I’ve been a PC Financial banking customer almost since they opened their doors nearly 20 years ago.
It’s been a great experience for me, and even though I’m using other virtual banks like Tangerine, they were always a reliable no fee go-to bank. All the important stuff was free, the interest rates were higher than the Big 5, and the online banking experience has always been top notch.
I’ll tell it to you straight – I’m pretty bummed that their virtual banking business is being completely taken over by CIBC and being rebranded as CIBC Simplii Financial on November 1st.
With 2 million customers hanging in the balance … I’m not the only one.
What does this mean for all PC Financial clients who can’t really imagine doing their daily banking anywhere else?
Banking As Usual In The Short Term
I logged into my PC Financial account the other day and saw a shiny new 2.5% interest offer on new deposits extending to October 31st. Quite the coincidence seeing as the very next day CIBC will take over, right?
CIBC is trying to hang on to as many clients as they can, and I’m happy to test the waters in the short term and see how this all shakes out – especially if they keep giving out rich bonus offers like this one.
The transition will be relatively seamless with your bank cards, online logins, and all other accounts and services remaining basically the same when the switchover happens.
You will eventually be sent a new debit card, but the old one will still work until that happens. There has been no announcement of any monthly account or other fees and interest rates will probably remain roughly the same, at least at first.
The biggest short term change is that they are going to be removing all Pavilions and no fee bank machines from Loblaw owned grocery stores. You can kiss that convenience goodbye. They will replace most of them with new ATMs that won't be free to use as a Simplii Financial customer. But you can still bank at any CIBC ATM or pay a fee to use one from another bank.
There also won’t be any opportunities to earn PC points through everyday banking and your bank card will no longer be linked to your PC Plus card. Most of those opportunities dried up a while back anyway though, and paying with your credit card is much more profitable, so no big loss.
It’s also worth noting, if you’re a PC Financial Mastercard cardholder, this change won’t impact you in any way. This is only for daily banking clients.
Related: No Fee Banking Is Totally Worth It
Expect Increased Fees In The Future
That said, PC Financial isn’t the first bank that CIBC provided the back-end services for. It wasn’t profitable for them before, and still isn’t. CIBC will be taking a $100 million charge when they take full control.
What does that mean for you?
Well, this isn’t the first time a big bank has swallowed up a smaller player either … remember when Scotiabank bought up ING Direct and renamed it to Tangerine?
Although Tangerine is still a great bank and one I’m happy to continue using, it hasn’t been all gumdrops and lollipops for their customers.
They’ve increased the price of cheques, upped NSF fees from $25 to a whopping $40, and added a returned item fee, inactivity fee, and dormancy fee. They also launched a credit card with top-tier no fee cash back and then halved the everyday cash back shortly after, along with removing its sign up bonus.
We can expect CIBC to do many of the same things that Tangerine did. They’ll sneak in a few fees here and there to make sure they’re profitable and try to cut costs where they can.
But, will it be enough to make the hassle of changing banks worth it?
No Fee Banking Alternatives to PC Financial
It’s always been PC Financial and Tangerine … Tangerine and PC Financial. They’re married in my head as the two top nationwide no fee banking choices.
They’ve always been neck and neck and this might be the change that gives Tangerine the edge … or CIBC could surprise us and actually increase competition. Don’t hold your breath on that, but stranger things have happened.
Here are Tangerine’s primary benefits:
- Tangerine’s accounts are all free of monthly fees.
- Unlimited free transactions of nearly every kind including bill payments, transfers to other banks, ATM withdrawals, and more.
- Savings interest rates are much higher than the big 5 and were always lockstep with PC Financial’s rates.
- Access to Scotiabank’s nationwide network of ATMs for easy deposits and cash withdrawals.
- Regular bank-wide and targeted interest rate promotions for existing customers.
- Mobile app and online banking are modern and easy to use.
- Refer your friends and earn a cash bonus in your account.
- Email money transfer fees are cheap at $1 apiece.
- You get one book of cheques free ($20 after that).
If you’d like to be ready before all this Simplii Financial stuff goes down, now is a good time to open a free Tangerine account because they’re celebrating 20 years since they first launched in Canada as ING Direct.
That means you’ll get $25 for opening a chequing account + $25 for opening a savings account + a $100 bonus for setting up automatic payroll + 2.4% interest on all deposits up to $500,000 for the first 6 months.
That’s $150 in bonuses plus a very good interest rate promotion, which I believe is the richest offer they’ve ever had. But, it’s ending soon on August 31st, 2017, so don’t wait if you’re thinking about opening an account.
Use my link and enter this Orange Key (Tangerine150) and you’ll get the maximum possible bonus.
2) Alterna Bank
Compared to Tangerine and PC Financial, the Alterna Bank website leaves a lot to be desired. Don’t expect a premium online banking experience here – but, if you don’t judge this book by its cover, there’s a lot to love:
- No fee eChequing, and eSavings accounts that are all free of monthly fees.
- Unlimited free “everyday” e-transactions of almost every type.
- 2 free Interac e-transfers per month and only $0.95 after that.
- Access to the The Exchange Network of over 3,300 ATMs nationwide.
- Permanently high savings account interest rates – currently 1.90%.
- Mobile cheque deposit.
The free virtual transactions and high savings rates are really nice, but the main downfall here is the fees start to pile up outside of what I listed above.
It costs $1.90 every time you want to make a withdrawal at an ATM for example, and you don’t get any branch access at all. You’ll also have to pay regular rates for cheques and the $42.50 NSF fee rears its ugly head again.
If long term high savings interest rates aren’t your top priority, then Tangerine is definitely a better choice.
3) EQ Bank
EQ Bank is still quite new to the personal banking world and their accounts are quite limited. They make up for that by pretty much doing away with fees of any kind (even NSF fees!)
Here’s what you can expect.
- One of the best permanently high savings interest rates – currently 2.30%.
- Unlimited transactions that includes funds transfers to other banks, bill payments, and mobile cheque deposits.
- 5 free Interac e-transfers monthly, $1.50 after that.
- Almost no fees of any kind (except the above).
Here are the main downfalls:
- No access to any physical locations or ATMs – so no cash.
- Really low maximum total balance of $100,000.
- No cheques of any kind available – paid or not.
- No access to TFSAs or RRSPs.
In short, you’re going to need another bank for some of your daily transactions. But, you can link up your other account with EQ Bank and profit from the higher interest rate and free transactions they give you.
4) Your Local Credit Union
Credit unions are a viable alternative to the big banks and the virtual banks.
You’ll get in-person service and many of them offer no-fee chequing accounts and savings accounts with high interest rates.
You can’t expect the online experience to be of the same calibre though – they just don’t have the resources to make that happen in the same way as national banks.
Features will also vary from one to the other, so I can’t really list them here. You’ll have to take a trip to your local branch and see what they can offer you. Report in the comments if your credit union has a particularly good deal.
Simplii Financial, Your Move!
I think what CIBC does with Simplii Financial over the next year is going to be telling and will decide what PC Financial customers like myself decide to do.
Remember to vote with your wallet if they take it too far and start tacking on way too many fees. We’ve been loyal customers for a long time, but that doesn’t mean we should remain that way forever.
Or will you even wait that long?