I used to hate banks. You put your hard earned money into a chequing account at a bank and they pay you next to nothing. If you want to take your OWN money out, they’ll charge you a fee for using your debit card, when you withdraw money at an ATM, or if you write a cheque. Even if you do absolutely NOTHING, they will still charge you the monthly fee for holding your money for you. In turn, they take your money, and lend it to someone else and charge them a great interest rate. I hated them, but boy, I wish I could be them! And the service! Don’t get me started on the service; I seldom go to the bank for anything these days. I seriously considered investing in a safe and just holding my cash at home.
Along came PC Financial. It was like a dream come true. Free. Everything. Could anything be more glorious? Sign up at your friendly local superstore, and you can get set up with a chequing account and savings account. They’ll start you off with a 100 free cheques, and you can order more if you run out. I prefer banking online, so I am able to see my bank accounts online whenever I want, and transfer money effortlessly between my accounts. And the interest rate on their Interest Plus savings account is one of the highest in the market right now at 1.50% (I regularly check this to ensure my money is doing the best it can do). You can use your debit card as much as you want, for FREE of course, and as long as you withdraw cash from a CIBC ATM, this is also FREE.
Sounds too good to be true? There’s got to be a catch, right? As it is an online-based bank, they don’t actually have branches for you to go line up in. Some may feel more comfortable with a “real” bank, which I do have as well, but only as a way to fund my investment accounts. No monthly fee, and no additional charges are required if I deposit only once a month. Everything else, I use my PC.
A lot of people will ask “it’s only a couple bucks a month, what’s the big deal?” Everything adds up, whether you realize it or not. How often do you go through your bank statements to make sure everything adds up? To see the amount of bank charges you incur each month? This might be an interesting exercise for you to do (now that you have all your bank statements all organized and easily accessible!) How much are you paying in bank fees? According to PC’s website, you can save up to $200 a year. Is there ANYTHING else you would rather spend this money on? I don’t advocate spending NO money at all; I just like spending money on things I actually WANT to spend money on.
Let’s say we have $10K stashed away for our emergency fund. Some may choose to keep this in a chequing account to maintain a minimum balance so that their monthly fees will be waived. Let’s assume this money is untouched for a whole year. At the end of the year, if you had the money in a chequing account, you will have around $10K (assuming they don’t charge you money for not having any activity during the year) as most chequing accounts don’t earn interest. My money would sit in PC Financial’s Interest Plus Savings account, and I would have an extra $150 in my balance.
But wait! You’re comparing chequing accounts to savings accounts; that’s not fair! Yes, but if you don’t keep the minimum balance in your chequing account, you may end up paying up to $200 a year in fees which would barely be offset by the dismal interest rates you will receive in the main bank’s normal savings accounts.
Check out their website for more information: http://www.banking.pcfinancial.ca/a/products/chequingAccount.page?region=AB&language=en&signinop=
The handy link also allows you to sign up for their accounts as well.
So how much are you paying in monthly banking fees? How much money are you losing each month by not allocating it properly?