Big question when you decide on a TFSA

[zerocool2009]

Everyone by now heard about the tax free savings account (where you can invest and benefits over the years are for free and snowballs)

To my shock I found now out that one can move shares / unit trusts / etf's from one firm from one to another (without selling)

I took a knock of roughly R4000 in broker selling / buying fees know when I moved my TFSA recently

My point with this thread, if you consider a TFSA, ask yourself (what if you wanna move, do you need to SELL first ?)

This goes hand in hand with a RA (and getting ripped off).

So be warned if you already have one (a TFSA), firms will make money out of you just like RA's

 

[koffiejunkie]

As far as I know you can't move funds from one provider to another, just the money. Unless something changed since the last time I found out (or last week?). You definitely cannot move shares, since you can't have shares in a TFSA

On the topping of selling to fund the TFSA, I would just add the following: Aside from looking at the costs, also consider the cost basis of your current positions. For a fund that's going up and that you're still regularly paying into, you'll be buying at a higher price than the cost basis. Sell from this just enough to use up your captial gains allowance. This will raise your cost basis and save you a bit of tax later when you sell again.

 

[zerocool2009]

Guess again, that is what I thought too until I queried it from my new service provider.

To my shock I got ripped off "selling" my ETF's .... moved it (the cash value), and bought again with the new service provider

What I didnt knew : WE CAN MOVE EFT'S FROM PROVIDER A TO B (WITHOUT SELLING).

I am now R4000 down (selling and buying costs), something new that I learned

 

[zerocool2009]

Example :

lets say you have Ash top40 and ash midcap with provider A, and the same with provider B ... you can move the etf's from A to B without selling => WITHIN TFSA's

 

[zerocool2009]

What I am trying to explain ... when you start a TFSA ... look at a few points (but keep in mind what if you want to move it).

Example :
1) Does the product cost you money per month
2) Buying and selling costs
3) If it interested based, how long is the capital "fixed" (meaning locked in)
4) If you wanna move, is there any selling/buying involved when you want to "move" (if it is share/etf based)

 

[koffiejunkie]

Good to know. It makes sense that you can move ETFs between them, since you can do that between brokers.

 

[r4nd0m]

Well then, CoreShares and/or ABSA screwed me over then.

Moved my portfolio to ABSA and they (not sure who) liquidated all my ETFs. Had to buy them back as I only had a normal 'deposit' credited to my brokerage account.

This was about a year+ ago though, when the ability to transfer just became available. Probably streamlined and more refined now.

 

[SauRoNZA]

While you can move ETF’s I would highly recommend you don’t go down this road and rather plan accordingly up front.

It was an absolute **** show when I did this and I’m still convinced about R800 went missing somewhere in the middle which I just gave up on eventually as it wasn’t worth my time any more.

 

[RVQ]

Example :

lets say you have Ash top40 and ash midcap with provider A, and the same with provider B ... you can move the etf's from A to B without selling => WITHIN TFSA's

This is not well known and news to me.

Now I'm wondering if one can sell one EFT for a different one within a TFSA?

 

[Mylky]

@zerocool2009 is right. Read the fine print of your service provider's Ts&Cs for the TFSA. Some very clearly state you can transfer etfs (some stylised as 'investment TFSAs' as opposed to 'cash/bank tfsas') like-for-like within the wrapper, or transfer cash or some combination of the two. It's usually the banks and the Unit Trust loyalists who can't because whatever you invested in probably doesn't exist in that exact format (for example an Alan grey Unit Trust) at the broker you are moving to and vice versa.

I still am upset that FNB made me liquidate my AshT40 and AshMid when I transfered to EE since EE accepts ETF transfers and has those two Etfs available. Lesson learned, of course!, and worth the money spent to have the necessary reminder to always ask what happens when I want to exit before I enter.

Well then, CoreShares and/or ABSA screwed me over then.

Moved my portfolio to ABSA and they (not sure who) liquidated all my ETFs. Had to buy them back as I only had a normal 'deposit' credited to my brokerage account.

This was about a year+ ago though, when the ability to transfer just became available. Probably streamlined and more refined now.

@r4nd0m I suspect you're right about improved streamlining now that the legislation is a little less fresh. But EE (and I suspect Absa too) has always accepted "unit" ie ETF transfers, it's the sending/transferring institutions that have been dragging their feet.

This is not well known and news to me.

Now I'm wondering if one can sell one EFT for a different one within a TFSA?

@RVQ could you rephrase this please? I'm not sure I'm understanding. Are you talking about having two different TFSAs at the same time and exchanging Etfs between them? I'm not sure that would be allowed, at least not without significant headaches. Or am I not understanding?

 

[beefymoocow]

While you can move ETF’s I would highly recommend you don’t go down this road and rather plan accordingly up front.

It was an absolute **** show when I did this and I’m still convinced about R800 went missing somewhere in the middle which I just gave up on eventually as it wasn’t worth my time any more.

I was gonna max my fnb tax free savings account to to get the points and move it to EasyEquities. Definitely not gonna do that any more.

Has anyone switched the type of funds but with the same provider and how much will that cost.

 

[zerocool2009]

I was gonna max my fnb tax free savings account to to get the points and move it to EasyEquities. Definitely not gonna do that any more.

Has anyone switched the type of funds but with the same provider and how much will that cost.

If you have a EFT (TFSA), lets say with FNB, and you want to go the fixed deposit route (TFSA), you need to sell.

I honestly think as RA's evolved, so will TFSA's (meaning, getting ripped off and your eyes only opens up years after the fact)

 

[RVQ]

@RVQ could you rephrase this please? I'm not sure I'm understanding. Are you talking about having two different TFSAs at the same time and exchanging Etfs between them? I'm not sure that would be allowed, at least not without significant headaches. Or am I not understanding?

Having a single TFSA with just EE for example, then selling shares in say S&P500 and using the proceeds to buy S&P Global

 

[3WA]

Having a single TFSA with just EE for example, then selling shares in say S&P500 and using the proceeds to buy S&P Global

Won't affect your limits. The sale will payout to your available funds within your TFSA, and then you can buy something else without the funds ever leaving the tax-free wrapper.

 

[Mylky]

Having a single TFSA with just EE for example, then selling shares in say S&P500 and using the proceeds to buy S&P Global

You can buy and sell within the TFSA as much as you like. No tax effect, although the fees would be something to keep an eye on if you plan to do it a lot.