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General => Lobby => Topic started by: Lazybones on July 07, 2009, 09:44:34 PM

Title: Do you pay your bank to hold your money?
Post by: Lazybones on July 07, 2009, 09:44:34 PM
Related but different to the thread about money orders I was wondering how many here pay bank fees vs using free banking?

I have been using a free bank account for just about as long as one has been available to me, so far I have found very few cons to this system.

For the sake of being honest here are the cons to free banking that I have found:
- No bank tellers, making it difficult to do US funds or bank drafts (I however almost never need this)
- Less flexible on loans and overdraft, they do everything by computer
- Not all services are free, special services such as money orders ect may have fees
- Limited locations to get new cards reissued (I use PC Financial so this means going to a Super Store)
Title: Re: Do you pay your bank to hold your money?
Post by: Mr. Analog on July 07, 2009, 09:52:59 PM
I handle most of my investments through CIBC Imperial Service so... I get some benefits (lower interest rates on some CIBC services, online banking, a personal investment advisor, etc).

I dunno, it's kinda nice having someone let you know when the bank is offering different services and they know what to keep an eye on for me. Rather than a newsletter or some other automated service I guess.

They market it as personal banking for the masses but it's not all that razzle dazzle if you ask me.
Title: Re: Do you pay your bank to hold your money?
Post by: Lazybones on July 07, 2009, 10:13:10 PM
If you are processing your investments through them then you probably are getting some additional service out of the deal, but are those investments earning more than what they charge you in fees?
Do you get the following with your account?
- Free cheques
- Free online access
- Free phone banking
- Free unlimited interac at retailers
- Free unlimited automated banking at all branch bank machines
- Cash/points for groceries just for using their services?
If not how much per month do you pay over the base fee for use?
Title: Re: Do you pay your bank to hold your money?
Post by: Thorin on July 08, 2009, 10:38:15 AM
My first-ever Canadian bank account was with the Royal Bank, only because it was nice and close to my house.

Since then I've been a (mostly) loyal RBC customer.  Nowadays I have a mortgage, a couple of RRSP accounts, and seven or so bank accounts with them (remember, I have four kids that each have their own account).  I think there's also RESP accounts in trust for my kids there.

We have an everyday-use chequing account with the RBC No Limit Banking (http://www.rbcroyalbank.com/products/deposits/no-limit-banking.html) package.  Normally this package is $10.95 a month, but if you have a mortgage and an RRSP account and a chequing account with them, they waive the fee.  If I didn't have these three things, you can bet your sweet patootie I wouldn't have said package!  Anyway, we also have an eSavings (http://www.rbcroyalbank.com/products/deposits/e-savings.html) account, which used to offer 3.25% annual interest but is now apparently only paying 0.75% annual interest (damn economy!) - the idea, of course, is to transfer any money we don't need to spend right away into this short-term savings account.  But at the interest rate they're paying now, it's really not worth it.  Damn, I wish I would've known earlier that they would drop the interest rate.  Maybe it's time to start using money market mutual funds for this again.  Anyway, I digress.

The No Limits package offers us unlimited transactions (including Interac), free online and telephone banking, and free "assisted transactions" (meaning teller service).  No cash or points for using their services, though.  The real difference between your PC Financial free package and my RBC No Limit Banking package is that:
1. I have to have three different types of accounts with them for it to be free
2. I don't get cash or points for groceries from them
3. I have to pay for my cheques
4. RBC's bank machines are the most prolific in the country so I'm more likely to find a bank machine from my bank nearby
5. A couple of times now a manager has pushed my loan application through even though I was officially over the threshold where they are supposed to say no - due to an excellent credit rating

I think it's this last reason that sells me on RBC, but only because I make sure to keep my credit rating in good health.  As an example, when I applied to re-finance my mortgage a couple of years ago, my Gross Debt Service Ratio was 34%.  Banks typically don't let you get a mortgage with a GDSR higher than 32%.  But they looked at my credit rating, punched in a special override, and voila!  I drive a big Suburban now :P
Title: Re: Do you pay your bank to hold your money?
Post by: Lazybones on July 08, 2009, 10:55:58 AM
Sounds like a good deal, and you point about the Bank Manager is probably the single biggest difference I have found with using a virtual bank like PC Financial vs a full bank or Credit union. Humans will give you overrides if you have been a good customer, PC is very rigid, it is all about the numbers and the credit check, which isn't much of a problem if you have very good credit, but to begin with I had a hard time getting things like overdraft protection and higher instant withdrawal amounts.

My Free Savings accounts (they offered a new one so I added it) where at Prime -1  (with a balance over 1000) and prime -2 on the other. This was really good compared to most banks until the prime rate tanked and interest became basically 0.

As for bank machine access, with PC you get access to machines at Super Store, and ALL CIBC machines for free. Of note CIBC has bank machines in every 7-11 so they are very well spread out.

PC Financial Points program also has some really good returns if you stack up your services right. I am getting between $20-40 /mo in PC Points that I can spend in store on anything. Some months are a little lower but I have been hitting lots of promos for extra points lately.
Title: Re: Do you pay your bank to hold your money?
Post by: Thorin on July 08, 2009, 02:28:35 PM
To be honest, the PC Financial package you use is in my eyes better bang for the buck than the RBC package I use.  I'm just too lazy to go and switch to make $20 a month in PC Points, especially since my family is a Walmart family.
Title: Re: Do you pay your bank to hold your money?
Post by: Mr. Analog on July 08, 2009, 07:20:24 PM
Quote from: Lazybones on July 07, 2009, 10:13:10 PM
If you are processing your investments through them then you probably are getting some additional service out of the deal, but are those investments earning more than what they charge you in fees?
Do you get the following with your account?
- Free cheques
- Free online access
- Free phone banking
- Free unlimited interac at retailers
- Free unlimited automated banking at all branch bank machines
- Cash/points for groceries just for using their services?
If not how much per month do you pay over the base fee for use?


You know I think I do get most of those, it's been ages since I looked it up though.