Finding the right Bank for you in Toronto — Banking FAQ — Sharkhacks guide to selecting your bank(s)
Let’s face it. I hate most banks here and bankers. Banks charge you money to keep your money!!
Here is a funny rant from my favourite comedian Louis CK on the topic
I have been in Canada for many years now and I have dealt with almost all banks. I have yet to find the perfect bank but i think I nailed down the perfect combination of banks.
The Big Five — Canada’s largest
This is one of Canada’s largest and my favourite bank even though they charge me chequing fees. Damn you RBC!!
The good thing about RBC is that they have newcomer / welcome to Canada package which includes chequing accounts, saving accounts, good credit cards (consult sharkhacks guide to credit cards). If you are also serious about saving and investing (consult sharkhacks guide to investing) and if you buy your own investing products RBC Direct investing is pretty good.
Like most banks RBC waive their fees if you maintain a large balance ( CAD$ 2000–5000) in your chequing account. This idea sounds stupid to me. I don’t like to keep this much money in my chequing as I’d rather have it accumulate interest for me than give it to them.
RBC also have a decent online service and mobile app. They are also present everywhere. Lots of Branches and ATMs around the GTA. They have ATM machines in Shoppers Drug Mart and most Esso gas stations. (consult Sharkhacks guide to Gas).
Another cool thing which they recently launched is the ability to Scan and Deposit a cheque from the comfort of your own home using their mobile app. I LOVE IT. You no longer need to go to the bank or ATM to deposit a cheque !!
In my head TD is the second biggest bank. My wife had an account there. They distinguish themselves by having extended branch hours and are open on weekends. If you need to do a lot of in person banking (I don’t) this bank is great.
Their Investment accounts and offerings are also good especially the TD e-series mutual funds which have really low MERs (see Sharkhacks investing guide).
I’m not sure why I don’t like TD, maybe it is their green logo, or maybe something else, but for some reason we never clicked.. They never gave me a reason to switch.
Bank of Nova Scotia : Scotiabank + Tangerine
To be honest I don’t know much about Scotiabank. I have never been their client. They are just like the other banks, but I think smaller than TD and RBC. I also don’t know anyone who banks with them.
Not so long ago Tangerine was a separate small bank called ING Direct. They were amazing and they were killing it! So much that Bank of Nova Scotia acquired them. I love these guys. They are mostly an online bank that does NOT charge chequing or saving fees. Not only that but they pay you interest on your chequing… SWEET. They have good chequing, saving and investing products (again consult sharkhacks guide to investing). Only drawback is that they have no Credit Card offering. When they were ‘ING Direct’ they didn’t have a lot of ATMs like the larger banks but now since they are held by the same parent bank you can actually use any Scotiabank ATM to withdraw from your Tangerine account for free!
I highly encourage newcomers to mostly try Tangering for their chequing, saving, and investing products, and try RBC for their secure credit card. I think this combination is a winner.
The reason I have not made the switch myself is that I use RBC Direct investing. My investments are setup in a way that it will be pain in the ass to try to move them, plus I work mostly with ETFs instead of Mutual funds. This is advanced stuff that you don’t have to worry about for now (and I cover it in Sharkhacks guide to investing).
Besides the picture above and their logo I honestly don’t know much about BMO. None of the people I know use them. I looked at their website for this post I didn’t see anything that catches the eye. Chequing with fees per usual, saving, investing yada yada… You can use them or try them if you like. If you have tried them let me know what you think in the comment section. And hey I just remembered I had a friend who used to be with BMO then he moved! NOT a good sign.
I don’t know much about CIBC as a bank either in terms of their offerings for newcomers. From their website they seem to have a cheap (3 dollar) chequing account option but you only get 12 transactions / month!! I wonder besides drug dealers who else does only 12 transactions per month!!
I have a credit card with CIBC which I use specifically for Gas savings (consult my savings on Gas guide) and since this gives me access to their online service I can tell you their online is decent (maybe a bit too cumbersome). A nice feature on the CIBC credit card offering is that they provide credit monitoring. If someone accesses my credit file (more on this in the Sharkhacks Credit Guide) I get an alert from CIBC that tells me who accessed it and when. This is a really good feature, which i think is cool.
PC Financial is similar to Tangerine in terms of their offerings. Free Chequing, Good saving options and investment options. I honestly have not spent a lot of time looking at their offerings as much as I did with Tangerine so until this changes I advise you to go with Tangerine or do the homework yourself.
How to pick a bank — The SharkHacks FAQ
Location Location Location !
If you anticipate that you will be doing lots of in person banking were you need to go to the bank often then it is important to pick a bank with a branch close to you. Close to were you live or work.
A good example is if you are sending money outside of the country frequently and / or in large sums. (ex: sending money to your family who live outside of Canada). Sending money to some of the ‘less lucky’ countries and in large sums requires you to go to the bank to do this in person. You cannot do this online as far as I can tell from my own experience.
