Loading ...Like many people, I dislike paying bank fees, but I didn’t want to switch all my daily banking to a free account such as what President’s Choice offers. I like the full service features of my bricks and mortar bank such as Royal Bank of Canada, TD, Bank of Montreal, etc., just not the high monthly fees! The Solution My solution was to set up a Line of Credit (LOC) and use that for all my banking instead! If you keep it overpaid (debit balance) all the time, it costs nothing to use and has unlimited transactions. How to Set It Up I have it set up as the default for all my bill payments in online banking for all my auto withdrawals (I send them a void LOC cheque to set up) and have my paycheque automatically deposited into it. Accessing Your LOC From an ATM! I even had my bank set up the LOC as a button I can use from an ATM! With this, I can withdraw cash directly from the bank machine from my LOC balance. Wait, There’s More Perks! My bank (TD) also offers free unlimited cheques for my LOC. This alone is a big savings, as cheques for a regular bank account are rather expensive. How Much Can You Save? My savings using this strategy amount to about $120 per year. Closing Points Some points to remember if you plan to do this;
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Posted under Banking, Line of Credit, Tax Free Savings Account
This post was written by Bullseye on February 6, 2009
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RBC and BMO have deals where you don’t have to pay for bank fees, provided that you have a certain amount of money in your account (eg. 1k-3k). Still PC Financial is still the way to go if you don’t care for brick and mortar banks.
Thank you!
The packages where you keep a minimum balance to avoid a fee may seem like a good deal at first, but in reality you are getting zero interest on that money.
So your loss of interest you could be earning on that money is, in essence, your imputed bank ‘fee’. They get to use your minimum balance money for free, they turn around and lend it out for a profit.
RBC has something better than minimum balance: basic account is free is you have a rewards Visa and an investment with them. Their TFSA has no fees (other than commission for actual trades) and plenty of no-fee Visa cards are also available. So you don’t have to park a substantial amount of money with them just to have free account, and whatever you do park (through Direct Investing) is actually earning you money, not just sitting there.