Wednesday, February 15, 2006

Frugal Focus Bank Shopping Part 4 - Online Tools

Almost there, honest.

As I mentioned before, I've come to rely heavily on online banking. TD Canada Trust has recently won a number of awards for their online banking solutions, so I fully expected theirs to be a tough act to follow.

As a very brief summary, both BMO and PC Financial offer 'online banking tours' that allow you to get a good feel for their services. I like the BMO user interface better than PC Financial and maybe even TD. As far as features go, both BMO and PC Financial have the core functionality one would expect - account summaries, account details, bill payments, transfers, export to accounting software, etc. I appreciate the ability with the BMO site to pay multiple bills through a single process (I always end up paying bills in batches).

From what I could tell, neither offered online cheque images, which will force me to start carefully logging cheques again, which arguably I never should have stopped. PC Financial also doesn't have epost integration for bill presentment, but I'm still getting a number of paper statements with TD anyway.

In summary, PC Financial appears to be the way to go - they have no fees, they will reduce my grocery bill by $33 - $213 annually, they have a decent online banking system, and when needed, offer in-bank services through CIBC. If things go well, I may also evaluate their insurance products for house and home.

The only question remains how to logistically manage the switch, and whether or not to keep my TD account, though shifting to a lower-fee plan.


Blogger The Frugal Canadian said...

You might consider opening a TD/BMO savings account until you are fully transitioned over to PC financial. Savings accounts are free and from what I recall there are 2 free transactions a month with the savings account. You can then close your TD account with the associated fees and use the savings account as a backup.

I've found that it is nice to keep an account where if i can walk into a branch for items such as certified cheques.

2/16/2006 5:40 PM  
Anonymous Dave said...

I really like TD's online banking. It's been a long time since I used TD for chequing but I still have a mutual fund account there and overall I like their system. BMO's has always been pretty bad although it has been getting better over the last year (they added a few new features). I don't mind PC's, except that there is a simplified and detailed account view (which I don't like because I have to click too many times to see the detailed view). I wish there was just one (the detailed one). I just switched to PC and I am glad I did. It will save me $10-25/month on fees.

Don't fret too much about the free groceries. Rewards programs are just a scam in my opinion. As you said in a previous post, qui bono? Who's to say that you won't pay that much more for groceries in one year at PC rather than their competitors. Who's to say that you won't spend that much more because you are using credit to buy groceries rather than cash. Actually I just noticed your previous blog post is all about this... I will have to check that out...

2/16/2006 10:56 PM  
Blogger Humble Investor said...

FC - Good idea. The TD savings account is indeed fee-free so keeping it won't cost anything and I can still access those rare (but necessary) in-bank services (signature guarantees, certified cheques as you mention, etc.) In the same vein I'll likely keep my childrens' accounts active.

Dave - I'm looking forward to the savings as well and will likely open my new PC account this weekend and start the untangling process as I change all my autoamted withdrawls, etc. over the next month or so.

In general I agree with you regarding incentive programs - they exist in order to make money for somone other than me. That said, I think if one is disciplined one can 'beat the system'. For example, I currently buy my groceries at No Frills anyway, one of the PC family of stores that earns points that is generally much cheaper than Loblaws and RCSS. Points will (hopefully) be just a fringe benefit, as intended.

2/16/2006 11:52 PM  
Anonymous Anonymous said...

You mentioned that you still have access to CIBC branches with Pc Financial if it were necessary. This however just isn't true. CIBC does operate PC financial but the CIBC branches won't be able to offer any assistance whatsoever with PC financial products. For any service with PC financial you have to call their toll free number, or go to one of the pc financial pavilions at most Loblaws/fortinos/RCSS etc. Its a pain in the butt to get certified cheques/loans etc, but the cost savings have offset any inconvenience for me.

2/17/2006 8:33 AM  
Anonymous Canadian Capitalist said...

I agree with Anon. I am pretty sure you can't access CIBC in-branch services for a PC account. I still keep my Royal Bank checking account just for occassional transactions.

2/17/2006 1:11 PM  
Blogger Humble Investor said...

Anon and CC - thanks for pointing this out. I agree with your advice and similar feedback from Frugal Canadian. I'll keep my saving (no fee) account alive at TD and move my everyday chequing to PC.

Thanks again ...

2/17/2006 10:42 PM  
Anonymous Dave said...

Humble Investor, regarding incentive programs, I think it's tough to know whether you can "if one is disciplined one can 'beat the system'." It's hard to measure and quantify this (whether you are beating the system or not). If you do beat the system, the best you can get is net 1 or 2% of your expenses back. In the worst case, you don't beat the system and have spend x% more than you normally would have, where x may be much more than 1 or 2. Trying to "beat the system" is a bit of a gamble with very little upside if you do manage to beat it.

3/10/2006 8:49 PM  
Blogger Humble Investor said...


I have to respectfully disagree - or at least better explain my thoughts on this.

With respect to bank fees in isolation, its not hard to beat the system at all. Open a PC Financial account and you go from paying fees to paying no fees. Provided you don't use non-CIBC or PC bank machines, this requires very little discipline at all and the risk, if any, more than compensates for the benefit. In my case, I went from TD's Infinity account ($13/month) so the upside was a potential $155.40 in annual reduces d expenses. I've been using my PC Financial MC in all cases where I would have paid by cash/debit, taken the receipts home and paid off the amounts the same day. I racked up a decent amount of points along the way. Note that when I went out looking for an incentive program I wasn't concerned with travel (aeroplan) or merchandise (air miles) but groceries, as these have a practical impact on my expenses.

Is this particular savings a big deal in itself? No. But if personal cashflow, crudely, equals income - expenses, like most people, its easier for me to decrease expenses, incrementally (i.e. by 1 or 2% as you note) than it is to increase my income.

In this context, I've been looking at ALL my expenses - bank fees, heating costs, long distance and phone services, groceries, transportation, etc. This is where it takes discipline. Is it easy to save $13 by switching banks - absolutely! But researching and reducing a whole panoply of expenses - as I've been documenting here - takes time, emotional will and the commitment to embrace change.

So basically I'm not hunting out incentive programs in and of themselves, but rather as a tactic to support this overall strategy.

Thanks again for your thoughts. I do realize, clearly, that the incentive programs/loyalty groups need to make money and/or support businesses themselves, and do so typically off the backs of the very consumers they are trying to incent.

3/11/2006 7:36 AM  
Anonymous Investing Intelligently said...

Humble Investor: When I said "beating the system" I meant in the context of incentive programs not banking plans.

"So basically I'm not hunting out incentive programs in and of themselves, but rather as a tactic to support this overall strategy."

Ok sure, but I think the incentive programs should always come second, whereas real money like the $13/month should come first, which is what you did.

"I do realize, clearly, that the incentive programs/loyalty groups need to make money and/or support businesses themselves, and do so typically off the backs of the very consumers they are trying to incent."

Couldn't have said it better myself.

3/21/2006 9:24 PM  

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