Tax-free savings account offered by PCF

[CSR]

Link requires login, however the apply now link on the website doesn't work grr

[sklm]

You can open it right away and start contributing in January.

Currently posted interest is 3.75%, plus tiny anniversary bonus for 1000+ balances:
https://www.txn.banking.pcfinancial.ca/a/rates/tfsaRate.page
As usual, "Rates are subject to change without notice" ;)

Apparently, no fees whatsoever.

[angel_wing0]

As usual, "Rates are subject to change without notice" ;)

aka deal breaker. Still would rather put in a GIC. But this is the best rate for all tfsa right now for savings.

[sklm]

Still would rather put in a GIC.Me, too. But I don't see such option with PCF or any other institution, yet.
Anyway, I've just opened this said account, with 0 balance. Just for the fun of it...

[nobody1234]

Still would rather put in a GIC.

Me, too. But I don't see such option with PCF or any other institution, yet.


Might be worth checking with ING or other operator whether they will let you transfer in GICs you bought with them into their TSFA. Questrade indicated to they would be allowing transfers of equities held in non-registered QT accounts with no fees once their TSFA accounts are ready. Perhaps ING can offer something similar. Good chance GIC rates will be lower come Jan. 1 then they are now.

[sklm]

Link requires login
This one certainly doesn't
http://www.banking.pcfinancial.ca/a/rates/tfsaRate.page

Also, the "Apply Now" button on that page seems to work fine, too. It redirects you here
https://www.txn.banking.pcfinancial.ca/a/servlet/ApplicationServlet?applicationProducts=tfsavings

Anyways, this is what you see at the end of the day
http://img227.imageshack.us/img227/4628/pcftfsayr7.jpg

[CSR]

thx


thank you for your application!


Your application was received on Nov 23, 2008, at xxx PM EST. The next step is to visit a pavilion near you and present 2 pieces of identification (we recommend that at least one is a government-issued photo ID). Please wait at least 1 full business day before visiting a pavilion.

You have applied for:

the Tax Free Interest Plus™ savings account

[sklm]

The next step is to visit a pavilion near you Oh... obviously the steps are different for new and existing customers. My TFSA had been opened online, as soon as I hit "submit" button.

[matradley]

I just opened mine - thanks! XD

[Jucius Maximus]

Oh... obviously the steps are different for new and existing customers. My TFSA had been opened online, as soon as I hit "submit" button.

Same, I just opened mine.

[tng11]

Still on the fence about opening this... as I might be designating my TFSA to buy equities over a savings account

Can I open this now, and keep a zero balance for more than a year, that's if I contribute $5,000 in a different account. The rate seems really good, but I'm not too sure where it may headed in the next year

[sklm]

Can I open this now, and keep a zero balance for more than a yearYou probably can't. PCF says, they will close the account if it's zero balance for 120 days.
But why open it now if you are not yet sure you are going to put something into it?.. That account is definitely not going anywhere and you should be able to open it later at any day when you make up your mind.
Finally, if you really want to have it right now you could just open it and then invest as little as $1 in January :-) You won't lose much of the contribution room :-)

[CSR]

Oh... obviously the steps are different for new and existing customers. My TFSA had been opened online, as soon as I hit "submit" button.

hmm, i'm an existing customer already.... I keep getting an error message when I hit apply:

[CSR]

I keep getting this message:

We are unable to complete this request.
If you have any questions, please contact President's Choice Financial® Customer Support at
1-888-723-8881 or visit a pavilion near you.
President's Choice Financial® products are currently not available to residents of Quebec.
You must have reached the age of majority in your province in order to apply for credit products and overdraft protection.

[angel_wing0]

Might be worth checking with ING or other operator whether they will let you transfer in GICs you bought with them into their TSFA. Questrade indicated to they would be allowing transfers of equities held in non-registered QT accounts with no fees once their TSFA accounts are ready. Perhaps ING can offer something similar. Good chance GIC rates will be lower come Jan. 1 then they are now.

i m going to wait till then, if they are lower...well guess i will put it in pcf.

[spintheblackcircle]

Hmmmm...

