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moneysense.ca, 9/08/09
Citizen’s Bank Shutting down Free Chequing Accounts
Once again, President’s Choice Financial has become the only option for Canadians wanting a free chequing account. Citizen’s Bank of Canada, which launched a no-fee chequing account just last fall, is shutting the doors on most retail products:
We’re moving to a more streamlined business model that focuses on our strengths—our successful Visa* credit card and prepaid card business for consumers, and our equally popular foreign exchange services for non-retail clients.
As a result, we’ll no longer offer savings and loans products. The bank will become a non-deposit taking bank and thus, is selling most of its residential mortgages, consumer loans and real estate secured lines of credit to The Toronto-Dominion Bank (“TD Canada Trust”). Depositors in B.C. can choose to move their accounts to comparable products within our parent company, Vancity Credit Union. Depositors outside of B.C. can choose an EasySwitch™ option with TD Canada Trust.
The affected products are Chequing, Savings and US Dollar Accounts, Term Deposits, Registered Accounts and Business Accounts. As noted in the press release, the majority of personal loans and mortgages have been sold to TD Canada Trust but Citizen’s Bank is keeping the Unsecured Line of Credit and Visa card businesses.
The press release also noted that online banking has become a “crowded marketplace”. While it is true that a lot of online banks offer competitive savings accounts, chequing accounts can hardly be called “crowded” considering PC Financial is the only other player.
moneysense.ca, 9/08/09
Are the visa cards that great?
Isn’t the marketplace already saturated with a large number of different types of visa cards?
Their Visa card offerings are bland and generic at best. It’s a shame to see them go, I’ve been a member of theirs since ’97 and they’ve saved me thousands over those years. Even when I traveled abroad *before* their global chequing account, I never got charged an international withdrawal fee. I may need to move to PC and just suck up the occasional charge I’ve been getting for free for 12 years… seems like none of the dozen or so credit unions I’ve found while surfing for my Citizens replacement offer much savings over a “normal” bank.
If you’re in BC, Coast Capital has a free chequing account. As a happy citizensbank member, I’m very sad to see them go. They are/were a great bank. As an Ontario resident, I’m left with PC Financial (which for various reasons I don’t want to go with). I’m looking at Credit Unions right now.
Rumor has it that ING may be introducing chequing accounts in Canada; can anybody comment on this?
Interesting also, because it seems every time you turn around another bank WANTS to convert to a deposit-taking institution. Although I guess that’s because they want a piece of the retail-banking pie, and you don’t make as much giving away free accounts.
It’s worth noting that you can get free chequing accounts from large banks if you ask nicely enough. I’ve had free chequing at TD for two years and RBC offered me the same. I just asked for it then negotiated.
I’m trying to stay clear of PC too, sadly I’m stuck in Ontario. Christopher, let us know if you’ve managed to find something suitable, ‘cuz I’m ripping my hair out.
I might yet end up with something like ICICI…
@Jamie: I have a free chequing account with RBC that has a small number of free withdrawals. So, I also keep a PC Financial account for day-to-day use. It is hard to find an unlimited free chequing account with no min. balances.
@Christopher: I heard rumours that ING Direct is planning on introducing chequing accounts. They’ve been making lot of noise about how much fees the big banks are charging but that may just be a marketing tactic.
An interesting strategic retreat which speaks of how hard it is to gain market share from the major banks.
@ Art
ICICI now charges fees (unless you keep $500 in chequing a/c)…. the customer service and online access is very poor
HSBC’s Direct Savings account might be an option for some people. While you can’t write personal cheques against the account you can do direct deposits and bill payments to and from the account (they will provide a VOID cheque for you to use to get things setup). It works really well for me. No more shuttling money between savings/chequing. The only missing piece is being able to write a personal cheque — I keep a PC Chequing acct open for that purpose.
@gj
From their site: “Free, if you are enrolled in the Payroll Direct Deposit program for your HiVALUE Chequing Account.”
Since my employer direct deposits, that reads as “Free” to me.
Sucks to hear about their customer service and online access though. Those are the two reasons I stayed with Citizens for 12 years.
With RBC I get free unlimited banking due to having multiple accounts with them. It shows up as ‘multi product rebate’ which immediately redeposits my banking fees. Free unlimited banking, with a few strings that are ok with me.
What I don’t understand is why Canadian banks can get away with charging these fees while most U.S. banks can offer free chequing. My bank in the US offers free unlimited chequing, ATM withdrawls, and bill payments as long as you keep $100 minimum in your account. To get free chequing with the big Canadian banks you generally have to keep $2,000 to $5,000 minimum balance, and if you go under that balance even for one minute during the month you get socked with the monthly fee.
