TFSA question

[lucy16076]

Thank you all for your help. I think I've misunderstood & been misinformed. Apparently it's been partially deposited into a "locked in" fund & the rest in a "not locked in" fund.. ?? I will seek out more answers & get to the bottom of this!

Turns out my advisor put the money in my TFSA into a DSC mutual account so they attract fees upon withdrawal if I don't leave the money alone for 5 years!! Now she's changed my monthly deposits into FEL funds to avoid this fee...but...my question is, can I deposit into a bank TFSA & not pay fees at all?? She said that she could earn me more money than the bank interest rates, but is that true & if so, will the fees eat into that gain??

[Brad]

Wow that's crazy, I wonder why she would put your money into a type of mutual fund that charges fees upon withdrawal, when there are hundreds of mutual funds out there that don't charge any fees to withdraw (no-load mutual funds). I'm guessing she got a higher commission when she got you to agree to put money into that DSC fund than she would if she had recommended a different fund. She was looking out for her best interest, not yours.

If you want to minimize fees, you can look into index mutual funds. Your mutual fund is probably a managed mutual fund. Look into what the management fee is on your mutual fund (it's called the MER), if it's managed it's probably over 2%. That means whatever money you make in interest, 2% is taken by the bank as a management fee. Index funds usually have a management fee of around 1%. Each of the big banks has their own set of index mutual funds.

[frugal50]

the TFSA rocks!
i contribute the maximum every year
it really helps during tax time.

[marstec]

the TFSA rocks!
i contribute the maximum every year
it really helps during tax time.

TFSA's have nothing to do with tax time, frugal. You are probably meaning an RSP?

lucy,
Was it a back-end load fund? You are penalized if you take it out before the say, six year, term. Front-end loads charge you right off the bat with a certain percentage. I've only ever bought no-load funds. You need to read up on what funds are best for your needs. Always check for yourself, never assume that any financial person will have your best interest at heart.

[frugal50]

TFSA's have nothing to do with tax time, frugal. You are probably meaning an RSP?

lucy,
Was it a back-end load fund? You are penalized if you take it out before the say, six year, term. Front-end loads charge you right off the bat with a certain percentage. I've only ever bought no-load funds. You need to read up on what funds are best for your needs. Always check for yourself, never assume that any financial person will have your best interest at heart.

TFSA has everything to do with tax time, they can't tax you on the money your saving
I'm not talking about RRSP , I know what that is and I have that too.

[corezz]

Absolutely. The big issue is to remember to NOT go over when you do contribute. Most friends i know also dont realize that when you contribute and then withdraw that the space is not made available again until the following year. They end up thinking it is a regular savings accoutn which it is not. And so when they deposit back in and potentially go over they scratch their head wondering why CRA charged them interest.