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.