Another good example is if you want to have a secure deposit box (to put your valuables such as gold, etc..) which you do NOT want to keep at home. Then you don’t want to drive for 30 minutes when you want to grab something from the bank.
Availability of ATMs
Pretty self explanatory; the more ATMs a bank has in various locations the better it is. It also depends on how much cash you handle/use/need on daily/weekly basis. If you like to use a lot of cash (which I recommend against, for various reasons, some of which I will explain in a later guide) and if you want to get cash at different locations then you want a bank which has a wide array of ATMs and / or branches.
All banks have many chequing and saving account types, each has its own features and fees. Some are more expensive, some less. Some will give you unlimited transactions, some not. So you need to understand what are the different account types and what it means to you BEFORE you get the account.
Where do I begin with fees! This is where banks screw you. Here are some of the common fees that you will be charged by most of the banks.
Most banks have this stupid model where they charge you per transaction unless you have an ‘unlimited transactions’ type of account . So what counts as a transaction ? For most banks a transaction includes deposits and withdrawals to/from your account. Some have other definitions and variations. For example with my RBC account, there are no FEES if you do your banking online (if you transfer money between your accounts, if you do online payments, etc. etc.). Some other banks might have online banking fees. In most cases you will pay additional fees if you transfer money to other countries, other banks, etc. etc.
Monthly Maintenance Fee / Minimum Balance fee
Typically most banks have this fee where they either charge you a monthly maintenance fee (for having your bank account with them) or they charge you a Minimum Balance fee (if you have less than X 1000 dollars, where X is a number between 1 and 9, then they charge you the fee, if you have X 1000 dollars or more then they waive that fee) . Some banks may have one option or the other. If you are willing to keep x 1000 in the bank in your chequing, then you can avoid paying the fee.
Most banks do NOT charge you a fee to use their ATM machine with a debit card (ATM Card) issued by the same bank, others might do. However you will most certainly be charged a fee if you use your debit card at another bank (other than the issuer bank), another Bank’s ATM or other ATM locations that are run by separate financial companies.
TIP: When in need I encourage you to try your debit card at another bank or branch or company ATM location. Do NOT worry you will not be surprised by their fee. When you insert your card and try to withdraw the ATM machine will most certainly warn you in advance that there are fees associated with the transaction and will give you the option to accept / decline. The additional fee is typically between half a dollar and 3 dollars per Transaction.
TIP : If you know you will be charged an ATM fee and you have no choice then try to optimize the amount that you are withdrawing to make your transaction fee less.
Here is an example based on a real story. Last week we were at the CNE (Canadian National Exhibition). Similar to other outdoor events most outdoor food sellers at the CNE do not accept anything but cash (which is STUPID because there are options such as Square). My brother and I were both out of cash and we decided we needed to withdraw some money. I looked at the transaction fee. It was 2 dollars. So to optimize I withdrew 200 dollars ( I was sure I won’t need that much, but since I don’t deal with cash frequently and since Im at an ATM what the Heck .. I might as well withdraw that much). My brother on the other hand did NOT listen to me. He withdrew 50 dollars, and paid the 2 dollar fee. Some time later his 50 dollars vanished (damn you CNE), he needed more cash and I think I left or i might have been away. He withdrew 50 bucks again and paid yet another 2 dollars. OOUCH !!!
My transaction fees were around 1%, his were 4%.. that’s what he gets for not listening to the elderly!
There are a variety of other fees that the bank will typically charge you. Examples include Issuing you a certified Cheque or bank draft (with some banks and banking account types you get this free. If you play your cards right this saves you a lot of money) you will need Bank Drafts and certified cheques for your apartment rental, for a lot of Government and Immigration related transactions, as well as Elevator and Party room booking deposits ( if you are not sure what these are don’t worry, this is covered in the sharkhacks condo move-in guide)
A good financial practice that I recommend (and will talk about more in details in the financial guide) is that you dedicate one hour per month (or one hour per week) to review your bank statements and to look at all the fees, and all the expenses you incurred.
Credit Cards is a lengthy topic by itself which I will cover in a separate guide (coming soon).
Topics that will be covered include:
How to optimize the use of credit card to build your score.
Why use credit cards?
Different kinds of credit cards ( cash back, rewards, secure , non-secure, etc.)
Beware credit card DEBT !! its BAD .. the snowball effect. Debt calculations
How to use credit Card to get an immediate 1% discount on anything you buy
How Credit card companies pay me instead of me paying them.
Read your credit card offering carefully, there are some really good benefits and insurance
- Insured vs. non insured credit cards.
- Travel insurance
- Theft insurance
- Auto insurance on Rentals
Why you should review your credit cards on a weekly basis.
- Fees, fraudulent transactions, etc..