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Opening a CIBC TFSA Tax Advantage Savings Account is your opportunity to get smart with your savings. In fact, you get tax-free savings for life when you open this profitable savings account.
To open the CIBC Tax Advantage Savings Account, you must be a Canadian of 18 years or older. You can start with as little as $25, earn 0.50% interest tax-free, and pay nothing monthly.
You also get tax-free withdrawals, but you’ll have high transfer fees. Opening this account is easy, but you’ll have to own a personal CIBC (Canadian Imperial Bank of Commerce) account first.
There are quite a few advantages, disadvantages, and fees associated with this account. You’ll find them all in this article, along with a guide on how to open the account and alternatives you can consider.
Features of the CIBC TFSA Tax Advantage Savings Account
Below are some of the features of the CIBC Tax Advantage Savings Account that make it one of the best CIBC savings accounts:
- Minimum investment of $25
- Interest rate of 0.50%
- The tax-free savings limit for 2023 is $6,500
- Online banking through the CIBC online banking platform
The pros of the CIBC TFSA Tax Advantage Savings Account
Opening a CIBC TFSA Tax Advantage Savings Account comes with many advantages for the average Canadian, such as:
Tax-Free Interest
Canadians earn tax-free interest daily when they save money in this account. The interest is then calculated and paid into their account at the end of every month.
Free Transfers from Another CIBC Personal Bank Account
If you don’t want to deposit money over the counter, you can transfer it from another CIBC personal account. All cash transfers from a personal CIBC account into this tax-advantaged savings account are free.
Lifetime Contributions Are Available
The CIBC Tax Advantage Savings Account allows you to open a tax-free savings account and continue operating it until you die. It has an advantage over the Registered Retired Savings Plan (RRSP), even when it offers tax-free heaven.
Tax-Free Withdrawals
The CIBC Tax Advantage Savings Account doesn’t charge any tax on your withdrawals. The account owners can also withdraw their funds anytime without any issues. These individuals can also refund those withdrawn funds the next year or much later.
No Monthly Fees
You’re exempt from all monthly account fees when you operate a CIBC tax-advantaged savings account. So, you can earn interest when you save into this account without paying anything.
The cons of the CIBC TFSA Tax Advantage Savings Account
Below are a few disadvantages that come with opening this CIBC account.
High Transfer Fee
Transferring even a little of the funds in your CIBC TFSA account to another financial institution requires a $100 transfer fee. This can be quite a disadvantage when the funds you want to transfer are less than the transfer fee.
Withdrawals from Over-Contributions Are Taxed
CIBC takes the contribution room for a TFSA account very seriously. So, you’ll be taxed if you over-contribute without being aware of your contribution room. Withdrawing these overpayments will also attract taxes.
CIBC TFSA Tax Advantage Savings account fees
The CIBC Tax Advantage Savings Account requires you to pay specific fees when you own such an account. The fees that you’ll encounter with this account are:
- Monthly fees: $0
- Transfer of funds from your account to another financial institution: $100
- Monthly taxes on over contributions: 1% of the extra amount
- Transfer from another CIBC personal account to your TFSA account: $0
CIBC TFSA Tax Advantage Savings Account special offers
There are no special offers available at the moment for Canadians who open a CIBC TFSA Tax Advantage Savings Account.
Other CIBC account options
Is the CIBC Tax Advantage Savings Account not up to your specifications? Then you can consider these alternatives.
- CIBC eAdvantage Savings Account: This savings account charges no monthly fees but requires a $5 charge for each transaction. The interest on this account is in tiers and increases with your savings.
- CIBC Smart Plus Account: This chequing account offers a $350 special cash for new account owners. It comes with a $29.95 monthly fee and offers unlimited transactions.
How to open the CIBC TFSA Tax Advantage Savings Account
Before opening the CIBC TFSA Tax Advantage Savings Account, you must ensure you meet a few requirements. This includes residing in Canada, being 18 or older, and having a Social Insurance Number (SIN). You’ll also need to already have a personal CIBC account.
If you fulfill these requirements, you can open your TFSA savings account through the steps below:
- Visit the CIBC website.
- Go to the TFSA Tax Advantage Savings Account page.
- Click on “Open on Contribute.”
- When you’ve reviewed the terms and conditions, click “Continue” to proceed.
- You can enter your account card number and password to speed up the application process.
- If this data is unavailable, you can enter it by hand. Name, age, profession, email, etc., are all examples of the kind of information required.
- Click “Continue” and fill in your contribution information.
- Accept the terms and conditions for opening this account and submit the form.
CIBC TFSA Tax Advantage Savings Account conclusion
If you’re a Canadian investor looking to build a tax-free nest egg, a CIBC Tax Advantage Savings Account is the way to go. There are no monthly fees, and you can save for the rest of your life. Open a CIBC account and easily get your own CIBC TFSA Tax Advantage Savings Account.
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