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I thoroughly believe that you don’t need to be paying monthly bank fees. In an effort to save more money, I’m always looking to reduce or remove recurring expenses. Banking fees are one of these recurring expenses that can be avoided entirely. There are now a variety of options available to everyone. It’s just a matter of picking the best option for you. Today I’ll go over 5 options:
- Negotiate with your existing bank
- ING Direct
- PC Financial
- Credit Unions
- Specialty accounts (Youth, students & seniors)
Negotiate with your existing bank
If you have a history or a good relationship with someone at your bank, then try asking them for a no-fee account option. Having a good relationship with someone at a bank can be a valuable resource if you think you will need loans, mortgages, and other financial services in the future. If you have a good relationship, don’t just switch right away. Try asking you’re bank to waive the fees. I’d say something like:
“I’ve been reviewing my finances and I’m hoping to remove my bank fees. I’ve looked around at the options and I’ve noticed that I can get a no-fee chequing accounts from my local credit union, ING Direct, PC Financial and some others. I’ve had a good experience with your bank and I’m hoping we can continue our relationship, but I’d like a no-fee account. Is there anything you can do to help?”
When asking them to waive the fees it’s a good idea to talk to a branch manager, or someone who has the authority to remove the fees. Stay friendly and be patient. If you have other services (mortgage, investments, insurance, broker account, credit cards, etc) make sure to mention them so that the manager knows that he’ll be keeping a valuable customer happy. If you’ve been with the bank for a long time, make a point of mentioning this as banks love loyal customers.
If after asking the bank is still unwilling to waive the bank fees, consider switching to a different institution.
ING Direct
My favourite no fee chequing account is ING Direct’s Thrive Chequing account. I use this account as my regular everyday account for a number of reasons.
- There are no monthly fees, period.
- The account pays out a small amount of interest (0.25% on balances less than $50,000 as of June 7, 2013) on your balance, which is uncommon for a chequing account.
- Free Whoops Protection. If the balance of your account goes below zero, but not past negative $250.00 then you will not be charged a NSF (Not Sufficient Funds) fee. Instead you will be given a 30 day grace period to get your balance back above $0.
- Free email money transfers. Free to send them, and they will be free in most cases to deposit on the receiver’s side. I use email money transfers to transfer money to and from family and friends on a fairly regular basis. I prefer this over cheques, because it can be done online and it’s easy to send money to family in another city. I also use email money transfers to buy DRIP starter shares. Not everyone uses email money transfers, but I find them way more useful than cheques, especially if you have family and friends spread across Canada. Transferring money to others who don’t use the same bank can be annoying if you don’t have email money transfers. Email money transfers let you transfer money to other people with ease. Simply send the money to their email address and get them to answer a security question of your own making.
The one disadvantage of this account is that it doesn’t offer free cheques. Your first cheque booklet of 50 cheques are free, but after that you have to order them online for $12.50 a booklet. I don’t use cheques very often, so this has not impacted me. Plus I also have a PC Financial bank account which offers free cheques. If you use a lot of cheques then PC Financial may be a better choice for you as they offer free cheques.
You can use my referral code 17002298S1 to get an additional $25 when you open any ING Direct account with an initial deposit of $100 or more.
PC Financial
PC Financial offers a no-fee chequing account. This is also a good product, but I prefer ING Direct’s account. If you need a lot of cheques then this may be the account for you. PC Financial has a no-fee chequing account, and also offers free cheques. Unlike ING Direct it doesn’t have free email money transfers, doesn’t offer Whoops protection, and doesn’t offer as high of interest on chequing account balances. Everyone has different needs, so while I personally prefer ING Direct it still might be a decent choice for you. With this account you can earn PC reward points with certain transactions, which is an added bonus that ING Direct doesn’t offer. While I prefer ING Direct, that didn’t prevent me from opening a PC Financial account as well. In the past I needed a lot of cheques to buy additional shares in my DRIPs, which is why I opened up an account. I still have the account because it is free, but I don’t use it very often. It’s nice having access to free cheques and they are simple to order. All I have to do is login online, order them, and then they are delivered by mail.
PC Financial doesn’t have any signup bonuses that I know of, but they are currently (June 7, 2013) offering bonus interest on new account deposits. They are offering 2.6% interest on new deposits into their savings account until July 15, 2013. Details here.
Credit Unions
Some people like to have a bank that has a nearby building they can walk into with a person to talk to. If this is the case and you don’t live in a major city then ING Direct and PC Financial may not be for you, as they don’t have a lot of branches. Instead of one of the big banks, try using a local credit union instead. I find that with a little research you can find a credit union that offers some sort of free chequing account. Each province is different, so you’ll have to see what’s available in your province. I live in British Columbia and I was able to find an unlimited transaction free chequing account with Coast Capital Savings Credit Union.
Specialty Accounts
If you are under 18, over 60-65, or a full time student then odds are you will be able to find a free chequing account. Most banks will offer some sort of free account or significant discount. If you are in these age groups and your bank doesn’t offer you a free account, try negotiating for it. They will have a harder time saying no, because the competition likely offers a free account.
Other
There are some accounts that will waive fees if a certain minimum monthly balance is maintained. I don’t consider this a free option, because you have to tie up money in a low interest environment when you could be earning a better savings rate in a high interest savings account or investing the money, etc.
Good Comparison Websites:
- Rate Supermarket has good comparisons of saving accounts, chequing accounts and GICs. The comparison of chequing accounts doesn’t seem to include credit unions however. Rate Supermarket also compares a lot of other information like insurance, mortgages, credit cards, etc.
- No Fee Banking also has a good page where it summarizes some no fee options.
- Red Flag Deals has a good comparison of saving accounts in Canada.
Conclusion
The big six banks in Canada have a “not quite monopoly” on financial services which at times can make it difficult to find a free chequing account. Hopefully with this article and the resources I’ve linked to you won’t have to pay bank fees anymore.
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Does ING Direct charge fees when using another bank’s ATM? I live in Ontario and barely ever use cash, but when I do need it I can withdraw my money from a CIBC or a President’s Choice ATM without be charged fees. (I have a chequing account at PC)
I only ask as I don’t recall ever seeing an ING ATM?
Darren.
There aren’t a lot of ATMs with an ING Direct logo out there, but you can withdraw from any ATM on the EXCHANGE NETWORK for free. This gives you access to whole bunch of ATMs. I had a look and in Ontario there are a whole bunch of Credit Unions on this network along with HSBC and National Bank, so you could use any of these. They have an ATM locator on their website that is pretty useful. I have the ING Direct app on my phone which also has the locator. I use this if I need to find a close-by ATM.
Do you happen to know if there is a fee when depositing money from Coast Capital Chequing Account into ING? I have the free Coast Capital chequing account and an ING savings account. I used the ‘move my money’ option to transfer money from Coast Capital into ING.
There is no fee.
In order to choose an account that suits your needs it is a good idea to assess which account features you use and how often you to use them. You can find this information in your current passbook or account statement.
Good article, thanks. Another options is Canadian Direct Financial, an on-line service of Canadian Western Bank.