Switching banks can be a pain – but in my experience, it’s often worth the effort. In fact, I’ve had the pleasure of changing financial institutions a few times over my lifetime. Most recently, I moved my Tax-Free Savings Account (TFSA) and my home insurance to new lenders.
There were a few reasons why I decided to jump ship – here’s what I learned from the experience.
Not Taking Low-Earning Interest for an Answer
Originally, I housed my TFSA with Ally Bank – and I was a big fan. They offered competitive rates for savings accounts and TFSAs (one of the highest in Canada at 1.8 per cent), had great customer service and their TV commercials were hilarious. When I heard RBC had acquired Ally Bank my response was lukewarm; I was afraid RBC would change Ally Bank – and my worries were well founded, as they went a step further and shut it down entirely!
As a bank account holder I was given the choice of transferring my money to RBC’s low-interest savings account (offering 1.2 per cent), or take my cash and run. Not thrilled with having to take an earnings cut, I chose the latter option.
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Picking a New Lender
I’m not a big fan of the big banks, as they’re notorious for their service charges and poor customer service, so I decided to open up a TFSA with Canadian Direct Financial (CDF).
Signing up with CDF did require some legwork. They requested I write a cheque to myself in the amount I wanted to transfer – but I was moving money from my TFSA and not my chequing account. To make a direct transfer to my new TFSA, I had to print off a TFSA transfer form and send the request to Ally. It took about a month for the funds to be transferred over to my new account at CDF, but it was worth the wait. They have great customer service and offer among the highest savings rates out there. I’m glad I made the switch – I will gladly keep my savings with them for the years to come.
Home Insurance: My Fight Against Rising Rates
I was a satisfied customer of TD Insurance Meloche Monnex for a number of years. Signing up was easy – I didn’t have to answer a million questions like most insurance providers (they usually ask every question under the sun – I’ve been asked the square footage of my front porch to whether my kitchen counters are marble or granite).
TD’s statements were pretty straightforward and I felt they had excellent customer service. However, when TD increased my home insurance by 25 per cent ($15) for the second straight year, I decided to shop around. While they did attempt to retain my business by offering me an additional discretionary discount of 10 per cent, the rates were still lower at Square One Insurance – so I went through with the switch.
I’m glad I did because I ended up saving $28 per month ($350 annually) – not bad for an hour of work!
Have you recently switched banks to avoid rising interest or annual fees? Let us know!