What is the definition of a “good” bank? One that doesn’t charge extra fees, according to Canadian consumers. A recent study released by Leger Marketing for PC Financial reveals 71% of survey takers are fed up with hidden bank fees, saying they’re the biggest lender turnoff.
Another 42% take issue with “surprise costs”, and no wonder - being charged to access your money adds insult to injury. If you’ve ever wondered why your chequing balance is lower than it should be, only to find a random “excess Interac” or “performance fee” on your usage statement, you can attest to the frustration.
While Canadians are known for being loyal and hesitant to switch from their home banks, the quest for fee-free banking is prompting a reversal of this behaviour - 83% of consumers are heading online to seek out more affordable options. If you’re on the hunt for a new chequing account, be sure to check off the following:
Is there a minimum balance? While most chequing accounts won’t require you to maintain a minimum balance, doing so may waive some fees and entitle the account holder to further perks. For example, The BMO Performance Plan chequing account lifts its $13.95 monthly fee when a minimum $3,000 balance is maintained in the account.
Is there a monthly fee? This is the big clincher; some accounts will charge monthly fees, especially if they offer further perks, such as reward earnings, or unlimited transactions. If these features are attractive to you, ensure any fees don’t wipe out the value you’d be earning.
Does it earn interest? Some chequing accounts will put your money to work and earn additional value. The ING THRiVE is a great example, earning 0.25% on your total balance, compounded daily.
Will you pay for transfers? Moving money around various accounts under the same lender is often free, but you could be charged for transferring money in or out to a different lender. You may also pay for Interac e-transfers, though some products include up to a limited amount for free.
What are the ATM and Interac charges? This one’s a big wallet drain - not only will you be charged by the different lender for withdrawing funds from their ATM, but your own lender will charge you as well. There’s also cause for caution if you’re in the habit of paying with debit, as this isn’t always an unlimited service. Some accounts may include a limited number of free transactions, and then charge for each additional debit purchase.
The Leger study also found that 31% of customers would make the switch to a new lender if it meant better rewards, a fact that some lenders are banking on to win new clients. Following a small dip in Q3 profits from $7.8 billion to $7.63 billion, a luxury banking trend is starting to emerge in Canada. This includes better branch accessibility, flexible meeting hours for financial advisors, and yes, dropping fees. One B.C. lender is even going as far as offering a spa-like environment for customers, likening their banking visits to “checkups”.
What would it take for you to switch lenders for your chequing account? Would lower fees seal the deal?