While a segment of individuals has opted to rely solely on digital banking, a significant portion of Canadians continues to utilize traditional banking institutions. This isn’t inherently negative, but it raises an important question: Are you fully leveraging the benefits provided by your bank?
Conventional banks present a plethora of products and services; however, many customers appear to be engaging with them primarily for basic deposits and withdrawals. Although some may feel that additional features are unnecessary, these extras are frequently included in the fees you incur—so why not make the most of them? Here’s how to maximize your banking experience.
Access Fee-Free Banking
Nobody enjoys incurring fees, and while that’s understandable, it’s worth noting that many banks can waive account fees upon request. Numerous financial institutions provide no-fee accounts for students and seniors, but it’s up to you to inquire about these options. Additionally, banks often forgo monthly fees for chequing accounts as long as a minimum balance is maintained.
Though keeping $3,000 to $5,000 in your account might feel unappealing, premium accounts typically come with added benefits like complimentary credit cards, safety deposit boxes, and cheques, among others. Even if you don’t utilize these services frequently, consider the minimum balance as a form of emergency savings. While this sum may not earn interest, it serves to eliminate monthly fees, potentially saving you between $15 and $30 each month.
Of course, you’d incur fees if you needed to dip into this fund, but you can always switch to a lower-fee account during tighter financial times.
Utilize Available Bank Services
Many individuals are certain they won’t require the services their bank offers, yet unexpected situations often arise. For instance, if my condo mandates a certified cheque for reserving the party room or moving elevator, I discover the importance of having access to such banking services—after all, not many people carry certified cheques.
Even if my usage of the safety deposit box is minimal, it provides peace of mind knowing my family heirlooms are secure. Similarly, having access to bank representatives can prove invaluable; for example, I couldn’t establish my daughter’s RESP without visiting a branch due to specific requirements. The personnel and offerings at banks often hold more significance than one might initially assume.
Consider Credit Card Product Switching
This applies to many credit card issuers: did you know that you can frequently switch between credit card products without harming your credit score? If you’re unsatisfied with your current card, instead of canceling and applying for a new one, you can simply reach out to your bank or credit card issuer to request a switch.
A product switch maintains your credit history while avoiding any negative impact on your credit score, but this advantage typically exists only when switching within the same credit provider.
Moreover, these switches can be beneficial. For example, if you currently hold a Scotiabank Momentum Visa Infinite card but notice an attractive sign-up promotion for the Scotiabank Passport Visa Infinite card, you can switch to capitalize on that offer.
Before switching, remember to utilize or transfer any existing rewards points, as they could be forfeited during the transition. Additionally, be aware that not every promotion is applicable for product switches, so it’s wise to check with your issuer before proceeding.
Incorporate a Digital Bank
While this discussion might seem to favor traditional banking, I truly believe that everyone can benefit from using a digital bank as well. Why utilize both? Digital banks often provide competitive interest rates on your deposits.
Institutions like EQ Bank and Alterna regularly showcase some of the highest interest offerings in Canada. Although Tangerine remains competitive, they have recently shifted focus towards promotional offers. Moreover, motusbank has recently started accepting applicants and is worth exploring.
Digital banks facilitate easy linking to your primary bank account, allowing for seamless money transfers, and many also offer free e-transfers for added convenience.
Conclusion
Conventional banks continue to play a crucial role, so there’s little reason to criticize them. They fulfill essential functions for many Canadians, and digital banks can effectively enhance their services. Therefore, consider taking advantage of both banking options.