3.75% is currently a promotional rate applied for their chequing and 2 types of savings account. This rate ends on Nov. 30th, and as far as I know all their rates for the respective accounts go back down to their normal rate.

Normal rates

Chequing - varies, but generally going to be under 0.15% for most
Interest first savings - 2.0% no min balance
Interest Plus - 1.0% under $1,000; 3.05% over $1000

Something tells me you are going to see 3.05% as the rate and not 3.75% in a week or so for the TFSA. Maybe even less for balances under 1k.

Hopefully this isn't the case and a higher interest rate will be exclusive to the TFSA, but who knows. I wish they would give higher interest rates as incentives for people who say deposit the maxiumum, no withdrawl, or have other such conditions to garner a higher rate (like > 4%).

Wishful thinking I guess. I will be signing up though.

[angel_wing0]

i dont understand why we should open it now, it's not like we get benefits (free money/higher rates) if we do...or am i missing something?! and the thing is, we dont even know if 3.75% will be the rate starting jan 1,2009 --*

[sklm]

or am i missing something?!I don't think so... I believe you are absolutely right. No benefits, no guaranteed 3.75% or anything like this. Right now the only reason to open it is "just for the fun of it", as I said before :-)

[srg83]

I'll have to look it up again but ING Direct is allowing you to put money in their 2.7% TFSA now - they pay you back the taxes though.

They have tax free GICs starting in January - going to roll over my current TFSA into a 4.5% interest 5-year GIC at that point. Don't want to touch it anyway so I might as well get the most interest for it.

Edit: I just checked the ING info...they double your interest if you open an account between today and December 31st. They say that "should" offset the taxes but don't actually pay back your taxes. Correct me if I'm wrong but wouldn't that increase the amount of taxes you pay? ;)

[Lyrrad0]

I don't think so... I believe you are absolutely right. No benefits, no guaranteed 3.75% or anything like this. Right now the only reason to open it is "just for the fun of it", as I said before :-)

Well, if you open it now, you would appear to get the benefit of an earlier anniversary bonus, so you'd get an extra few cents.

[angel_wing0]

Well, if you open it now, you would appear to get the benefit of an earlier anniversary bonus, so you'd get an extra few cents.

yeah by like a month and a week...:D

[rfdrfd]

Yup, like what srg83 said. The only benefit so far in opening this early is from ING.



i dont understand why we should open it now, it's not like we get benefits (free money/higher rates) if we do...or am i missing something?! and the thing is, we dont even know if 3.75% will be the rate starting jan 1,2009 --*

I'll have to look it up again but ING Direct is allowing you to put money in their 2.7% TFSA now - they pay you back the taxes though.

They have tax free GICs starting in January - going to roll over my current TFSA into a 4.5% interest 5-year GIC at that point. Don't want to touch it anyway so I might as well get the most interest for it.

Edit: I just checked the ING info...they double your interest if you open an account between today and December 31st. They say that "should" offset the taxes but don't actually pay back your taxes. Correct me if I'm wrong but wouldn't that increase the amount of taxes you pay? ;)

[simo_8]

If you open early with ING with an orange code, you get a $13 bonus to start and you get double the 2.70% interest until the end of the year before they automatically transfer all your funds to the tax free account in January. ING seems to be giving better perks to sign up with them earlier.

PM me if you want an orange code for the $13 bonus.

[angel_wing0]

i m very certain there will be much better deals once tfsa officially opens on jan 2nd, 2009.

[sonypcs]

Here is a suggestion...I am NOT bashing people to open up a TFSA so Dont be mad !!!

I was wondering why you all are going to the bank or doing that online on opening a TFSA account which pays you only 3 or 4 % interest ? Do you think this TFSA should be use on buying ETF's, stocks or mutual funds that pays you the HIGHEST percetage of return in order to get those CAP GAINS TAX FREE ?

Lets say you put $ 5,000 in this TFSA working with 3.5 % interest, your return is only $ 190 - 200.00 / year from that and only that amount is tax free.

If your tax bracket is LOW enough, the benefit of putting this money into TFSA means you wont receive a T5 to report to CRA only...

