 student line of credit with TD. I will not need to use all of this cash for school expenses, so i want to invest it in a few stocks that i have been monitoring closely the last couple months…
    Would it make any sense at all for me to open a TFSA with 5k from my line of credit to buy these stocks? I mean, i have access to this money and want to invest it while prices are cheap in the market!
    Does this seem like a viable option, or am i way off my rocker on this one? Any other suggestions?
    thanks folks!

  60. McGreezer: You want to buy stock on margin through TSFA from a line credit. First of all, I think it is really bad idea because your line of credit might be cut at anytime due to problems that TD might be internally facing.

    If you are really comfortable with your analysis about stocks, then you might consider doing this. If you want to buy stocks in a TSFA, your best bet is probably Questtrade. 4.95 a trade is the most competitive in Canada.

    For most people, it is probably better off to buy an index using borrowed money. TD e series or ishares or claymore are probably good choices in this scenario.

  61. Reguarding TFSA to hold stocks in acount can I sell stocks already owned that have droped drasticly in value to have a loss to use against capital gains, and then re purchase at the lower selling price to hold in the TFSA. up to my $5000 limit. Or is there a time frame before re buying the same stock.

  62. If i have a TFSA on Questrade, can i buy and sell ANY stocks i want? I thought for some reason i could only purchase shares of securities or index funds……is this true, or can i do whatever i want?

  63. “McGeezer // Apr 7, 2009 at 8:46 am

    If i have a TFSA on Questrade, can i buy and sell ANY stocks i want? I thought for some reason i could only purchase shares of securities or index funds……is this true, or can i do whatever i want?”

    I have TFSA on Questrade. I trade stocks on it with no problem. The only problem is that the account is not allowed to be on margin. I haven’t tried options though.

  64. Charles,
    how many trades would you make in a month do you figure?

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  66. I am using Questrade for my TFSA. There is no annual fee. The typical trade fee is $4.95
    So far they have been great to deal with.

  67. What happens if I put $5100 (extra $100) by mistake in 2009? Does this mean that my contribution room next year is $4900? Or would it still be $5000 and the extra $100 put in this year is just gonna be taxed?

  68. You can deal in the stock market, be careful and do research on companies or funds you wish to buy.
    Here we are into a new year. I own a TFSA through Questrade. I have another TFSA for my wife through a broker (financial planner).
    My Questrade account produced a 40% return as of the middle of Jan. 2010. I made my own picks. For my wife’s account I also made the pick. I purchased a REIT, (real estate income fund). I sold this recently for a gain of almost exactly 115% or $10,600.00+. To amplify gains I used their dividend reinvestment plan and left all of the monthly distributions in the account until I sold it.
    Purchasing any stock last year in the first quarter was pretty easy, most of them were at the bottom. This year might not be so easy. My plan is to split it down the middle and try to pick two winners for this year.
    Remember, do research, the market drops without warning and great gains can become painful losses.
    Good Luck.

  69. in-kind contributions are a great way to take advantage of your TSFA.

    if you are own a thinly traded stock especially an option like a 2 year LEAP, the bid ask spreads can be large.

    so even though the bid price is at a significant discount. it counts as the market price of the in-kind contributions which will let you squeeze more money into your TSFA.

    you will no realize a captial loss, in your non registered account, but you could end up squeezing in an extra 1000$ a year in your TSFA.

    the disadvantage is that you have to own illiquid stock / options. so you have fewer choices.

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  72. I agree and support. This is really good, it serves me.

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