Q&A: TFSA fees

Question: I have heard that TFSA accounts are trustee accounts which could be subject to trustee fees from my financial institution resulting in an account that does not make financial sense in a low rate interest environment. – W.M., QC

Gordon Pape answers: There are two parts to this answer. First, it is correct that some TFSA accounts will have fees attached. Ask about this before you set up a plan. The policy will vary from one company to another and you may find several different plan choices within a single financial institution.

Second, the phrasing of your question suggests that you are under the impression that TFSAs can only hold interest-bearing investments. This is not the case. You can invest in anything that is allowed in RRSPs including stocks (dirty word right now, I know), mutual funds, income trusts, etc. Of course it makes little sense to pay a 1 per cent fee to invest in a 2.5 per cent savings account but if you choose other types of securities it’s a different story.

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