If you had a TFSA with a good chunk of money making 3.35% interest, would you put it towards a 3.50% LOC? We have a TFSA which comes due May 2016 but are able to take it out this year without interest penalty.
Printable View
If you had a TFSA with a good chunk of money making 3.35% interest, would you put it towards a 3.50% LOC? We have a TFSA which comes due May 2016 but are able to take it out this year without interest penalty.
To pay off a debt, absolutely. Anyway you look at it, the interest you gain is offset by the interest you're paying.
Assuming you have more cash than what you have in your TFSA (in case of needing some liquidity), yes.
The other thing to consider is that if you remove your money from your TFSA and then want to start contributing to it again after your LOC is gone, you might not have the contribution room. But you will gain that room back January 1st, 2015, plus your additional $5,500 for that year. Just a word of warning.
Momof5boys, I too would pay down the line of credit. Reducing debt I always a good thing. You will save on that LOC monthly interest and as long as you wait until 2015, you can catch up your TFSA contribution, as you can.
Where are you earning 3.35% interest in a TFSA? I need to look into opening one there!