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If I make a TFSA withdrawal and wish to re-invest the following year, do I have to re-invest with the same institution, or can I change to one offering a better rate?

If I have already made this year's contribution of $5,500, can I make a withdrawal without penalty from an account at a different institution that offers a lesser rate?

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As I'm sure you know if you withdraw from a TFSA you can only reinvest it the next Calendar year (unless you have sufficient additional contribution space available).

You can split your TFSA between multiple institutions, and that makes no difference. The limits are on the total, but any withdrawal counts as a withdrawal and any contribution counts as a contribution. You can move money from one institution to another but you must use the correct transfer form, otherwise it will count as a withdrawal and a contribution.

Any amount withdrawn in a calendar year can we re-invested the following calendar year in any institution.

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  • If a withdrawal from a TFSA is made late in the year can the full amount be re-invested in a different institution in January of the next without having tax implications ? Just trying to get a handle on what is legal and what isn't.
    – David Hogg
    Commented Jan 22, 2018 at 13:08
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    Yes. Added that into the answer.
    – DJClayworth
    Commented Jan 22, 2018 at 14:37

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