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Do I have to pay tax if I transfer money from a savings account to a new TFSA?



Our response:

Savings account interest is generally compounded daily, monthly or quarterly. Interest earned on savings not held in a registered plan is fully taxable as income.

When you move investments, such as stocks, into a registered account like a Tax-Free Savings Account (TFSA), you may trigger a tax event. Transferring funds from a savings account would not be considered this same type of “in-kind” transfer. However, your bank should issue you a T5 slip at the end of the year to report any interest you may have earned on your savings account.

We are not able to provide advice and the information above is general in nature. Speak to a financial advisor or tax professional to learn more about making this type of transfer, and to learn the date at which taxable interest on your account will end.

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