Lets say if your tax bracket is 30 %, the benefit of putting this money into TFSA means you wont receive a T5 (which you will be paying $ 60 of taxes to the CRA supposed) and you benefited only that interest earned.

If I put into a Canadian Equity ETF or lets say a Bank Lovers stock like (TD Bank)..With 100 shares = $ 4,500..What I will be getting if POSSIBLE CAPITAL GAINS and Dividend TAX FREE.. and if I do this every year, I would be able shelter this apperciation and dividend in the long run and it creates wealth better than 3.5 or 4 % savings account...

Please remember you have to factor INFLATION into your return on your money too...Everyone says gas is cheap, oil is cheap so we are deflating..but who knows when will this be finished ...

My view --> I believe 2% inflation should be factored in with any return of money every year. That means 3.5 % savings account means 1.5 % FINAL RETURN after inflation...

If you think I am BSing...look at Macdonald's...Big Mac Combo is going from $ 3.99 plus 7 % Tax 4 years ago and its now $ 5.99 Plus 13 % Tax in 2008...

[dcw888]

I totally agree with you. But does anyone know which Bank is offering no annual fee TFSA that allow you to buy stock or ETF's?

BMO investorline is offering the first year of TFSA free of charge but after that, they will charge $50 per year unless you have 100K in total with BMO in other accounts.



Here is a suggestion...I am NOT bashing people to open up a TFSA so Dont be mad !!!

I was wondering why you all are going to the bank or doing that online on opening a TFSA account which pays you only 3 or 4 % interest ? Do you think this TFSA should be use on buying ETF's, stocks or mutual funds that pays you the HIGHEST percetage of return in order to get those CAP GAINS TAX FREE ?

Lets say you put $ 5,000 in this TFSA working with 3.5 % interest, your return is only $ 190 - 200.00 / year from that and only that amount is tax free.

If your tax bracket is LOW enough, the benefit of putting this money into TFSA means you wont receive a T5 to report to CRA only...

Lets say if your tax bracket is 30 %, the benefit of putting this money into TFSA means you wont receive a T5 (which you will be paying $ 60 of taxes to the CRA supposed) and you benefited only that interest earned.

If I put into a Canadian Equity ETF or lets say a Bank Lovers stock like (TD Bank)..With 100 shares = $ 4,500..What I will be getting if POSSIBLE CAPITAL GAINS and Dividend TAX FREE.. and if I do this every year, I would be able shelter this apperciation and dividend in the long run and it creates wealth better than 3.5 or 4 % savings account...

Please remember you have to factor INFLATION into your return on your money too...Everyone says gas is cheap, oil is cheap so we are deflating..but who knows when will this be finished ...

My view --> I believe 2% inflation should be factored in with any return of money every year. That means 3.5 % savings account means 1.5 % FINAL RETURN after inflation...

If you think I am BSing...look at Macdonald's...Big Mac Combo is going from $ 3.99 plus 7 % Tax 4 years ago and its now $ 5.99 Plus 13 % Tax in 2008...

[AllWheelDrift]

Here is a suggestion...I am NOT bashing people to open up a TFSA so Dont be mad !!!

I was wondering why you all are going to the bank or doing that online on opening a TFSA account which pays you only 3 or 4 % interest ? Do you think this TFSA should be use on buying ETF's, stocks or mutual funds that pays you the HIGHEST percetage of return in order to get those CAP GAINS TAX FREE ?

Lets say you put $ 5,000 in this TFSA working with 3.5 % interest, your return is only $ 190 - 200.00 / year from that and only that amount is tax free.

If your tax bracket is LOW enough, the benefit of putting this money into TFSA means you wont receive a T5 to report to CRA only...

Lets say if your tax bracket is 30 %, the benefit of putting this money into TFSA means you wont receive a T5 (which you will be paying $ 60 of taxes to the CRA supposed) and you benefited only that interest earned.

