An Open Letter to my Bank
I’m breaking up with you. I know we’ve been together a long time. I strolled through your doors to open a savings account with my mom’s help when I was no older than eight. Since then I’ve opened a chequing account, took out both car and student loans, and opened several credit cards with you. We’ve had our ups and downs, but I won’t beat around the bush any longer, it’s not me, it’s you.
I first started to get a little frustrated when my chequing fees kept climbing after I graduated. It seemed a little expensive to be paying $10.95 a month when I was earning next to nothing. That’s $131.50 a year. You told me I was actually saving money on all my transaction fees, but I only have about three transactions a month. I hope that paying off the credit card I also hold with you was not one of those transactions incurring a fee, but I’m pretty sure it was. What about paying my other bills?
You told me my saving grace was to keep $3,000 in the account at all times. Then I could avoid those pesky fees! That’s an awful lot of money, Bank. I don’t think I want it just sitting around earning a low interest rate. Oh wait, my chequing account earned 0.0% interest. That’s quite the pickle, Bank. Either keep $3,000 earning no interest in the account or pay $10.95 a month. What if I don’t want to do either?
Okay, so you suggest you can move me to a lower fee chequing account and we can open a savings account to start earning that interest. Sounds alright to me, I’ll give it a go. Silly me Bank, I trusted your personal advisors again and didn’t read the small print for myself. That ‘High Interest’ savings account you opened for me also earned 0.0% interest if I had less than $5,000 in the account. Even the ‘Every Day’ savings account would have earned me 0.05% with my (in your eyes) small amount. Did you know this when you suggested my new account?
Bank, do you know how long it will take me to earn that $10.95 you were charging per month from interest on my $5,000 in your savings account?
4 years and 4 months. That seems a little out of balance to me.
Now for some real talk Bank. If I choose to leave I can get everything I want. No fee chequing accounts and savings accounts where I earn real interest, like 2%. That sounds pretty nice. The problem is I’m kind of scared to change. I worry it’ll be a huge hassle and I won’t be treated well at my new bank.
But Bank, I’m taking the leap. I’m leaving you.
Alright so that’s a bit of a dramatization but it’s my real thought process on why I decided to leave my bank and move to two separate online banks. I really get everything I want. It’s now been almost two years since the move and I haven’t looked back.
It was absolutely a hassle to move.
Some of the things I thought would be more annoying, like moving money between the two banks or not having as much access to ATMs haven’t impacted me at all. As Tangerine is owned by Scotiabank you have access to their ATM network and both banks have dynamite apps to make banking a breeze. I wasn’t one to go into the actual bricks and mortar bank before, so I don’t miss that at all.
The most important thing I learned by switching banks is that I don’t feel that sense of loyalty anymore and can now find what’s best for me. Ultimately your bank is in the business of making money so it’s up to you to read the fine print and ask the important questions to ensure the products and services they’re recommending are what’s best for you.
One More Reason to Protect Yourself
The Big Banks in Canada make money hand over fist and this has led to a corporate culture of high-pressure sales and some questionable business practices. The linked article from CBC Go Public talks to tellers from one Canadian bank who state they’ve actually broken the law to meet sales goals. For example by ‘upgrading’ clients to higher fee accounts without their knowledge. This really underlies why it’s up to you to watch your bank statements and protect your money. The article focuses on TD but it would be unrealistic to assume this behaviour doesn’t occur at every bank*. It actually happened to me through TD’s investing arm, TD Waterhouse. Fortunately, I monitor my accounts closely, although it took three phone calls and several months to have the money reimbursed.
*Update: CBC Go Public has released an article detailing this behaviour is occurring at all five of Canada’s Big Banks