Tag Archives: TFSA

It’s Official: Tangerine is Charging a Fee to Transfer your RRSP or TFSA to Another Bank

Posted on by

Although I have yet to receive a notice from Tangerine either by email or by the message system they use within your bank account online, it appears to be official that Tangerine will be charging a $45 fee to transfer out your RRSP or TFSA balance.

UPDATE: I received a email notice inside my Tangerine account messages section on December 20 that advised that as of January 19 2015 I would have to pay a $45 fee to transfer out a RRSP or TFSA.

I updated my website with warnings when the rumour of this fee first appeared back in mid-October 2014. To date, I still have received no information directly from Tangerine about this new fee.

Tangerine Will Charge a $45 Fee to Transfer Out a RRSP

In the Frequently Asked Questions on the Tangerine site, it says they charge $45 to transfer out a RRSP.  It does not say when this new fee is applicable! I was told on the phone that it would be in January 2015 but that is not clear here.

Will Tangerine Charge a Fee to Transfer Out a TFSA?

At this point, Tangerine has not yet said anything about a TFSA transfer out fee on their website. Nor have I received any notice by mail, email or message.

For a TFSA, one way to avoid a fee is to wait till December. Instead of transferring your funds, withdraw them. Then on January 1 of the next year and NOT BEFORE you can contribute them into your TFSA at another institution. If you deposit them in the same year you withdraw them you will be fined 1% a month by the CRA. You MUST wait till January 1 of the next year.

Will Tangerine Now Refund a Fee Charged by Another Bank for Transferring a TFSA or RRSP into Tangerine?

In the past, I moved a cash RRSP into Tangerine (when it was called ING Direct.) I asked if they would pay me back the fee that the other bank charged me for moving out my RRSP. They replied that because they did not charge a fee for transferring a RRSP away from Tangerine, they also would not pay a refund for a fee charged for transferring a RRSP in to Tangerine.

So has that now changed? Will they pay up to $45 to cover the fee paid to transfer a RRSP from another bank into Tangerine?

I’ve sent that question to Tangerine and will update this article when they reply.

UPDATE: Ok the reply so far is not encouraging. I emailed to inquire and was told that because I have an account with Tangerine I have to phone them to discuss this. That suggests they don’t have a formal policy yet although if you are interested in transferring in, I would suggest you call and see if they will reimburse your fee.

The worrying part was they also said that owners of registered products had been notified of the “transfer out” change via the messaging system within their account. I have several registered products and have not received any type of notice!

I’ll provide additional updates if/when I can get them.

Can Tangerine Start Charging a Transfer Out Fee Without Any Formal Notice to Customers?

Usually banks warn you a few weeks or months ahead of time when they are changing their fees.

So far I have not received any notice from Tangerine about this new fee. I have not received a letter, an email, a message when I sign in to my accounts, a message on the message system inside my account, or even a few words written in my October banking statements about it.

Do they have to give notice of this fee?

That’s hard to find out! In the USA, they clearly do. The US Government Consumer Financial Protection Bureau website says “a bank or credit union can start charging you fees…[if they notify] you in writing at least 30 days before it starts charging fees….”

I wrote the Canadian Bankers Association, CBA, on November 18, 2014 to ask if there is any required notice for new fees. Unfortunately, they chose to respond that I should direct my question to the federal government’s Financial Consumer Agency.

The (federal) Department of Finance Canada appears to be working on a new Financial Consumer Protection framework, judging by a consultation paper from December 2013 posted online. It’s not clear to me whether this is one of the issues that may be included.

I will update this article if I get any further information about requirements from the Financial Consumer Agency.

UPDATE 1: They have replied that I should expect to wait 10 business days for a reply.

Related Reading

Join In
Have you recently been zinged with a new or an increased banking fee? Did they warn you in advance or was it a total shock? Please share your experiences with a comment.

How to Open a Tangerine TFSA Kick Start to Save in the Fall of 2014 for January 2015

Posted on by

It’s back! Once again, Tangerine is offering a savings account bonus rate for people who set aside money to be transferred immediately into their Tangerine TFSA Savings Account on January 1 2015. So if you have money you plan to put in your TFSA January 1 that is not earning much interest, you may want to open a Tangerine TFSA Kick Start Account and earn an expected annual rate of 2.6% for the next 2 plus months.

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.

Why Does the TFSA Kick Start Account Pay “Double” Interest?

You can’t put your 2015 money into your TFSA in 2014 without paying a big penalty to the CRA. So Tangerine can’t really offer you an early start on your 2015 TFSA.

However, most people are in a tax bracket where they pay a tax rate of 50% or less on their savings account interest. So if Tangerine pays you twice as much interest on your savings as they normally would, they consider that they are paying you the money you will need to pay your taxes on that interest. So the Kick Start account mimics a tax-free account.

