What you need to ask when shopping around
One of the first things you’ll want to know about is if there are any fees associated with opening or holding a TFSA with a financial institution. Not many institutions charge them, but a few do have an annual charge so be sure to ask if there are any annual fees for holding a TFSA. Also ask if there are any minimum balance requirements (i.e. do you have to keep a certain balance so that you don’t get charged fees)
The next thing you’ll want to know is what kind of transfer out fee they charge. For example if you are unhappy with either the service or you just want to change financial institutions, how much will you be charged if you want to switch. All of the brokerage firms we reviewed charged anywhere from $60 to $150 to transfer out of a TFSA. Be sure to also ask if they distinguish between partial transfer out and full transfer out.
One of the worst kinds of fees are those that are charged for accessing your money. Only two brokerages we reviewed actually charged a withdrawal fee ($25), so be sure to inquire whether or not you get charged if/when you want to withdraw your money.
Lastly, for those individuals who would like to use their TFSA to trade currency or stocks or simply to hold US Dollars, make sure to enquire about whether they a) have a US dollar account for TFSAs and b) if there is any annual charge.
We’ve actually reviewed many of the brokerages’ TFSA offerings/costs and you can access that review by clicking here.
To find out more information:
Of course we wanted to provide you, the reader, with a great overview of TFSA’s. There are some sites that we highly recommend you check to get the latest and most official information on TFSA’s.
The first is the CRA TFSA guide for individuals located here: http://www.cra-arc.gc.ca/E/pub/tg/rc4466/rc4466-e.html
This is the official guide – so chances are if you have a question about TFSAs you can find it answered here although don’t expect too many great tips/strategies from it, it’s basically the rule book.
If you’re looking for great tips or strategies on how to use your TFSA, there are many great blogs/sites out there that can help. A great book that will give you a comprehensive but very readable look at TFSAs and when they work best for you is by Gordon Pape.
Lastly, even though there may be some sales pitches that come with it, talking to your financial planner or your bank’s financial planner is very worthwhile. There are usually free seminars at some point that banks provide but if not, booking an appointment can be a great way to get your questions answered.
The bottom line…
Regardless of what you’re saving for, whether it is that new roof, minivan or Bengal Tiger for the backyard, the “Mighty” TFSA is a way to keep your money working harder and smarter for you.