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TFSA News and Stats At-A-Glance

ING Leaps Out of the TFSA Gate Strong

ING Direct says about 170,000 customers have signed up since early October.

Royal Bank is Happy with Numbers

At RBC Direct Investing in Toronto, for example, Donna Nelson, vice-president of strategy, says more than 2% of her company’s clients opened TFSAs in the first two weeks of January — an impressive number considering RBC Direct Investing is one of Canada’s leading online brokerages.

RBC’s annual RRSP poll, conducted by Ipsos Reid, showed only eight per cent of Canadians who plan to open aTFSA intend to reduce their RRSP contributions.Some 36 per cent of those aware of theTFSA say they will maximize contributions to both accounts, while 23 per cent plan on moving money from non-registered accounts into aTFSA instead.

The general thought is to invest insideTFSAs for shorter-term things like a vehicle or special vacation, while putting funds into RRSPs for long-term retirement. Yet the RBC survey indicated 44 per cent of Canadians who intend to op en a TFSA want to use it for retirement, including 53 per cent of Canadians aged 18 to 34,and 57 per cent of those between 35 and 54.

Scotia Bank is Happy About TFSA

Scotiabank’s launch of the new Tax Free Savings Account exceeded expectations. More than 157,000 new accounts were opened in the first month, with more than half of these accounts having an average balance of close to $4,300. The supporting $5,000-a-day giveaway contest generated more than 107,000 entries.

CIBC Predicts Multi-Billions of Dollar Savings

CIBC World Markets report – the investment house predicts Canadians will squirrel away US$20-billion in the coming year and US$115-billion in the next five years.BMO says TFSA Popular with 65+

According to a survey from BMO the new Tax-Free Savings Account is most popular with Canadians 65 and older. One-third of people 65 and older have opened a TFSA and one-quarter of those 55 to 64 have an account. Fifteen per cent under the age of 45 have a TFSA. Forty per cent of Canadians say their retirement is their savings goal for their TFSA.

20% Interest Amongst Canadians

For a country as highly taxed as Canada amazingly only 1 in 5 Canadian adults has yet to claim their latest and possibly greatest tax break, the Tax-Free Savings Account (TFSA).

According to a Leger Marketing survey 78% of 1,541 Canadians polled had not opened up a TFSA as of mid-March 2009. Of the majority that does not yet have a TFSA account, 44% cite lack of money for not taking advantage of the accounts.

Those earning less than $40,000 a year are even less likely to take advantage of this tax break: 60% of this group blamed lack of funds; 57% of widows and divorcees also cite lack of money as their reason for not opening up a TFSA. TaxFreeSavingsAccountInfo argues that you can’t afford NOT to open up a TFSA.

According to Wilmot George, director of tax and estate planning for Mackenzie Financial Corp., 47% of Canadians consider the tax-free savings of TFSAs to be their most appealing feature, a percentage that hits 62% for those who already have one.

However, 20% of TFSA holders aren’t sure how they will use them and 19% expect to use them only for emergencies.

More than half (51%) are using them for short-term savings, held in cash, money market mutual funds or short-term GICs. But 36% plan to use them for long-term goals such as retirement or education. Cash and cash equivalents are not the most suitable way to invest for the long term, George says.

The Leger Marketing online poll was conducted from February 5 to 9, 2009 and is based on a sample of 1,502 Canadians aged 18 and older. The margin of error for a sample of this size is +/- 2.5%, 19 times out of 20.

Average Dollars Invested

The results of a survey conducted by teleVox, Harris/Decima are based 1,012 interviews between March 5 and 8. The margin of error of 3.1%, 19 times out of 20.

17% of Canadians invested in new tax-free savings accounts (TFSA), contributing about $3,471 each of the maximum eligible amount of $5,000, the survey found.The survey also found that 16% of Canadians decided to “park” their RRSP contributions in 2008 “by investing in short-term and typically low-risk vehicles, such as bonds and money market funds,” Investors Group said. That’s up from 14% the previous year.

“Of those who park funds, 36% say they will park their investment for one year or less, 39% for more than one year,”it said.

This entry was posted on Saturday, June 27th, 2009 at 8:49 am and is filed under Advice. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

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