For example, say you would normally earn $2 in interest on your savings account funds from October 1-December 31. If you are in a 50% tax bracket, you would have to pay $1 of that money to the government when you file your tax return in April.

Now if Tangerine paid you $4 in interest instead of $2, you would have to pay $2 to the government, but you would be left with $2—that’s the same amount as if you had not had to pay any taxes on your savings account funds.

Of course the real reason Tangerine is paying you extra interest is that they would like you to put your 2015 TFSA contribution into one of their financial products. The Kick Start account will automatically transfer your TFSA savings into your TFSA account on January 1 (up to $5500.)

Tangerine is hoping you’ll leave your TFSA money in that account or use it to buy one of their TFSA GICs or TFSA mutual funds.

They won’t be really happy with me: I will transfer (for no fee!) my TFSA money out of my Tangerine account on January 2, 2014, and send it to my brokerage account.

UPDATE: Since Tangerine is planning to charge a fee for transfers out of its TFSA to another financial institution starting January 2015, there is no longer any value to me in using the Kick Start program. I am withdrawing my contribution immediately. I will not earn any bonus interest, but I will be able to contribute my 2015 TFSA contribution without any fee in January to my brokerage account.

Why Go To So Much Trouble to Earn an Extra Couple of $$?

Personally, I don’t find it much work to enroll in the Tangerine TFSA Kick Start program. It takes about 3 minutes. What I’m putting into the account is money that would otherwise be earning only 1.3%. (It’s money that was not eligible for the recent interest rate promotions from PC Financial and Tangerine, partly because some of it had not been earned yet!)

It doesn’t matter to me if I have to wait a couple of weeks for my TFSA money to transfer from Tangerine to my brokerage, either. I like to study what I want to invest in, and I often find things are overpriced during TFSA and “RRSP Season.”

Last year, by the way, it took 11 business days for my TFSA money to transfer from Tangerine to my brokerage, including the time my request spent in the mail. It took 18 business days for my husband’s money to move.

UPDATE: Please be aware that as of January 2015, Tangerine plans to start 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 to Open a Tangerine TFSA Kick Start Account

  1. Click on the tab: Open a new Account
  2. Look for the Tangerine 2015 TFSA Kick Start Account section.
  3. Click on the button: Learn more
  4. Read through the program details. Click on the Enroll Now button.
  5. Click on the link: Legal Terms and Conditions. Read through the details. Click on the Back link.
  6. Click on the Open an Account button.
  7. If you don’t already have a TFSA savings account at Tangerine, you will have to give Tangerine permission to open a new one on January 1, 2015. Consequently, the following page will open.

The Open a Tax-Free Savings Account Page

Review your name, address, SIN and date of birth in the Client Information section. If they are not correct call Tangerine to fix them before continuing. If they are ok, continue.

In the Account Information section

The fields in this section are a bit confusing because they’ve combined two different activities: opening and funding your Kick Start account and opening a TFSA daily interest savings account on January 1, 2015. I confirmed what should go in each field with Tangerine.

For example, it seems to say “how much should Tangerine put into your TFSA on January 1 2015” but what it means is “how much do you want Tangerine to put into your TFSA Kick Start account today?”

  1. In the Amount field, type the amount of money you want to contribute to your Kick Start TFSA account today.
  2. If desired, change the Nickname for the account. They have pre-typed a name of: 2015 TFSA Contributions.
  3. From the drop-down list for Fund from this Account, select where you want the money to come from to fund your TFSA Kick Start account.
  4. Note the new TFSA account will be set up with the displayed Effective Date of January 1, 2015.

In the Legal section

  1. Answer Yes or No to the question: Will a third party of any other person benefit from this Account?
  2. From the drop-down list, select the intended use of your TFSA Kick Start account.
  3. Read the statement about how Tangerine will be applying to create a new TFSA savings account for you to begin in January 2015. If you agree that they can do this, click YES. If not, click No.
  4. Click on the Next button.

The You’re almost done…here’s what’s going to happen Page

  1. Review the information provided.
  2. If it looks correct, click on the Confirm button.

The You’re All Done! Page

  1. Copy down the confirmation number and other information from screen for future reference.
  2. Click on the button: Continue banking
  3. On the My Accounts page, under the heading Saving you should see your new
    Tangerine TFSA Kick Start Account – 2015 TFSA Contributions
    account with the balance you asked to transfer into it.
  4. If you’re finished banking, click on the Log me out link.
    For increased security, empty your cache and close your browser session.

UPDATE: I recommend you only apply for the Kick Start program if you intend to leave your TFSA money at Tangerine for the long term.

UPDATE: Please be aware that as of January 2015, Tangerine plans to start charging a fee if you transfer your RRSP or TFSA from Tangerine to another bank, credit union, brokerage or financial institution.

Related Reading

Join In
Do you take advantage of the increased interest paid on a Tangerine TFSA Kick Start account? Please share your experiences with a comment.