Low cost banking
Canadians have a wide variety of institutions to choose from when setting up their banking arrangements. Costs matter, a penny saved is a penny earned. A wise banking choice has the potential to save hundreds of dollars a year.
For personal banking, Canadians can use not only the "Big Six" banks, but credit unions, caisses populaires, specialty institutions like the Alberta Treasury Branch, and numerous "virtual banks" like ING Canada and Canadian Tire Financial.
Some of the things to consider when choosing a bank are:
- Convenience. If you need to access a physical branch for, say, a safety deposit box, how close is it to your home or place of work?
- Fees, including chequing account charges, extra ATM charges, electronic transfer charges, etc.
- Ease of lining to other accounts, including brokerage accounts, other bank accounts, etc.
The major banks offer a variety of different accounts, and often have an 'account selection' page to help in choosing the best one for a particular purpose.
Those who qualify should also look for special discounts for seniors or students.
Saving on banking fees - particularly "extra" fees not part of a package - while not paying for services that aren't used is particularly important for those on modest incomes. For example, getting $120 out of the banks ATM instead of using a 'white' ATM three times for $40 may save a surprising percentage in extra fees.
Under the terms of an agreement with the federal government, eight banks have agreed to offer low-cost account packages to consumers for under $4 per month. However, many other banks and financial institutions also offer account packages with low monthly fees. Your should contact your bank or financial institution to find out if it offers a low-cost account package.
Now that you are saving, you will have choices of where to put those savings to use.
- A penny saved is a penny earned, viewed February 15, 2012.
- Financial Consumer Agency of Canada, Low-Cost Accounts Summary, viewed July 26, 2012.
- Financial Consumer Agency of Canada, Tips About Low-Cost Bank Accounts