No fee banking has been around for quite a while now in Canada but I still see the majority of people around me using debit cards from one of the big five Canadian banks and I’m always asking myself “why?”. Most people must have at least heard that no fee banking exists by now but still people continue to pay monthly fees or keep large sums of money in their chequing accounts to have their monthly fee waived despite these freely available alternatives!
Maybe they just don’t think no fee banking is worth it?
Well, as a no fee banking customer that has been with President’s Choice Financial pretty much since they opened their doors back in the late 90s, I can confidently tell you that it is most certainly worth it. I mean seriously, what’s not to love?
The Pros And Cons Of No Fee Banking
This list of pros for no fee banking heavily outweighs the cons in my opinion. It can vary depending on your specific situation, of course, but for the average person it’s really hard to ignore the no fee option because it offers almost all of positives of traditional banking with almost none of the drawbacks.
- No monthly fee.
- No transaction fees.
- Unlimited transactions.
- No minimum balances.
- Loads of available ATMs.
- Unlimited free cheques.*
- Free overdraft protection.
- Top notch online banking websites.
- Earn rewards for everyday banking.*
- Much higher interest rates on savings accounts.
- Cheap overdraft processing fees and interest rates.
- Prompt and friendly customer service over the phone.
- Free money transfers to and from your other bank accounts.
- Convenient banking options online, by phone, on your phone, or at an ATM.
* Only available at some of the virtual banks, but not all.
- Occasionally higher one-time service fees like NSF fees, but not by much.
- No teller to speak to in person the once in a blue moon you might actually need to.
- No relationship developed with a personal banking representative at your local branch.
Related: Who Says Nothing In Life Is Free?
Major Purchases Need More Planning
As you can see, the only real drawback to virtual banking is not having a teller to speak with and to handle your request immediately. However, 99% of the time this isn’t actually a drawback because there is another more convenient way to carry out your banking needs without involving a teller.
Large Sums Of Money
The general rule is if you are going to be doing something that involves a large sum of money, you will need to do a little bit of advance planning. This is also true with traditional banks, but the problem can usually be solved in relatively short order with a teller if necessary.
With a virtual bank, if you need a large bank draft to pay for a major purchase like a new vehicle, you will need to call them a couple of days in advance so they can express post the draft to your home or place of business. In the case of PC Financial, they also will deliver a bank draft to any CIBC branch where you can pick it up from the teller. If you are in a rush, calling them to order your draft and requesting a rush be placed on it is the best way to go.
Third Party Depositors
The only other issue I ran into was in selling my house. When my lawyer called me wondering where to deposit the funds, he told me that he was unable to deposit them into a PC bank account. I think the reason for that was because he was using some type of draft or cheque to do it and needed a physical branch to make the deposit. He would have mailed me the money for deposit if necessary, but I had him deposit it in my Royal Bank account because I still had an unused savings account with them.
What’s Holding You Back?
If you aren’t currently taking advantage of no fee banking, I’m interested to know what’s holding you back? Please share your reasoning in the comments.
If you’ve already adopted no fee banking, I’d like to hear your own personal experiences with it good or bad.