Although some people have decided to use digital banks only, the majority of Canadians still use brick and mortar banks. There’s nothing wrong with that, but the question is are you getting the most out of your banks?
Traditional banks offer a variety of products services but it seems like many people are using them just to deposit and withdraw their money. Some people may not believe they need all of these “extras,” but quite often they’re included with the fees you pay so why not take advantage of them? Here’s how to most out of your banks.
Get your banking for free
Everyone hates paying fees, I get that, but did you know you can usually get your account fees waived? Most banks offer no-fee account for students and seniors, but it’s up to you to ask for them. Alternatively, almost every bank will waive the monthly chequing account fees as long as you keep a minimum balance within your account.
Many people hate the idea of keeping $3,000 – $5,000 in their account just to get their account fees waived, but premium accounts will usually give you additional products and services free such as a credit card, safety deposit box, cheques, and more. Even if none of those things are of any use to you, think of the minimum balance requirement as your emergency fund. Sure, that money won’t be making any interest, but as a result of keeping it in that account, you won’t have to pay any monthly fees which could save you $15 – $30 a month easily.
Obviously, you’d have to pay monthly fees if you had to dip into your emergency fund, but you could always change to a lower fee account at that time if your cash-flow is tight.
Use your bank’s services
Some people insist that they’ll never need the services their bank offers, but you’d be surprised what comes up. For example, my condo requires a deposit by certified cheque whenever I rent out the party room or moving elevator. Why a certified cheque instead of a regular cheque? Well, I guess some people in my building were writing cheques that bounced.
Even if they accepted normal cheques, where would I get one of those? The bank obviously. Digital banks are great, but no all of them are able to issue physical cheques.
Although I don’t use my safety deposit box that often, I’m sort of happy I have one since I can store my valuables such as family heirlooms that have been passed down.
As weird as it sounds, I also like having access to bank representatives. Well, more like I don’t have a choice for some things. My daughter’s RESP is set up with TD’s e-series funds, so it wasn’t possible for me to open an account without going into the branch. The people that work at banks and the services they provide are more important than you might think.
Product switch your credit cards
This applies to most credit card providers, but did you know that you can often product switch your credit cards without it affecting your credit score? Let’s say you currently have a credit card that you’re not happy with and you want to get a new one. Instead of cancelling your old card and applying for a new one, you would simply call your bank or credit card provider and have them switch you to a different card.
By doing a product switch, there’s no hit to your credit score, and the credit history you obtained with the previous card stays intact. This of course only works if you’re switching to a different credit card from the same provider.
Keep in mind that product switches can also be used to your advantage. Let’s say you’re currently with Scotiabank and you have the Scotiabank Momentum Visa Infinite card and you notice the Scotiabank Passport Visa Infinite card has a promotion with a good sign up bonus. Well, you could switch card to take advantage of that promo.
Be sure to use or transfer any existing points before you make a product switch as you would likely lose them if you don’t. Also note that not all promotions are available when doing product switches so call your credit card provider to find out that you still qualify before switching.
Use a digital bank
This article may have sounded like I’m saying traditional banks are the way to go, but I honestly think everyone should be using a digital bank too. Why have both? Well, because digital banks actually pay you a decent interest on your deposited money.
Both EQ Bank and Alterna consistently offer some of the highest interest rates in Canada. Tangerine is still quite competitive, but they’ve been focusing on promos more than anything else as of late. motusbank just started accepting applicants too and are worth checking out.
With digital banks, you can link your account right to your regular bank account so it’s easy to move money between the two and most of them offer free e-transfers which is incredibly convenient.
Regular banks aren’t going anywhere so there’s no reason to hate on them. They still serve a purpose for the majority of Canadians while digital banks are meant to complement them so why not use both?