Back around the turn of the century (when we switched from the 1900s to 2000s, that is), I landed the one-and-only full-time job I’ve had in my career, as a junior editor with Cottage Life magazine. The new job meant lots of changes for me, including a steady paycheque, my first apartment, and the bills that come with being a renter. So money management was always top of mind. When a colleague mentioned the amount of money that she was saving with a no-fee bank account, I quickly jumped on the bandwagon.
Goodbye TD, Hello PC
My mother had worked for much her life as a teller for TD Bank so, growing up, I always did my banking there. I still recall as a kid gleefully adding up all the “free” money I earned in interest on my limited balance. But, as I got older, I was continually frustrated by how the various fees would more than wipe out the piddly amount of interest my savings earned.
Savings In The Thousands
So when I first looked into President’s Choice Financial it seemed too good to be true. (PC Financial is a collaboration between CIBC and the Loblaw chain of grocery stores.) There were no monthly fees for chequing or savings accounts, I was allowed an unlimited number of ATM withdrawals from CIBC machines or the kiosks inside Loblaw stores, all Interac transactions were free, and I could even order the chequebooks for free. More than a decade later, all those perks still remain in place. If I conservatively estimate that I’ve saved $10 in fees every month I’ve been using PC Financial, that’s about $2,000 that I would have otherwise wasted on bank fees.
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The Downsides to Switching
No-fee accounts are great for everyday banking: depositing cheques, withdrawing cash, and paying for things with Interac. But there are limitations on what other types of banking you can do, and hefty fees for non-traditional privileges.
For one, PC Financial doesn’t have any banks or tellers. So common counter services, such as purchasing foreign currency, are harder or impossible to do.
And while you can typically use a no-fee debit card outside of Canada, the fees for doing so can be much higher than with a “regular” bank account. In addition to the non-branch ATM fees and foreign funds conversion rate, PC Financial charges a 2.5 per cent administrative fee on the amount withdrawn. In other words, it could cost you about $10 CDN every time you withdraw $100 on holiday.
Have you ever switched bank accounts? Tell us why!