Scotiabank has launched a campaign called Let the Savings Begin to encourage Canadians to save more. The bank says its market research found that saving an additional $1,500 would improve the financial well-being of 72 percent of Canadians and it has designed a campaign to do just that. It’s not just empty words — the Bank is offering a nice bonus for clients who participate in the campaign.

If you are already have an eligible Scotiabank chequing account, the Let the Savings Begin campaign allows you to earn a bonus of 10% on savings that you accumulate over a 16 month period between July 5, 2010 and October 31, 2011. The maximum bonus amount is $150. The savings should me made through a combination of at least two of the following:

  • Bank the Rest program that automatically rounds up every purchase made using a Scotia debit card to the next multiple of $1 or $5 and the sweeps the difference between the purchase total and the round up amount to a Scotia Money Master Savings Account.
  • Scotia Momentum Visa card that earns a 2% cash back on eligible gas, grocery and drug store purchases and a 1% cash back on all other eligible purchases.
  • A new or additional automatic transfer of at least $50 into a savings or investment account.

If I were a Scotia customer, the easiest way to earn the $150 bonus would be to sign up for a pre-authorized contribution (PAC) deposited into the Money Master account, which normally pays a pitiful 0.15% interest on balances below $5,000 and one of the other programs. The actual PAC amount would depend on the estimated savings from the other program. You can find the terms and conditions of the savings bonus here.

This article has 19 comments

  1. Let the competition begin, we just signed up with TD for their $250 bonus, I know RBC has some sort of similar promotion. They should give free iPads away! ;)

    • Canadian Capitalist

      @Sampson: I signed up for the TD Bank $250 offer late last year but that’s only because I had decided to consolidate all accounts with TD as I like TD Waterhouse the best so far. But then again, if some other broker offered a 1% deal, I might be tempted :) And yes, hooray for competition!

      I’m passing this one though. Opening new accounts is a pain in the neck and $150 is just not rewarding enough. If I already had a Scotia account, it would take less than 1/2 hour to set up to earn the bonus.

  2. I do bank with Scotia, but I’m passing on this promotion. Contributing an extra $50 a month to my investment account would be simple enough, but both the Bank the Rest program and the Visa card strike me as “spend more so you can save” ideas, which I think are deceptive.

    • Canadian Capitalist

      @Canadian Couch Potato: Fair enough. I agree that Bank the Rest sounds very gimmicky especially for those who already have a savings habit. I already have a cashback card and my spending decisions are not influenced by the fact that I get about 1% back. But, I agree that some people might think that way.

  3. I don’t know what kind of savings rate that they’re assuming in that Financial Post article, but $1500 of savings per year for 40 yrs is only $60K. Even if you maximize your TFSA contribution and put $5000 in savings for 40 yrs, you only get $200K money straight up cash.

    I’d have to check my charts at home to see exactly what interest rate you would need to end up with $1 million, but I’m sure that you can’t possibly get that rate of interest without taking on HUGE amounts of risk. I’m thinking it would require interest rates which are only guaranteed by the likes of Bernie Madoff.

    We all know how well that turned out.

    • Canadian Capitalist

      @Phil: If I contribute $1,500 for 40 years at 5%, I’ll have $190,259. If inflation were 2%, the contributions alone would be worth $92,415.
      If I contribute $5,000 for 40 years at 5%, I’ll have $634,200. If inflation were 2%, the contributions alone would be worth $308,050.

      If I contribute an inflation-adjusted $5,000 and earn a 3% real rate of return, I’d have $388,316.

      To save $1,000,000 in today’s dollars, I need to contribute an inflation-adjusted $5,000 annually for 40 years and earn a real 6.8% on my investments.

      At a more realistic, 3% real return, I need to save $13,000 over 40 years.

  4. The website seems to suggest that this needs to be set up through an advisor. If I just set up a PAC from my chequing account to my money master account, will I automatically qualify? I don’t have the time to hassle with going into a branch for a measly $150 in a year and a half.

    Thanks.

