How to Transfer a TFSA to Another Bank (and How Long It Takes)

To move a TFSA to another bank, credit union or brokerage, you ask the receiving financial institution to do a direct transfer, and the money you move that way doesn’t affect your TFSA contribution room. You need a TFSA at the new institution to receive it, because a direct transfer goes from one TFSA to another. Your investments can move as they are, without being sold, in what is called an in-kind transfer, although the types of transfer an institution offers may vary. Withdrawing the money yourself and depositing it at the new institution is not a direct transfer: the deposit counts as a new contribution.

How do I request a TFSA transfer?

1. Have a TFSA at the new institution. The money moves from your TFSA to another TFSA of yours, so open one there first if you don’t have one. Opening your first TFSA covers how.
2. Ask the new institution to do a direct transfer. The CRA’s instruction is to make the request to the receiving financial institution, not the one you’re leaving.
3. Choose what moves and how: the full account or a portion of it, in kind or in cash (cash or in kind).
4. Check that your details match on both accounts. A mismatched name or SIN, or an incomplete form, can hold a transfer up (what slows a transfer down).
5. Check what arrives against your last statement from the old account (after the transfer).

The CRA’s form T2033 isn’t the form for this: it records direct transfers of certain property from an RRSP or RRIF to another RRSP or RRIF, or to buy an eligible annuity. If you’re moving an RRSP too, how to transfer an RRSP covers that account.

Why does it have to be a direct transfer?

• A direct transfer between your own TFSAs has no tax consequences and does not use room.
• Withdrawing the money yourself and depositing it at another institution counts as a new contribution, even if the amount is the same.
• Without enough unused room, that deposit is an excess, taxed at 1% of the highest excess each month.

A direct transfer between your own TFSAs is a qualifying transfer, which has no effect on your available contribution room, so it isn’t added back to your room the following January 1 the way a withdrawal is. The TFSA penalty calculator works out the monthly tax on an excess and how to remove it.

The same kind of direct transfer moves money between two of your TFSAs at one institution; having more than one TFSA explains how several accounts share your room, and what doesn’t use or create room lists what else leaves your room unchanged.

Can I transfer my investments without selling them?

The CRA says most financial institutions offer three types of TFSA transfer, but this may vary:

Some holdings can’t move in kind: one institution, for example, says its own mutual fund portfolios and GICs can’t be transferred in kind. When investments are sold inside the TFSA for a cash transfer, the gains are generally tax-free, like other income earned in a TFSA. A partial transfer moves only the part you name, which can let you move the rest of an account while a GIC stays behind until it matures (GICs).

Moving shares from a non-registered (taxable) account into a TFSA is not a TFSA transfer but an in-kind contribution, which counts against your contribution room and is treated as a disposition of the shares at their fair market value at the time; working out your room shows how contributions count.

What if my TFSA holds a GIC that hasn’t matured?

If your TFSA is locked into an investment for a specific period, the CRA says you may need to discuss options with your issuer, and the issuer may charge a penalty or fee for closing the account. A partial transfer can move the rest of the account now and the GIC after it matures. GICs in a TFSA covers terms and early redemption.

Does it cost anything to transfer a TFSA?

Some financial institutions may charge a fee for processing a transfer. One institution, for example, says it charges a fee to transfer registered funds out. A receiving institution may offer to reimburse the fee you pay the old one, with conditions, such as a minimum amount transferred in. The best TFSA accounts compares providers.

How long does a TFSA transfer take?

Firms’ own estimates vary. One firm’s guide says a TFSA transfer typically takes 1 to 4 weeks, depending on the institutions involved and the type of transfer, while another says transfers from mutual fund companies, insurance companies and financial institutions without electronic processing generally take 2 to 6 weeks from receipt of the request. A direct transfer doesn’t affect your contribution room, so the date you pick doesn’t change your room the way the date of a withdrawal does.

What slows a transfer down?

• GICs and other holdings that can’t move electronically. Transfer requests that include GICs may take longer to complete. GICs, segregated funds and mutual funds not supported by Fundserv can’t go through ATON, the automated transfer service investment dealers use.
• Paperwork that doesn’t line up. An incomplete transfer form, or a name or SIN on the old account that doesn’t match the new one, are among the reasons a delivering institution may reject or delay a request.

After the transfer

Compare what arrived with your last statement from the old account, and ask the old institution how it handles interest or dividends paid to the account after a full transfer.

Can I move money from a TFSA to an RRSP or FHSA?

A qualifying transfer goes directly from one TFSA to another TFSA, so money goes from a TFSA to an RRSP or FHSA as a withdrawal and a new contribution to the other account. That contribution counts against your RRSP deduction limit or your FHSA participation room, and the amount you took out of the TFSA is added back to your TFSA room on January 1 of the next year (when withdrawn room comes back).

Going the other way has a tax cost: the CRA treats RRSP investments moved to a TFSA as withdrawn from the RRSP at fair market value, and the withdrawal counts as income. RRSP withdrawal rules covers that tax.

What about moving a TFSA to a spouse after a separation?

On a divorce or the breakdown of a marriage or common-law partnership, money can move from one person’s TFSA to the other’s by a direct transfer that doesn’t affect either person’s contribution room, if the CRA’s two conditions are met; how a TFSA is divided sets them out. Giving money to someone else, such as a spouse or a child, for their own TFSA is not a transfer between TFSAs: see funding a spouse’s TFSA, and for a TFSA after its holder dies, what happens to a TFSA when you die.

Other TFSA questions are answered on the TFSA hub.