Saturday, February 23, 2013

Free Banking - Extended Trial Run

I was very skeptical when free banking first appeared in Canada, but having gotten badly burned by bad financial advice I received at BMO (a bank I've been with since I was 16) I felt particularly opposed to paying about $120 annually in fees when it didn't really seem to make much of a difference. Having finally reached a point where dissatisfaction outweighed the inconvenience of the seemingly arduous process ahead to switch banks, I finally signed up for President's Choice Financial. 

For starters, the process itself was unexpectedly painless. In less than 2 weeks' time, I had transferred my payroll deposits and any pre-authorized payments to my new account. Every single step was quick and painless and made me wonder why in the world I had waited this long. I left my RRSPs and a line of credit at BMO since those services were free but more complicated to transfer, but I closed my checking account with them (not that they've noticed) and opened one with PC Financial instead (as well as a savings account, a line of credit, and a PC MasterCard) - all set up before stocking up on groceries at the same place.

Now, to sweeten the deal, not only am no longer paying any banking fees, but I am also collecting points that translate to free groceries. In almost a year since I've signed up, I have redeemed about $150 in free groceries - no strings attached. For those who like the idea of an actual bank teller in case you need last-minute cashier's cheques or other non-standard transactions, I can only say that I had the same reservations and hence held off on switching for so long. However, how often do you actually use those services? Is it worth paying $120+ in fees a year just to get one certified cheque quickly? My recommendation is keeping some business (that doesn't involve bank fees) with your traditional bank so you still have access to these service on a per-transaction fee basis, but moving your daily banking to an institution that doesn't charge baking fees.

I do most of my banking online anyway, so I haven't noticed any difference in how I do my banking since switching to a supposedly inferior banking institution. My money is still just as secure as with any of the main banks (in fact, PC Financial is a subsidiary of CIBC and fully covered by the CDIC Deposit Insurance). In addition, I already shop at Loblaws, so I can easily withdraw any cash I need or make deposits on my regular grocery run without having to make a separate visit to the bank. And any of those extra services you're worried about (such as certified cheques) - they are still accessible and there is a bank representative on site that you can talk to. You just might need to plan a little further ahead.

WHAT: Free banking

WHERE: PC Financial

WHEN: Any time you like

COST: Free

INSIDER TIPS: See if any of your friends have existing PC Financial accounts. I often get emails from them with promotional codes I can share with my friends - if they sign up, both of us get extra PC points, often worth $20-$30 in free groceries. I am happy to share mine if you don't know anyone.

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