  5. Sounds very gimmicky to me.
    The debit card use probably has transaction fees. The credit card has an annual fee.
    The account pays no interest (0.15% annually? – how exciting!)
    Are you sure this is not just to increase their deposits (capital reserves) which they’ve been losing for years to the “high” interest internet banks (Ally, Peoples, Manitoba Credit Unions, etc)?
    —————–
    @CC – I also want to open an account at TD Waterhouse next year. Can they link my credit union chequing account or do I have to have an account at TD bank? That’s a deal breaker for me.

  6. It seems Canadian consumers could be more demanding. Why respond to a special offer with only temporary benefits? Sure, participants can get up to $150. But like forgotten gift cards and neglected credit-only-refunds, the providers are counting on many customers not to carry through on getting the full benefits. Moreover, after the program is over, thousands will have signed up for a service for which there is a cost in time/effort to switch out of. The bank knows that this hassle of switching gives them some leeway to pluck a few feathers off the chicken. Over the longer run, things could average out – – and perhaps even in favour of the service supplier. That’s why it may be better to wait for offers with permanent or longer-term benefits. In the meantime, it might pay to stay put with your existing institution and wait for them to introduce their incentive plan.

  7. Canadian Capitalist

    @gs: I think a savings account such as money master account also qualifies. I won’t run around setting this up either. If it takes more than 30 minutes, it would be a deal breaker for me.

    @Sean: Agreed. No sense paying any fees to earn the $150. Also, no sense spending hours filling out forms to try and earn it. I don’t have a Scotiabank account but at TD, I can set up a savings account, sign up for Simply Save and a new PAC in less than 30 minutes. If it takes longer, I agree with the comments that it ain’t worth it.

    I used to have a TDW account earlier and my main bank was RBC. To add money to my TDW account, I simply dropped into a branch with a personal cheque made out to TDW. However, I did not require a way to take money out of the TDW accounts, so I never bothered to investigate EFTs to and fro an external bank account. I don’t currently see an easy way to set up a EFT at TDW but if I were you, I’d make a quick call to TDW to find out.

    @Larry: Fair enough. Some special offers, even if they are one off are worth it. A few years back, RBC Direct offered a 1% inducement to switch. Now, *that* is one sweet offer :)

  8. Pingback: » Special offers from financial institutions Canadian Business Blogs | Advice on Investment in Canada, Stock Market, Small Businesses Opportunities

  9. CC
    So if one has a portoflio of $100k, that 1% from RBC would translate into $1,000. That would be sweet.

  10. Pingback: Tweets that mention Scotiabank’s Let the Savings Begin Bonus | Canadian Capitalist -- Topsy.com

  11. I recently switched to TD bank for the $250 promotion (I was actually planning on switching to TD the month before to consolidate and simplify my banking so the promotion was a true bonus). I wouldn’t switch to BNS for this promotion, but if I already banked with them I would take advantage of it.

    One thing I would be careful about is to make sure that the automatic “sweeping” of funds into the savings account does not put your balance below the threshold to avoid banking fees. I’m not sure about others, but I usually keep a minimal amount of funds in the chequing account as it pays no interest.

    As an aside, I switched to iTrade when they had the 1% self-directed RSP promotion. Maybe they’ll introduce it again in Jan 2011?

  12. The Money Master at Scotia pays a pitiful 0.15% on balances over $5,000 as well.

  13. I think the idea is that I would put the absolute minimum in the money master in order to earn 10% guaranteed… which is a pretty damn good rate, if you already have the account open (which I do). Otherwise, I agree with everyone here that it’s not really worth the hassle.

    • Canadian Capitalist

      @gs: I think so. Saving $1,500 over the next year would earn $150. That’s really really good and well worth 15 or 20 minutes of your time. And yes, I won’t open an account with Scotia just to get that $150. That’s really not much of an incentive for the amount of work involved.

  14. never mind the bonus offering , the Bank the Rest concept is a modern day piggy bank way of forced savings. EvEry time you use ayour bank card ( interac) the system automatically rounds off the transaction to the nearest dollar ( or 5 dollars..consumer’s choice) and set the change aside for a rainy day. Your saving without even noticing…not painful at all! Let the savings begin WOW!!TERRIFIC CONCEPT

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