If I put into a Canadian Equity ETF or lets say a Bank Lovers stock like (TD Bank)..With 100 shares = $ 4,500..What I will be getting if POSSIBLE CAPITAL GAINS and Dividend TAX FREE.. and if I do this every year, I would be able shelter this apperciation and dividend in the long run and it creates wealth better than 3.5 or 4 % savings account...

Please remember you have to factor INFLATION into your return on your money too...Everyone says gas is cheap, oil is cheap so we are deflating..but who knows when will this be finished ...

My view --> I believe 2% inflation should be factored in with any return of money every year. That means 3.5 % savings account means 1.5 % FINAL RETURN after inflation...

If you think I am BSing...look at Macdonald's...Big Mac Combo is going from $ 3.99 plus 7 % Tax 4 years ago and its now $ 5.99 Plus 13 % Tax in 2008...
It all depends on your goals. A lot of people will be using the TFSA to shelter their emergency savings which needs to be liquid. Also, interest income is taxed much higher than capital gains and dividends, which is why to me it makes sense to put your fixed income investments in a TFSA. (Actually, RRSP is the best place for fixed income, but again if you need liquidity for an emergency fund, that's not really an option.)

Taking your example, if you plan to hold your bank stocks indefinitely to use the dividend as an income source when you retire, you'll never realize the capital gains, and the tax rate on the dividends will be low. Having the fixed income investment in an unregistered account would result in a large tax drag, probably only tracking inflation after taxes. Assuming you're targeting a specific asset allocation, you'll have to keep contributing more to your fixed income to keep your targets.

[dark169]

Here is a suggestion...I am NOT bashing people to open up a TFSA so Dont be mad !!!

I was wondering why you all are going to the bank or doing that online on opening a TFSA account which pays you only 3 or 4 % interest ? Do you think this TFSA should be use on buying ETF's, stocks or mutual funds that pays you the HIGHEST percetage of return in order to get those CAP GAINS TAX FREE ?

Lets say you put $ 5,000 in this TFSA working with 3.5 % interest, your return is only $ 190 - 200.00 / year from that and only that amount is tax free.

If your tax bracket is LOW enough, the benefit of putting this money into TFSA means you wont receive a T5 to report to CRA only...

Lets say if your tax bracket is 30 %, the benefit of putting this money into TFSA means you wont receive a T5 (which you will be paying $ 60 of taxes to the CRA supposed) and you benefited only that interest earned.

If I put into a Canadian Equity ETF or lets say a Bank Lovers stock like (TD Bank)..With 100 shares = $ 4,500..What I will be getting if POSSIBLE CAPITAL GAINS and Dividend TAX FREE.. and if I do this every year, I would be able shelter this apperciation and dividend in the long run and it creates wealth better than 3.5 or 4 % savings account...

Please remember you have to factor INFLATION into your return on your money too...Everyone says gas is cheap, oil is cheap so we are deflating..but who knows when will this be finished ...

My view --> I believe 2% inflation should be factored in with any return of money every year. That means 3.5 % savings account means 1.5 % FINAL RETURN after inflation...

If you think I am BSing...look at Macdonald's...Big Mac Combo is going from $ 3.99 plus 7 % Tax 4 years ago and its now $ 5.99 Plus 13 % Tax in 2008...

inflation needs to be applied to all savings including equities. If you can beat inflation with a savings account/gic your doing ok.

should you need to sell your holdings (say you loose your job or what not) for a loss you will not be able to use the capital loss to offset other gains in the future PLUS you will loose your contribution room when you withdraw.

dividends are taxes at a much lower rate so having them in your TFSA makes little difference until the dividend yield rate is multiples that of a GIC/HISA.

Households should have an emergency fund and 5-10k seems about the right number for 3-6 months of expenses. If you don't have that fund you shouldn't be buying stocks at any rate of return.

Where the real drastic advantage of the TFSA will come is in 3, 5, 10 years where contribution rooms are up beyond what a typical cash holding should be.

I'm not sure why people are rushing to open these accounts without any perk. ING is giving you double interest until Jan after that your free to open accounts where ever you want as long as you don't over contribute.
If there is a mad rush come Jan 2 to open these it'll mean mad perks to attract buisness/savings during dark times.