Canadian banks, have they lost it?

In My Humble Opinion (IMHO)
#1

I’ve been a customer of the Royal Bank of Canada for many years now. As well as my regular account, I had my RRSPs with them. My savings account was nothing fancy… the interest rate was so low that if I got more than $1 interest for the whole year, it was a good year. But that was fine, I could deposit/withdrawal money as I needed, could write about 6 cheques a year and was allowed some interact payments for free. Last year I wrote a cheque for the first time in ages and was shocked when they charged me for it. When I phoned they told me that some new fees had been added to all accounts and I should have been told.
This co-incided with me recently trying out online banking and loving it! However, I had cancelled it because I refused to pay for something that was saving the bank money.

So I was ready for a change and went hunting for an alternative bank. A few days later I signed up for Presidents Choice Financial and I’ve never looked back. Except for taking money out of a non PC Financial/CIBC machine, I get everything FREE. Infact, they even pay you for your transactions by giving you points towards free groceries! I made more interest in my first month with Presidents Choice than I had in TEN YEARS with the Royal!!
I’ve persuaded several friends/family to switch over and they are all really glad they switched.

I did keep my Royal Bank account open. I usually kept about $100 in it just for the convenience of using their machines in case there was no CIBC or Loblaws around. Yesterday I got a letter from the Royal that they are again changing their fee structure. There are fees for just about everything now! As far as I can tell, the only thing that is now free is depositing, there is even a $0.50 charge for withdrawals from machines.

How can this go on? I know us Canadians have a reputation for bitching about things but not taking action, but do they really think Canadians will continue to get screwed while banks continue to make record profits while laying off more people? Even the CIBC (the bank that PC Financial runs their accounts through) re-introduced accounts free of charge if you have $1000 balance or more (accounts they removed a few years ago).

As a result, I’ll be closing down my Royal Account very shortly…

Anyone else sick of banks fees?

I urge any Canadian who’s paying bank fees with their current account to sign up with President Choice Financial
http://www.preschoicefinancial.com
and send a message to the greedy main banks.

#2
  1. What’s the great debate here?
  2. Careful mate - I doubt the mods like advertising, no matter how well-intentioned.
  3. Lots of banks in lots of countries charge fees for account-holding, ATM withdrawals and the like. You’re not alone.
#3

  1. Yeah, you’re right… it’s not really a debate… I thought a while about what forum to put this in and at the time it seemed like this was the best group… perhaps the pit would have been a better choice…

  2. Oops, sorry mods… it’s not supposed to be advertising as more of warnings off the greedy banks.

  3. True enough… my point being that at a time when more and more people are going to the better alternative, the biggest and richest bank it charging more, how can this be? Are the management that dull?

#4

I’m waiting for the day we declare banks an essential service, and order them to provide services without any additional fees.

Grrrr I hate banks that take my money for doing absolutely nothing.

#5

Well I’ll have a go at this.

Bank services are not free.

Teller machines don’t just run themselves. They require maintenance in both the physical and software/hardware upgrade sense. They often need to be replaced due to wear and tear as well as upgrades.

Tellers and account managers earn consederably more than $0.50 per transaction. I don’t have a very complex account structure nor do I have heavy deposit/withdrawal/transfer activity. However, whenever I need anything done while out of town, I pick up the phone and my account manager executes my instructions without fail.

On top of that, I can do many things simply via my bank-by-phone access, free of charge, from anywhere in north america using the 800 number.

That’s a lot of convenience at my finger tips. For that, I don’t mind having to pay total monthly account fee of $25cdn. It seems money well spent to me.

There are many things overpriced in this economy. A $3.00 cup of coffee at Starbucks being one of them. To me, Canadian banks still offer good value for my money.

YMMV.

#6

TWENTY-FIVE DOLLARS A MONTH??? Good god, man, where do you bank??

#7

I have accounts at a different Canadian bank and I pay 9/month for unlimited interact fees and thats pretty much it and all bills are done online so that’s free…

As far as low interest rates are conerned…Have you noticed that the lending rate is down to about 5%? well the banks are out to make money so they are obviously gonna pay out considerably less than that for checking/saving’s accounts.

Get a Savings Bond if you are looking for a relatively safe way to save money while still beating inflation.

#8

I used to think Canadian banks were bad… until my best friend moved to California.

Let me assure you, wooba, that we are blessed. The service my buddy has gotten from California banks has been awful beyond description; his attempts to get a car loan were straight out of “Brazil.” And they don’t have bank card pay anywhere.

#9

[Moderator Hat ON]

This looks like an opinion piece to me, so I’m sending it to IMHO. And be careful with the “sign up with X now!” plugs, they tend to smell like spam.

[Moderator Hat OFF]

#10

I have the Royal’s “Signature Plus” account. I pay $11.50 per month and my cheques are free, as is my safety deposit box, up to a certain number of interac transactions per month as well.

I’ve never had a problem with them. They gave me credit when no-one else would. I guess it’s got to do with my ‘personal banker’, Rose. Since I opened the account in 1993, she is the person who has handled any requests. She sends my son and myself birthday cards, and once when I was short of funds on a cheque years ago, covered it and called me to let me know. I find it rather comforting.

#11

Banking fees not a matter of great debate? Silly moderator… Doesn’t seem to have a clue about Canadian banking.

I have multiple accounts (hey, I’m old) and would make the following observations:

In order to get a non-fee plan, you have to keep a minimum balance. I have one with the Bank of Montreal (well, actually, they charge the fee, then refund it). You have to keep $3,000 in the account, but over a year you save $120 in fees (equivalent of 4% interest). Also, you can have more than one account (i.e. savings and chequing) and only have to maintain the balance in one. They pay dick as far as regular interest goes though. If you are saving money to purchase RRSPs, as opposed to buying them on a monthly installment, you can hold the money in your account until February and avoid paying fees during that time… sort of a toss up as to whether the interest you would otherwise accrue wipes out the gain of not having to pay fees.

