TFSA payout .... ?

zerocool2009

zerocool2009

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Good morning everyone,

So I did a test with a TFSA account, and see the interest paid out into my own (cheque account).

Thinking about it, that is the DUMBEST account EVER.

Selecting a month or bi-annually or annually, you will lose the power of the TFSA forsure.

I assume the money paid out is interest free (and it really doesnt effect the overall view), except that compounding wont be done
 
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you can see the interest rate up front? the point of the account is that it is tax free. were you planning to get rich on a 33k a year saving?

I think any interest paid out into another account will NOT be tax free? (obviously considering normal limits)
 
LOL .....

Nothing to do with a planning to get rich.

I have 3 TFSA's (and want to combine all with a good interest rate) and compounding over time.

Well, its is a TFSA account afterall, so I think the interest would be tax free

My question that I wanted to ask, the payout doesnt effect my R500 000 limit over time
 
zerocool2009 said:
LOL .....

Nothing to do with a planning to get rich.

I have 3 TFSA's (and want to combine all with a good interest rate) and compounding over time.

Well, its is a TFSA account afterall, so I think the interest would be tax free

My question that I wanted to ask, the payout doesnt effect my R500 000 limit over time
Click to expand...

No
 
zerocool2009 said:
My question that I wanted to ask, the payout doesnt effect my R500 000 limit over time
Click to expand...

It doesn't affect the limit. Only, as you realised, you are missing out on the "free" additional contributions in the form of compounding.
 
Tomtomtom said:
It doesn't affect the limit. Only, as you realised, you are missing out on the "free" additional contributions in the form of compounding.
Click to expand...

Correct. Well, so my advice would be before opening a TFSA (read the @#$@#$@#$ small print) L O L
 
So to confirm, you might get 8.x% .... but you will lose the compounding over time
 
zerocool2009 said:
LOL .....

Nothing to do with a planning to get rich.

I have 3 TFSA's (and want to combine all with a good interest rate) and compounding over time.

Well, its is a TFSA account afterall, so I think the interest would be tax free

My question that I wanted to ask, the payout doesnt effect my R500 000 limit over time
Click to expand...

I am curious, why open 3? do they stack?
 
Keep all the money in even your gains. If you have 3 you are doing it wrong.
 
Steamy Tom said:
I am curious, why open 3? do they stack?
Click to expand...

I opened one many years ago (buying stocks) with provider A
then I opened up another one (buying other stocks), with provider B
I was now looking at provider C (having it as a fixed rate).
 
And the nice think is (we can move TFSA's around) ... My view is, before we hit "junk" status, to move it to something fixed
 
Steamy Tom said:
you can see the interest rate up front? the point of the account is that it is tax free. were you planning to get rich on a 33k a year saving?

I think any interest paid out into another account will NOT be tax free? (obviously considering normal limits)
Click to expand...

No, but the whole idea is to contain it INSIDE the TFSA to reap the rewards of tax free compound interest.

Paying it out without the investor asking for it to be done is just daft.

You would ultimately get richer for using as many tax friendly vehicles as possible.

Remember everything inside the TFSA is tax free, not just what you put in initially.

You could get quite rich over 50 years of paying no tax....
 
zerocool2009 said:
And the nice think is (we can move TFSA's around) ... My view is, before we hit "junk" status, to move it to something fixed
Click to expand...

Just be mindful everyone charges for that moving around and in doing so you might just about lose all the benefits you gained.

I’m of the opinion you should have only one tax free account/portfolio.

You can move around inside it with minimal cost and still diversify as need be.

I mean if it goes all pear shaped you could for instance keep it cash only inside Easy Equities and get quite a decent rate and then buy low again later etc.
 
I totally agree with you SauRoNZA ...

What i can say ... paying school fees in this regard.

The money is tied up for 1 year, so when done, will just do a transfer...

I am looking for a TFSA fixed deposit, and African Bank was a good way to go (until I saw how they are doing things)
 
SauRoNZA said:
Just be mindful everyone charges for that moving around and in doing so you might just about lose all the benefits you gained.

I’m of the opinion you should have only one tax free account/portfolio.

You can move around inside it with minimal cost and still diversify as need be.

I mean if it goes all pear shaped you could for instance keep it cash only inside Easy Equities and get quite a decent rate and then buy low again later etc.
Click to expand...

I was planning a TFSA move from provider A to B (but now on hold again after finding out the facts)
 
Been chatting to African Bank now since yesterday to get a straight answer how the product (tfsa) work

I cant figure out the following :

1) Interest is earned, but not compounded by the sounds of it
2) After 1 year, I have the option to reinvest or move (but will interest be paid out into the account after year 1 or when it only expires).

Its very difficult to get a straight answer from these guys
 
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