TFSA: Set Up, but with a Catch?
Mrs. Caj and I, just before Christmas, stopped by our TD branch to set up a TFSA account. We assumed we would be setting up a joint account, so we made sure that both of us were there (in the past I have set up accounts without Mrs. Caj and adding her later has always been a big issue, so this time we made sure both of us were present).
We dealt with our customary customer representative, andthe first thing we foundout is that the TFSA is actually an account for a single person, OK, good to know that. We also found out that my wife and I can set up accounts so we can actually shelter $10,000 a year instead of just $5,000 which is a good thing.
Our next knowledge point was that the TFSA is actually not going to be set up until January 2nd, which I assumed would be the case, so we were in fact only “pre-registering” for the investment vehicle.
TD offers a bunch of different TFSA vehicles, but I had already decided that a true investment account with TD Waterhouse gives me the most flexibility, so that is the vehicle we used for the TFSA. Half way through signing a bunch of documents another important knowledge point was divulged by our Customer Service agent, evidently with a TD Waterhouse TFSA there is a $50.00 service charge every year.
I was lucky that my wife was present because I am sure I would have said “WTF!”, but I asked for the rep to repeat what she had said, and she said that since this is a TD Waterhouse account there is a $50 fee every year (on top of all stock purchase fees and such), however, if I E-Register this fee would be waived (I am not clear if it is waived in perpetuity or just this year), so I will be E-registering, but this one point threw me for a bit of a loop.
So from this, gentle reader, I hope you have learned a few of the pit falls and points you should be taking into consideration when you go and set up your TFSA account with your savings institution of choice.
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December 29th, 2008 at 8:18 AM
What does “E-register” mean in this case? Does it mean applying for and setting up the account online?
December 29th, 2008 at 8:35 AM
My guess is it means I will only use the on line capabilities of TD Waterhouse, which seems odd, since that is what I do all the time, however, we shall see!
December 29th, 2008 at 8:52 AM
I wasn’t impressed with TD’s $50 a year charge, so I won’t be setting up my TFSA with them.
December 30th, 2008 at 7:17 AM
remember to also inquire about the termination fees that are imposed on TFSA’s
January 2nd, 2009 at 5:17 AM
It means you have to sign up for TD’s e-services, so you will only get your statements and tax documents electronically — saves them on postage. There’s a link to “e-services” at the top of your webbroker page when signed in.
You can still trade via the phone/talkbroker (and in fact, this will be the only way to trade in a TFSA for the first month), but the commissions for that are higher than online.
January 7th, 2009 at 11:39 AM
I was told by a TD rep that e-Services only offers a limited selection of investments that can be purchased. Unfortunately I am new to all of this, so I went ahead with setting up the regular TD Waterhouse TFSA account anyway. I haven’t put in any money yet, so can I still back out of it? I would like to avoid the $50 fee if possible — that’s essentially 1% of the full $5000!