When it comes to setting up your own bank account, some may feel more comfortable with the familiar. Maybe your parents set up a youth account for you with their bank and you haven’t branched out yet (no pun intended). Or, perhaps, you’re wary of financial security outside of the big five banks.
However, as older millennials reach their mid-30’s and start their own families, there’s a need to change things up a bit. Millennials generally face more debt than ever before, with many juggling multiple jobs, and spending most of their waking hours online. Typically, two of their biggest needs are saving time AND money, but one of the most overlooked ways to save more cash is through comparing bank accounts.
Even with today’s relatively low interest rates, you can still find accounts that will not only save you money, but give you more than you had to begin with. Here are the top seven ways to find a bank account that works for you:
1. Look for a chequing account that pays you, not vice versa
One of the easiest ways to make money on a chequing account is to look for introductory sign-up offers.
Also, most chequing accounts do not pay any interest, but they do exist. Outside of the five big banks (Scotiabank, CIBC, TD Canada Trust, BMO and RBC), you’ll likely find other financial institutions offering these types of accounts.
Currently, you can earn up to 0.1 per cent interest by signing up for a PC Financial No Fee Bank Account. You can also earn PC points on your purchases, translating into free groceries.
Or, Tangerine is offering new clients 0.15 per cent interest and up to $125 bonus cash for opening a chequing account by August 31, 2017. In this case, you need to make a minimum initial deposit of $100 and forward payroll deposits to the account for three months in order to get the $125 bonus. Neither one of these accounts charge a monthly fee though, meaning you basically get free money just for signing up.
On the other hand, for $15.95 per month, the Scotiabank Momentum Chequing Account offers $100 when you open an account online, and one per cent cashback on all debit purchases, up to $300 in the first year.
While a monthly fee may sound unappealing, you can still make money on top of the $100 bonus with this type of account. The $300 annual cap on cashback minus the monthly fee (totaling $191.40 annually) comes up to $108.60 in your pocket.
Reaching the $300 cap, of course, would require spending $30,000 in one year. But according to Statistics Canada, the average Canadian spends $37,899 on shelter, transportation and food expenses annually, easily bringing you to the $300 cap.
2. Look for a high–interest savings account
Smaller or online-based banks are more likely to have higher interest rates because they have lower operating costs, which enables them to pass on savings to the consumer. While it currently has no brick-and-mortar locations, EQ Bank offers one of the highest interest rates on a savings account in the entire country – coming in at 2.3 per cent. Some other great choices include Oaken Financial or Alterna Bank.
3. Look for free e–transfers
From paying rent to cell phone bills, Canadians are doing more and more of their banking online these days, and we really don’t want to pay for that convenience. For this reason, customers should look for accounts that offer free e-transfers, or at least a certain number of free e-transfers per month. This can save you a lot of time and money in the long run, leaving more of it in your account!
4. Minimize the fees
Avoid accounts that charge unnecessary fees or require you to have a minimum balance. For example, TD charges customers five dollars for cancelling an e-transfer. That’s not something that you want to be on the hook for. Once again, you’ll most likely come across no-fee banking with some of the smaller or online-based institutions.
5. Don’t put all your eggs in one basket
Sometimes companies will offer incentives that look equally great and you simply can’t choose between them. The good thing is, you don’t have to be loyal to just one bank. For example, if CIBC is offering you a no-fee chequing account and Scotiabank has a solid interest rate on a savings account, there’s nothing wrong with putting money into both. You can also bank with one of the big five and a second institution, like EQ Bank or PC Financial. This way, you can save and earn money at the same time.
6. Time is money
If you ever had to call your bank or visit a physical location for any reason, you know that wait times can be long and the service might not be all that great. Or maybe customer service representatives are only available between the oh-so-convenient hours of 8 a.m. and 4 p.m. Long waits are a waste of everyone’s time and might even cost you if you’re calling from your smartphone. Look for a bank that is known for good customer service. Check out sites like Better Business Bureau, and read the fine print when checking out a bank’s website. You may also want to choose one that has live agents answering phones 24/7, especially if you’re a night owl and do most of your online banking at midnight.
7. Shop around
A rate comparison website like us here at RateSupermarket.ca can help you find all different types of bank accounts all in one place – without checking multiple websites. You can compare a number of products at once to simplify your decision, cut down on time spent researching, and find something that best fits you and your lifestyle.
Never get too complacent with one bank, as you never know what you could be missing out on somewhere else. Keep your options open, shop around and don’t be afraid to switch to get a better deal.
This post has been updated.