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moneysense.ca, 26/05/10
Peoples Trust: Reader Choice For Savings Accounts
Many readers are clearly uncomfortable parking their savings with Ally (See Ally: A Good Choice For Savings Accounts) because even with CDIC coverage they are concerned with GMAC ownership of Ally. They would like to avoid Ally because, after all, a cash account should provide peace of mind, not sleepless nights over whether money is safe. Reader Robert recommends Peoples Trust instead. Peoples Trust is a Vancouver-based bank that offers savings accounts, Tax-Free Savings Accounts, RRSP Savings Accounts and GICs.
Peoples Choice pays a much higher interest rate on TFSA accounts of 3.0% and a slightly higher rate of 2.1% on its regular savings accounts. There are some fees but 5 free transactions per month should be plenty for most people. Peoples Trust offers non-redeemable GICs with interest rates that are better than ING Direct’s but not as good as Ally’s. All savings products have CDIC coverage. Here’s a slightly edited version of Robert’s note:
Ally is paying a decent interest rate but Peoples Trust pays a higher rate of 2.1%. I have been dealing with them for some time transferring funds back and forth from my bank account linked with them. No problem, no fees and guaranteed. Online transfers arrive the next day.
moneysense.ca, 26/05/10
If I may ask, how does Peoples Trust qualify as a bank that offers “online savings account”? How do you define “online transfers”?
My definition of an online savings account is one you can access on the Internet using a web browser; and online transfers are done from within this interface.
Did it not escape your notice that Peoples Trusts has no online banking at all? Everything must be done by phone and mail. And this is really the only reason I went with Ally over PT… I can’t live without online access!
@Charles: Good point. I removed the wording “online savings account”. Robert is referring to Electronic Fund Transfers (EFT) as “online transfers”. Once you link a chequing account to a Peoples Choice account, you can do EFT between the savings and bank account through this form. However, as far as I can tell, it doesn’t seem like you can view your balances online.
https://www.peoplestrust.com/purchaseadeposit/purchaseADeposit.php?purchaseADeposit&pcsa
Personally, I’m staying with Ally. I’m not hugely concerned about whether Ally could become insolvent. I’m satisfied with the protection offered by CDIC.
Been with People’s Trust for two years. There is no way to view balances online, just simply a monthly notice of your balance in the mail. Works quite well for cash savings I believe. Its not like I am playing with that cash very much anyway.
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@Cyrus: How do you transfer money back from Peoples Choice Savings into your chequing account? Do you have to phone it in?
I don’t often log in to my savings account either. But, it would be nice to do transfers both way online.
@CC: Transferring money can be done over the phone or via email to the staff at People’s to your linked checking account. With email, I usually get a response within an hour.
There is a crazy long thread here with tons of info about this savings account:
http://forums.redflagdeals.com/peoples-trusts-peoples-choice-savings-account-official-thread-2-a-720013/
RFD is where I first heard of People’s Trust.
Did anyone notice that People’s Trust mortgage lending is an “alternative to borrowers who may not meet all of the lending criteria of the major financial institutions.” I’m not sure I’d sleep any easier with my cash parked in subprime mortgages compared to GMAC.
@TonyR: It is almost impossible for retail investors to know the health of deposit taking institutions — even large banks. Look at how many large banks have vanished or had near-death experiences south of the border. Even ING Group was in huge trouble back in the early 2000s. That’s why making sure we have deposit insurance is available and stay within insurance limits.
I read recently how FDIC deals with insolvent banks. They quietly move in over a weekend and are open for business on Monday perhaps under a different name. Deposit holders sometimes don’t even realize the bank is under new management. I’d expect CDIC to operate along the same lines.
I agree with everything Cyrus has said above. i.e. there is no online banking at PT.
It really pisses me off when they pay 3% for TFSA but only 2.1% for their regular account – reminds me of those Ally ads. I’d rather they pay 2.5% to everyone. That’s why I’ll never buy a GIC from them.
I have been using People’s Trust for 2 years, although I moved my savings money out of there (and everywhere) when the rates got below 3%.
Peoples Trust is always listed as the highest savings rate in Canada. I don’t worry about amounts up to $100,000 because of the CIDC.
Phoning in to make switches is no big deal, because I never moved my money around much.
been with PT for about a year, so far so good
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Ally is not a CDIC member. People’s Trust is.
Check for yourself:
http://www.cdic.ca/e/insuredWhere/members.html#aa
@Smedley: Ally is not the bank. Ally is a product of ResMor Trust. ResMor Trust *is a member* of CDIC.
http://www.cdic.ca/e/insuredWhere/members.html#rr