TFSA F U

Tara and I thought we would be smart and put in some money to a Tax Free Savings account to make it grow a little for the wedding.

We had a total of $10000 to add, so we opened two accounts at PC Financial for $5000 each.

Well, PC decided to drop their interest from 3 to 0.75% which was pretty much pointless. So we moved the money to a TFSA at ING Direct.

Easy right?

No.

Turns out that’s not allowed. See, in a single calendar year you can contribute a total of $5000 to a TFSA, ever.

So what WE did, was contribute, withdrawl, and contribute again. So our overage charge is $5000. Each.

And the penalty for that? 1% interest for the overage times the number of months over. For me, that works out to $200, for Tara, it’s $250.

This completly defeats the purpose, and it still makes no sense to Tara and I as we contributed a total of $5000 to our accounts, not $5000 and another $5000.

But that doesn’t matter, as according the government we had opened two accounts, each, for $5000.

F.

U.

So the $60(total!) “tax free” interest we made on the account is costing us $450!

Again….F….U…..

Never again, not going to go anywhere near these stupid ass accounts….

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5 thoughts on “TFSA F U

  1. I kinda like mine, but yeah, the rules are dumb and the banks don’t make it easy. It would be so much better if it was just one account and the first $5000 you deposit in a year was magically calculated as tax-free. It’s stupid to penalize people for wanting to save more.

  2. Almost the exact same thing happened to me, they’re charging me for $25, 000 in overages. I tried to call this morning the number on the letter they sent me. first i got a disconnected signal, then it just rings and rings with no person or machine answering

  3. Same for me. Got my notice June 7- $270 Penalty for myself, $250 Penalty for my wife, both in our fifties. In our case we both withdrew the full $5000 from President’s Choice Financial in June to loan to a relative for one month. After the month, we deposited back into the SAME account. But as you say CRA considers that another ‘contribution’. We just filled out CRA’s “Request for Tax Relief’ form #RC4288E and will mail today. We are not paying the $520 until this is resolved. I am also going to write our MP here in Regina. I would hope others do the same. Your know the Government advertised these TFSA’s with much fanfare and Hoopla for the ‘ordinary’ Canadian citizen, not for Tax Accountants that have to go over all the rules with a fine-toothed comb. My 23 year old daughter is in a similar situation with a $100 penalty. You know, TFSA Tax-Free SAvings Account. Don’t you think you should be able to deposit and withdraw at will like a ‘savings’ account as long as it doesn’t go over a balance of $5000.!!!

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