The Frugal Canadian

A frugal spender seeks to find new ways to save money and increase her net worth.

Wednesday, October 19, 2005

Lower Banking Fees

I’ve been a long standing customer at TD Canada Trust. I was tired of the standard $3.95 service charge for not maintaining a balance of $1,000. While $1,000 isn’t much to maintain, I find the concept itself absurd and knowing that I had an alternative at PC financial I decided to close my TD chequing account.

I set up a President’s Choice Financial bank account approximately 1 year ago. It took a while to set up but I am finally content to use it as my primary account. It has no service fees on the chequing account and the interest first savings account offers a 2.15% interest rate on my average daily balance.

- Ease of transfers to external financial institutions and brokerage account
- Essentially no fee banking
- Decent savings rate on emergency funds

- Initial hold on deposit totals. I only have a cell phone(no land line) and the bank had difficulty performing a credit check on me. They initially held any deposits on my account for 5 business days before allowing me to withdraw any funds. They have since withdrawn the hold.
- Foreign Currency Difficulties – While the bank card can be used at ABMs in the US, you cannot obtain foreign currency on your account from a teller since no branches exist.
- Waiting time for bankdrafts etc – Obtaining a certified cheque or bank draft can be ordered online or via telephone, but takes approximately 1 week to be delivered via mail. I haven’t had to use this option but it would be a nice to have.

During the transition period, I maintained my TD account just in case the PC Financial didn’t work out. It’s been a year now and I was ready to close the TD account. I went to the branch to close my account and told the banker I wanted to close my account and switch to a savings account. The marginal balance I would maintain in the savings account, would provide some convenience if I did need foreign currency or a certified cheque. Since it is easy to transfer funds from one bank to another, it was a simple solution to maintaining my lower fees.

The banking rep immediately asked why I wanted to close my account. I replied with two words: "service fees." He asked if that was the sole reason and I nodded yes. He shut the door and said, "here’s what I can do for you."
He offered me a full serve account, unlimited transactions and free cheques, no minimum balance for 1 year at NO COST. When I complained that it was only good for one year he told me to come back in a year and he’d give me the same deal.

Then he offered me a savings account. I didn’t really need it since I was already set up at PC Financial. I told him this and he offered me a savings account with no minimum balance earning 2.1%. It normally requires a $5,000 balance to earn interest but he also waived that. I signed up since it cost me nothing.

So I’m staying with TD. I don’t plan to switch back entirely to TD as I am pretty content with PC Financial. It will be nice to have the comfort of knowing I have easy access to foreign currency and some face to face customer service should I need it. Even better, I’ll save $47 a year in service charges.


At 4:43 PM, Anonymous Jane Dough said...

Excellent - there is something to be said for being able to walk into a branch and touch your money if you need to. Glad it worked out for you.


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