Having Multiple TFSA Accounts
It’s not necessary for you to have only 1 TFSA, although this is the simplest scenario. For various reasons you may want to spread your TFSAs out over multiple accounts:
- Maybe you want to spread out your investment strategies, for instance have a bank-issued TFSA for “safe” investments such as GIC’s, and a self-directed TFSA with Questrade for more aggressive investment types not offered by banks such as stocks.
- Maybe you want different accounts, each for a specific purpose (eg. one to buy a house, one to pay for your wedding, one to complement your RRSP, etc).
- Maybe you want some of your TFSA money to be more readily available for emergencies, and having an account with your “home bank” means you can get at it more quickly, while your other accounts (not with your home bank which means it may take a few days to get at your money) can be accruing higher interest over the longer-term.
Whatever the reason, if you decide you want multiple accounts:
- Make sure you don’t accidentally over-contribute! The current annual limit of $5500 is per-person, NOT per-account. Whether you have 1 account or 3 accounts, your annual limit remains the same! The various institutions where you have your TFSAs don’t share their information amongst each other, so it’s up to you to ensure you don’t go over the limit. And when you factor in any unused contribution room from previous years as well as withdrawals, it can become even more confusing.
- Check the fees associated with each account. Because you have multiple accounts, each with their own fees, they could eat into your investments and you may see a smaller profit than you anticipated.