TD Charges $5.00 for TFSA withdrawals (legal????)

[L505]

After the first free debit per month TD Canada Trust says it costs $5.00 to withdraw or transfer from the TFSA.

Now although one should not be withdrawing often from the TFSA, is this even legal to charge people for debit transactions on a TFSA? In an emergency if one wanted to withdraw money, he may not withdraw it all in one shot.. it may be a few withdrawals in one month.

I thought that somewhere I once read that the whole idea with TFSA was that banks could not charge for withdrawals.

Not only is this possibly illegal (maybe I am just being a ranter), the TD website does not clearly disclose this anywhere! I had to ask someone with their online email system. They say the TFSA will act similar to the GIA savings account ($5 debit fee and one free per month)

[angel_wing0]

yes its legal afaik...bank can charge whatever they want to transfer to another tfsa/withdrawal afaik.

[spf1971]

It's a bank account just like any other, the only difference is that the money is held tax free as far as CRA is concerned. Banks can set fees for transactions in any of their accounts.

[L505]

But not disclosing it clearly is problematic and simply disrespectful.

Frankly I am not keeping any of my money in that account now for that simple reason. Sorry TD you have lost my business!

Luckily I only made one withdrawal during my emergency this month for an important life changing purchase.

[angel_wing0]

true i cant find it anywhere on the td website...anyone able to?

[Jon Lai]

It's the same story at BMO and CIBC, but I knew about both before I made the account. It's probably hidden in the terms somewhere on the TD website.

The way I see it - it's a high interest account, so they make their money back elsewhere. Fair game to me, 3x better than the 0.75% I get in my normal Savings account.

[Al2009]

Are there any other annual maintenance fees?

[CSR]

Sure why not, even chequing accounts have fees if you go over the # of allowed transactions per month.. ditto w/ savings...

[jmc0]

I don't like it, but 'fees' are one of those thing that banks makes money off you.

[wingfire]

The TFSA is another account that falls in the Savings Account category. So if you make 1 withdrawal, it counts as a transaction. Any additional transactions beyond the one that is counted as free goes with the rate stated per transaction. In this case, savings accounts at TD bank have a rate of $5.00 per transaction on a standard savings account.
Savings account: http://www.tdcanadatrust.com/accounts/compare_savings.jsp
Althought it is not explicitly stated, the TFSA follows the same transaction rules as a GIA Savings account in transaction fees. This is one of those things you should ask about when you open an account. Although, logically, it does make sense that a Tax Free Savings Account would follow a similar transaction system as a normal Savings account

Chequing account: http://www.tdcanadatrust.com/accounts/compare_chequing.jsp

This fee as opposed to the fee of $0.65 or free (depending on the account you have for chequing) for any extra transactions on a
is used to deter people from making multiple transactions so that they can save up their money. If you want to make more transactions, use a chequing account.

Or go to PC financial.