This week I decided to get rid of my bank fees.
For a long time, changing my bank account wasn’t an option. I was in overdraft constantly and my current plan offers free overdraft protection. I either (1) didn’t have enough money to pay off the overdraft and close the account, or I had a positive balance, but I also had bills coming in that would more than drain my balance. That was back in the day, when I was money-stupid.
At the moment I have a chequing account with BMO, a chequing account and a savings account with my local credit union, and a savings account at ING Direct. The chequing account with BMO is the killer; they charge me $14.95 per month in bank fees. No more.
I have a few options:
- I can transfer my money, automatic deposits, and payments to my current credit union account;
- I can change the account type at BMO; or
- I can open a no-fee THRiVE account at ING.
(There are, of course, other choices and I’m open to suggestions, but these are the three most convenient options I’m aware of.)
BMO has an account called the Practical Plan which includes 10 transactions and costs $4 per month. This would save me $11 in bank fees, but I don’t want to pay a monthly fee at all. The minimum balance for this account, to avoid fees, is $1000 — but I don’t keep $1000 in my chequing account at all times. I thought that this meant BMO was out of the running, but then I learned about the BMO Club Sobey’s free chequing account. This account has no fee and no minimum balance, which is exactly what I’m looking for.
I use ING for my savings account and, thus far, I’ve been extremely pleased. As a result, I wouldn’t be reticent to open a THRiVE chequing account and go “bank-less”. There is an Exchange ABM at my credit union, so it wouldn’t be inconvenient to access my money. I don’t really have any “cons” as far as ING goes, except that I know they regularly give bonuses for adding a direct deposit to a new chequing account and they aren’t offering one at the moment. I was thinking of holding off until they have a promotion. ING also offers free “Whoops! Protection”, which is a nice feature that would allow me to transfer extra money at the end of the month from my chequing account to my savings account without worrying about accidentally going over my balance.
Sticking with the credit union is the least attractive option. The fees are way lower than my current BMO account ($0.60 per cheque and $4.50 per year for dues) but it’s definitely not a free account. I currently have a chequing account with them. Joe did a post about changing his account recently, so I won’t go into the details about the pros of going to a credit union vs. a bank, however I will mention that I did get $125 in investment share dividends last year. The inconvenience of my credit union is that everything (e.g. paycheque deposits) takes much longer to process than at BMO. Now that I am always in the black at the end of each pay cycle, however, I don’t need to worry about short delays here and there — and I could potentially enjoy even more member dividends by centralizing my banking there.
Whichever option I choose, by minimizing (or eliminating) my bank fees I stand to save over $150 a year. $150 a year in perpetuity simply for making a better decision and doing a couple hours of work? Sounds like a money-smart deal to me.
Nice article. But – and sorry to go all grammar-policey – you mean “reluctant,” not “reticent”….I don’t know why, but I seem to be encountering a lot of confusion between the two words lately; it’s starting to become a pet peeve of mine.
I should really get a chequing account that doesn’t require me to keep $1000 in there to avoid paying fees though.
I guess reluctant and reticent are just a couple of those words that are melding together but were never meant to, like imply and infer. And I’m usually so good with grammar…
I definitely agree, you should look at changing your account as well! That $1000 buffer you have sitting in your chequing account could be in a savings account building interest.
But I love having a $1,000 buffer in my checking account! It makes me not worry about anything crazy happening!
If you like to pay bank fees, try opening a business account. I don’t think the banks even worry about trying to look competitive with those.
BMO offers a pretty good business account believe it or not; $9.50/mo waived with a min balance and like 3 bucks a month for a US account. Still, I hope ING introduces biz banking.
President’s Choice has free banking (even cheque orders are free), convenience with the ability to deposit at any CIBC or grocery store bank machines, and excellent food bonuses for having a mortgage with them. In Alberta, you get a 7 cent per litre discount on gas at the PC Gas Bars with your PC bank card. It’s the best deal in banking I’ve found so far.
