Étienne finds a savings account with a better rate at another institution. Both accounts are TFSAs. He plans to withdraw $8,000 from the first and deposit it into the second that afternoon.
The matching account labels do not make those two transactions a qualifying transfer.
Ask the receiving institution to arrange it
A direct transfer between your own TFSAs, handled by the institutions, does not use your available contribution room. Étienne asks the receiving institution for its transfer process before touching the balance himself.
He confirms the account numbers, whether the transfer covers the full balance or part of it, and whether investments will move as holdings or be sold. Fees, investment restrictions and processing time are practical questions to settle with the institutions.
Understand the withdrawal-and-deposit alternative
If Étienne withdraws the $8,000 personally, the subsequent deposit is a new contribution. He needs enough unused room at that time. The withdrawal generally adds room back only on January 1 of the following calendar year.
If he has only $1,000 of room, the same-day $8,000 deposit can create a $7,000 excess. Moving the money between banks does not create an exception.
A direct transfer avoids that particular contribution-room problem. It does not create extra room for an additional deposit alongside the transfer.
Keep a single record across institutions
Étienne keeps the request and completion confirmation, then checks that the institutions recorded a transfer rather than an ordinary withdrawal and contribution. He continues tracking genuine deposits and withdrawals across all his TFSAs.
The CRA account is helpful, but issuer reporting is not a live transaction feed. His own current records remain necessary before another contribution. If the money has already passed through chequing, he checks the actual room and excess-contribution rules instead of assuming the bank can simply rename the transaction.
