This is a tale of two TFSAs. Actually, it’s a tale of four Tax Free Savings Accounts. The first two TFSAs were at ING Direct. (Now called Tangerine.) ING Direct Tangerine offered 2.5% interest for a few months for savings of up to $5500 per account (one account per client) provided the savings were transferred automatically into the client’s TFSA on January 1. My husband and I took advantage of that offer. Then, on January 2, we sent in the forms to transfer our TFSAs from Tangerine to our BMO InvestorLine accounts—but how long would it take?
UPDATE: Please be aware that as of January 2015, Tangerine has started charging a fee if you transfer your RRSP or TFSA from Tangerine to another bank, credit union, brokerage or financial institution.
Given that change, I would no longer recommend the Kick Start program unless you plan to keep your TFSA money at Tangerine for the long term.
How Did We Apply to Transfer Our TFSA Funds?
It’s important to transfer TFSA funds. If you actually withdraw the funds from a TFSA account, you have to wait till January 1 of the next year before you are allowed to deposit them again in the same TFSA or in a different TFSA at another financial institution. You can transfer TFSA funds at any time with no tax penalty.
Be careful to check whether there is a fee charged by the bank etc though before starting a transfer. ING Direct Tangerine does not charge transfer fees. (At least not as of when this was written in January 2014. Always check.) UPDATE: As of January 2015 Tangerine plans to start charging a fee to transfer TFSA funds to another financial institution.
To request the transfer of our TFSA funds to BMO InvestorLine, we signed into our InvestorLine accounts and filled out a T2033 each. The form is available under the Account Services tab, then the Forms link, then the Transfers tab, then the Transfer forms: Personal Accounts link.
You can read some more about this in How to Transfer Assets to a BMO InvestorLine Account from Another Bank Using a T2033 Form.
After we completed the forms, printed and signed them, we mailed them to BMO InvestorLine.
How Long Did It Take for My TFSA to Transfer from Tangerine to BMO InvestorLine?
I mailed our requests to transfer our funds in a bright red street mail box on January 2. I have no idea whether it got picked up that day or the next.
On Tuesday, January 14, my money was still in my TFSA at Tangerine.ca.
On Wednesday, January 15 it was gone!
First thing in the morning on January 17, my TFSA funds appeared in my cash balance in my BMO InvestorLine TFSA.
So it took 15 days for my funds to transfer, or 11 business days. That includes the “Canada Post” factor of getting my request delivered to InvestorLine.
How Long Did It Take for My Husband’s TFSA to Transfer from ING Direct (Tangerine) to BMO InvestorLine?
We don’t know yet.
That’s right. It’s now January 22 and his funds have not yet left Tangerine. They are sitting in a cash TFSA account which is fortunately earning 2.5% while he waits.
UPDATE: Thursday, January 23: My husband’s TFSA has now left Tangerine. It has not yet arrived in his BMO InvestorLine account as of the morning of Monday, January 27.
Ah! As of the morning of Tuesday, January 28, his cash is in his InvestorLine account.
So in his case it took 26 days, or 18 business days including the Canada Post time, to transfer.
As I said earlier, don’t expect these things to happen quickly!
The Moral of the TFSA Transfer Story?
There’s no simple answer for how quickly your TFSA transfer will take place. There’s not even any simple way to check on the status of the transfer. We’ll wait another few weeks before calling InvestorLine to see if they have received the transfer request. Phoning now, during RRSP season, is not worth my time. (We didn’t need to phone.)
If you’re hoping to have cash in a specific account to catch a short term opportunity, beware. It takes time to move things from bank to bank. Plan ahead.
UPDATE: Please be aware that as of January 2015, Tangerine has started charging a fee if you transfer your RRSP or TFSA from Tangerine to another bank, credit union, brokerage or financial institution.
Given that change, I would no longer recommend the Kick Start program unless you plan to keep your TFSA money at Tangerine for the long term.
Related Reading
- How to Transfer Assets to a BMO InvestorLine Account from Another Bank Using a T2033 Form
- How to Make a TFSA Contribution to a BMO InvestorLine Account and How Long It Takes to Get There
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Have you transferred TFSA funds between institutions? How long did it take? Please share your valuable experiences with a comment.
Hi there!
This post is indeed very relevant to a situation my wife and I are facing – except maybe with a twist!
A few of our 2.5% ING GICs matured a month ago, and are sitting in the ING TFSA savings account earning peanuts. I want to just move that money (from the TFSA savings) to another institution (with more attractive GIC rates).
If I “Transfer” my TFSA, will I not have to liquidate all of my other ING GICs (some mature several months from now) – and lose several years of accumulated interest?
The way I understand the TFSA “transfer” – you will no longer have a TFSA account in the sending institution. And since GICs can’t be “ported across”, they will have to liquidated and the cash value then transferred.
Any suggestions how I could just move the cash in the ING TFSA savings account without actually liquidating the other GICs?
Sincerely
You do not have to transfer your entire TFSA at one time. You specify on the form how much to transfer. Unfortunately, though, Tangerine will charge you a fee of $45 for *each* transfer out of a TFSA.
Generally, GICs can not be liquidated into cash before they mature. You may have some of the old “cashable” GICs from Tangerine but many of their newer GICs cannot be cashed before they mature.
To avoid TFSA transfer fees, many people wait until mid- to late- December and withdraw the amount as cash from their TFSA. Then on January 1 of the next year when they are re-granted contribution room based on that withdrawal in the previous year, they deposit the TFSA funds with the new financial institution. Obviously that’s not an ideal solution for someone who wants to move the money in March. However, if the $45 fee would eat up most of the gain in investing at another location, it may be better to wait.
I hope this helps a bit.