PC Financial also a good choice, free cheques, no regular fees, access to the CIBC bank machine network. Quite comparable to ING Thrive, but in my area, there are no Exchange ATMs, so PC Financial wins out for me. Thrive sounds all right for you, though, since the ATM is close at hand.
The Exchange ATM is actually at the credit union that I now have an account at, so switching to ING wouldn’t even affect my regular banking routine. I have heard good things about PC. I don’t really shop at Independent or No Frills, however perhaps if I were getting points I would. Thanks for the tip!
A word of warning if you decide to go with ING exclusively; their hold policy is such that it’s difficult to move funds quickly in and out of your account. I like the Thrive chequing account, but I keep a TD value account open (10 free transactions. $3.95 fee, waived with $1,500 balance) for added flexibility in moving my money around.
My suggestion would be to open a Thrive account and switch your BMO account to the Practical Plan. Then put $1,000 of your emergency fund into your BMO account to waive the fees.
Using both accounts side-by-side will let you see which one works best for bill payments, payroll, debit use, etc.
I have noticed that transfers take forever with my ING savings account. It’s not a huge problem, but it is definitely an inconvenience.
I checked out the President’s Choice Financial website to see what their holds are like, and it says that direct deposits are available immediately. PC wasn’t on my radar, but it is looking more attractive all the time…
I have had an ING checking account for some time….no fees and bonuses for signing up new members. No problem with moving my money around…I do it all on line. ING has better savings and checking account interest rates and also offer TFSA and RSP accounts with higher interest rates than regular banks. No fee checking (who pays anything by cheque anymore?) and high interest savings….ING has most of my money.
I recommend you hedge your bets. First off, get THRiVE, or PC’s free chequing account. It’ll be a great primary account.
I’ve lived with THRiVE for months and the only issue I had was related to setting up my mortgage — ING’s mortgage group and their deposits group are absolutely incompetent at communicating. The mortgage person never thought to tell me, even though I put the downpayment etc in my ING account, that they didn’t directly move money from my chequing. So like a few days before closing they say “Oh, take out a draft.” Based on my experience in banking — a draft is WAY riskier than a wire — I actually said “ARE YOU F***ING NUTS?” It was because they were too lazy to set up a wire, but I obviously flipped my lid that they’d recommend such an incredibly irresponsible strategy to deal with something, simply bc the work would be on MY plate (to go online and get a draft) rather than THEIR plate (completing a wire). I was livid because if I wasn’t as knowledgeable of a consumer, I would have followed their STUPID advice.
Next, close your current BMO chequing and get BMO’s free (Sobey’s Club) chequing. It’s an online bank — but you can pay a fee to do teller transactions. That way, you won’t pay fees and, once in a blue moon, when you need a money order or a draft or a certified cheque, you can go into a branch rather than hoping ING or PC is competent enough to mail you a draft.
These are good tips, Joe. I’m quite impressed you were able to hold your advice back for so long to allow your readers to weigh in on the issue before expressing your opinion. I haven’t looked into the Sobey’s account, I usually just go think of them dispensing bananas, not dough.
lol another thing I’ve learned in the last year of blogging (more in the last half since I’ve been able to enjoy sharing the work of others rather than just mine on a regular basis). This is definitely a scenario where there’s more than one correct answer. With PC points, e.g. from their bank account / MasterCard etc., you can use them at NoFrills. If you could use Sobey’s points at FreshCo (no idea if that’s possible) then it’d be an even better deal.
I did some quick research on their site and it doesn’t look like Sobey’s points can be used at Freshco, at least they don’t mention it. I do, however like your idea of having the bmo/sobey’s account for the ability to see a teller if I need to.
I’ve been with PC as my main bank since I moved to Canada and have never paid a penny in bank fees. If I have to do something out of the ordinary of course there will be a fee like a money order. Otherwise all cheques, ATM, etc have been free. So far so good.
Awesome! I’ve heard nothing but good about PC, so I’m thinking this is the route for me. Thanks for your input!
I’ve just returned to this post and its accompanying comments because I’ve hit an inconvenient snag with the Bank I’ve been with pretty much my whole banking life. I find the comments and tips useful and have been perusing them in the hopes of taking some of this advice and applying it to my situation.