If you can put aside more than the base amount you need to avoid paying fees, try something like ING (currently paying 4% compounded daily interest) - although you need a base chequing account to transfer funds back and forth - they are paying about as much as Canada Savings Bonds, and you don’t have to wait for them to mature to get at your money if you need it.

On the greater debate side of things. Have you noticed that on news reports for pretty much the last ten years, the big banks keep announcing “record-breaking” profits each year. Not satisfied with the profit margins they already have, they raise fees so that the profit margins increase each year. Now, at some point, their quest for increasing profits has completely turned into gouging the customers in favour of the shareholders. I understand that they exist to make profits for their shareholders, but at some point, their quest for greater and greater profits violates the public trust. There should be greater government regulation – a cap or tax on profits past a certain point. (I think that is a part of the reason why we New Democrats still have policy calling for the nationalisation of at least one major bank in order to impose some control on the industry.)

Also, have you checked out credit unions/caisse populaires? I believe the minimum balance they require for non-fee plans is significantly lower than the major banks. Also, they are more concerned about keeping individual clients than the big 5 ever will be.

Now, I realize that many are living from paycheque to paycheque, and keeping a $3,000 minimum balance is hard, but it can be done - I managed to do so even during the period where I was hovering right around the “poverty” line in terms of annual income. Of course my car was 20 years old, I lived (and continue to live) in what is best described as a hovel… hmmm, note to self: in next incarnation come back as an heir to a major fortune…

#12

I was dating a guy who was working on a Master’s degree in Economics; he was researching the Canadian banking system for his courses, and passed some interesting information on to me. I have no backup for this information, however; if anyone out there has more reliable information than this, please feel free to correct as needed.

He told me how the major banks only need to have something like 3% of all the money in accounts in Canada actually in their reserves. If we were all to go close our accounts on the same day, we would collapse the banking system (we wouldn’t be allowed to do so, though; there would be intervention.)

He also explained to me (somewhat) about how banks take the money we give them to hold for us, take that money (because they don’t need to hold it in reserve for us), and invest it (either long-term or short-term), and take the interest that our money earns for them, re-invest it, make more money, etc. Then they pass the profits on to their shareholders, and raise fees for the common people who think that their fees are essential for the banks to continue running.

Another point he mentioned is the connection between the banks and the government of Canada. There is, apparently, a very strong connection between the two groups. They work together and co-operate to make the most profits for both groups, as far as I understand.

I do not believe that there is any justification for banks’ raising fees, or even charging the level of fees that they are currently charging. The banks are making monster profits from two sources; our money in accounts, and our fees. I wouldn’t mind them making money off of me and not passing any of it back to me, if they didn’t charge outrageous fees as well.

#13

Bingo! The average Canuck has no idea that banks actually take the money in their accounts and turn it around to invest it.
Back in one of my University courses we looked at the marriages between political figures and the heads of some of the top corporations in Canada. Who’d have thunk that Jean Chretien and Brian Mulrooney were relatives? and that both have very close ties to just about every major corp in the nation. (Sorry, I don’t have a cite at the moment, unless I go dig through class notes which are 3000 km away.)

**
That’s prime. How many folks do you know paying prime rate, or who have anything under 8 or 9%? A friend of mine just paid off her student loan, and she was paying 18% interest.
And I don’t know about you, but the interest paid on my account is somewhere under one-quarter of one percent annually.

#14

Did your friend also step back through a time portal when he crossed the border, and end up around the year 1979? We’ve got debit card payments all over the place down here.

I don’t tend to get too hot under the collar about bank fees. Mine’s been pretty good about crediting online purchases that turned out unsatisfactory on a refund-first-and-verify-later basis. In fact, it seems to me that banks have become the first line of complaint when you buy something online and decide it isn’t satisfactory. If you can’t contact the vendor or he doesn’t answer your emails,
you can always tell your bank you want to dispute the charge. Usually they’ll credit your account right away.

#15

Well, since this is in IMHO, I guess we’ll let the cite go this time. Just don’t let it become a habit. :slight_smile:
That doesn’t surprise me at all. In my previous post, I didn’t mention my ex-boyfriend’s suspicions that some of his research was being squelched by his professors for risk of sounding too out there, but I have very little difficulty believing that there is a lot more going on in the banking/government/university fields than I will ever know about.

#16

Wooba, I’ve been a member of that bank since about two months after they opened. Haven’t paid a fee yet, and never had a problem.

Canadians were among the first to embrace the use of ATM’s and on-line payments. I don’t even have an account at a real bank anymore (the PC bank doesn’t have branches, just an interent/telephone presence).

Speaking of on-line payments, I have a small business website with “SECURE” on-line payments available (my own, not through one of those PayPal types). Most of the sales are to the US, and I’m continually surprised at the number of customers who refuse to make an on-line payment.

I can’t remember the last time I mailed a cheque to pay a bill, and there isn’t anything I want to purchase bad enough to make me get a money order.

#17

Banks are businesses. And like all businesses, they are there to make as much money in the long run as they can. If you don’t like their fees, find a smaller bank or credit union that doesn’t charge as much in fees.

Where I live in Connecticut they just finished a court battle that verified the right of banks to charge you a fee if you use another bank’s ATM - even if that other bank is ALSO charging you a fee for not being a member. As an example, I withdraw $20, and get hit with 2 $1 fees, one from my bank and one from the bank that owns that ATM. That’s 10% in transaction fees. That is also why I almost always pay by credit card, and avoid transactions at ATMs that will cost me fees.