Is it actually more expensive for banks to operate here than in the States or are the Canadian banks just being greedy?
@brad I would have to guess and say that it is that whole economy of scale working against us here in Canada. However, I have also been told that the fact they charge so many fees has helped them fare better than the US banks during this economic downturn because a fair portion of their revenue is made off of the fees. (I don’t have any sources to back that up though.)
I am very interested in the idea of negotiating with banks about fees, visa, etc. I am very new to the concept of bargaining (learned the hard way during a recent trip to Mexico) and I don’t see how one person gets enough leverage to negotiate effectively with a bank. If anyone’s got tips, let me know
…
@Maiku When I negotiated with my bank it went something like this:
My employer did RRSP matching, but they only did it through RBC so I had to set up an RRSP account there even though it wasn’t my normal bank. As I was setting up the account, they offered to waive several fees if I moved all of my accounts to their bank. I told them that I would consider it, but that I didn’t want to change my accounts right away. I went to my bank and told them about the offer from RBC and that I was considering moving my accounts to them (Chequing, Visa, RRSP, and I was discussing a mortgage with them at the time). I asked them to match the offer from RBC and after we had discussed it a bit they offered to waive the monthly fee on my chequing account. I get all the transactions I used to but I don’t pay the fee and don’t need to keep a minimum balance.
I was never really one to negotiate for lower fees or anything like that, but I figured that the worst they could do is say no. If you’re looking for a little guidance you can read about negotiating with banks & other companies here:
http://www.canajunfinances.com/2007/07/06/free-banking/
http://www.iwillteachyoutoberich.com/blog/tip-5-optimize-your-cellphone-bill/
http://www.iwillteachyoutoberich.com/blog/tip-13-negotiate-your-car-insurance/
Canadian Western Bank charges no fees. Also I think Scotiabank has over 55 fee-free accounts.
I had a PC chequing account for years. It works fine as long as you’re content to do your banking online and at bank machines. When I needed to move close to $10,000, I had to have multiple bank drafts from the post office, because with no tellers they couldn’t do their own bank drafts. The limit for a bank draft at the post office is $999. I find that in banking, as with most other things, you get what you pay for. I have been with TD for a few years now, and I wouldn’t go back to PC. I’ll happily pay the $3.95 per month for access to a full service bank when I need it.
@WP: We bought our house about six months ago and we’d been saving up the down payment using a PC account. I needed a bank draft to make the payment and asked them about it. From what I remember, they transferred the money to a local CIBC branch I’d specified. I then went to the branch and paid CIBC their fee to prepare the draft… I don’t remember exactly how much it was but I think it was about $7 or so. Also, I had to pay PC a $26.50 fee to rush the transfer (next day sort of thing… time was short due to a miscommunication by my solicitor), but I think I recall there would have been no transfer fee if I were willing to wait 3-5 days or something like that. Just an FYI.
What about Canadian Tire Financial? Not that I use them but they claim to have no fees.
I’ve been very happy with PC Financial for over 10 years. Never had a problem and never paid a fee.
[...] 12th, 2009 · A recent post on Citizen’s Bank of Canada (see Citizen’s Bank Shutting down Free Chequing Accounts) elicited the following interesting tip on using HSBC Direct Savings Account as a main bank [...]
I’ve been with PCF for 8 years now, other then my debit card being frozen 3 times due to fraudalent activity..it had been pretty good. I also bought a house 3 years ago and needed a draft cheque, I called them the day before and they had me go down to my nearest CIBC and i got my draft cheque..pretty easy dealings.
Any one who can use a Citizen’s bank account can more than definitely use a PC account! Mind you you can get free withdrawals at PC and even CIBC machines. No one ever mentioned that in addition to free banking, you also get an interest, though nominal, on your chequing account balances. Plus there is a bonus in the form of points earned at Loblaws, nofrills etc!. I was with TD earlier and I just did not understand why should I pay fees to a bank to keep my money.Don’t they use my money to reinvest in the market and earn a profit on it? Typically banks charge $10 permonth. I figured that on an average balance on $1000 p.m. in the chequing account it amounts to 10% (!!!!!!) of that balance! That’s not the case with PC. Thier banking is absolutely free and I love the points as I shop at Lobalws and no frills. Surely prefer that to Citizens bank, considering that the are a division of CIBC itself!
[...] 10th, 2010 · No Comments With the exit of Citizen’s Bank last year, President’s Choice Financial is now the only game in town in the free chequing account [...]
[...] Financial still remains the only major game in town when it comes to no-fee chequing accounts (Citizens Bank briefly offered a no-fee chequing account but shut it down in less than a year). Consumers who already have a PC Financial account will see very little reason to switch because [...]