Which is: I was recently having a conversation with the online banking person at BMO to request the removal of one of the telephone banking accounts. Not only did we do that, we added a new account that I’d recently set up. The young woman then took it upon herself to mention that I could be saving money on the monthly fee for my accounts by changing to another account. She told me that for 30 transactions a month I could be paying $9.95; I could also opt to go online for statements for my chequing account and thereby reduce the $2 fee for them to mail me paper statements. I enquired and double checked that I could still do all the banking that I do, via telephone or in person or at an ABM or whatever, for this $9.95 per month and if there was anything else involved that I should be aware of. She said no.
Today I found a $6 fee for excess transactions. Nearly blew my top. Called them up and had another conversation with a different rep. Explained what had happened and that to my knowledge the young woman I’d spoken with before didn’t trouble herself to disclose that I’d be charged an extra $1 for every transaction I did over the 30 per month on my new plan. I said I was angry that my effort to save a little money on banking fees had not been as expected. I asked him what could be done about this, was there another plan that I could use where this nickle and dining and dollaring didn’t happen.
He reviewed the transactions that had occurred for the past two months and I told him those were all regular, normal banking transactions that I’ve been conducting for some time. I asked why this young woman would mention another plan that would save me in banking fees, tell me and lead me to believe that I was well within the 30 transactions per month, and fail to disclose the extra fees I’d incur if I went over the 30?
Hear me now: I have been conducting the same set of transactions on a regular basis for YEARS, with the odd extra here or there, to the point where I really wasn’t counting ‘cos everything was working well. The few regular debits and transfers I had set up where working on time. My withdrawals were working fine. My deposits were working fine. Even the odd cheque that I write …. all working fine and very conveniently and with very little hassle for me. I even access my accounts on line quite often to make sure things are working well….that’s how I know, rather quickly, when something’s not right. Like todays extra $6 gift from BMO!!! Therefore, yes, consumer beware.
BUT, as I told the young man I was speaking with, why would the young woman I spoke with not trouble herself to disclose the extra fees in the event that I went over the allotted number of transactions?
The fellow said for this occasion they could reverse those extra fees and then I asked what else could be done because clearly this plan was NOT suitable or acceptable for my purposes. He put me on hold to have a conversation with his manager.
When he returned, it was to let me know that they’re going to listen to the recorded conversation I had with the young woman for coaching purposes so I said that’s good anf fine. He also said they’re going to message my home branch to see if my accounts can be put back into the old plan. I said all right, and asked for a reminder of what that meant. It meant 60 transactions for $12. I said all right, and then stated that the young woman had also told me something about that old style account being grandfathered.
Then the fellow told me something that got me livid. He said the only thing I wouldn’t be able to do if the accounts can be put back to the $12 version was to do any transactions in the bank with a teller. He told me that, except for making a deposit, it would cost me an extra $1.!!!! I took the opportunity to point out to him that if they had NOT reversed the $6, then the fees for the month with the new plan actually cost me more than the old plan….$15.95, to be precise!!! Meanwhile the whole point of having the discussion on saving by reducing fees by changing to a different plan was to do what????!!!
Ok, so now I’ve told him they need to pay attention because I’ve been banking with BMO all my banking life and now I’m going to look elsewhere, because the bank is clearly too interested in gouging its customers when in fact it makes more than enough money and it shouldn’t be gouging people with a dollar here, there and everywhere every time they turn around to function in their regular daily lives. I was aware that at some point he stopped listening (probably when I said I find it unacceptable that I cannot go and do a banking transaction in person without being charged $1 for it, that’s not right). I know this because I asked him if they didn’t have any other plans (eg/ 30 transactions for 9.95 or 60 for 12….what happened to a plan for 45 or 50 transactions…oh yeah, I forgot, silly me. That would be far too inconvenient a service for the bank to offer!!!).
And now I’m going to read Sara’s post and everyone’s comments and start my own research. Because I’m not putting up with being gouged via non-disclosure, especially when I asked the questions in the first place.
So glad this site/these posts are out there!