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Hello all,
I wanted to create this thread about personal finance so that current and prospective members of the CF could create a discussion regarding the topics of bank accounts, credit cards, loans, investing, etc. I have noticed that in general people do not possess a great deal of financial education, which is no fault of their own, since it is not taught in schools and generally people have to fend for themselves with regards to their own money.
Anyways, I wanted to start things off with what I believe to be the best (read: optimal) bank account setup for me as of the time of writing. Hopefully it will help you save some money as well. I do not pay any bank fees, have unlimited transactions as well as some of the highest interest rates offered by a big bank. How?
I use two banks: Tangerine and RBC. Both serve their purpose. My Tangerine chequing account is my daily driver so to speak – that’s where my direct deposit goes. It’s completely free, with unlimited transactions, and, to my knowledge, has the highest interest rate for a chequing account. If you need an ATM, you can use any of Scotiabank’s. If you’re interested in getting an account you can message me privately, I have a referral code that will get you $50 for signing up for an account online.
As for my RBC chequing account, it’s like my backup. I use RBC when I really need a physical bank location where I can walk in and talk to someone (I find it necessary from time to time). Also, they don’t charge any fees when using e-Transfer!
The trick is making the RBC account free. If you already have a RBC chequing account that you’re paying a monthly fee for, the first thing to do is change your account type to what they call “Day to Day Banking”. You can do this through online banking or in a branch. If you’re setting up a new account then just ask for the “Day to Day Banking” chequing account. This is RBC’s most basic chequing account. It doesn’t give you much, but it’s enough (as a backup to your Tangerine account). It’s $4 per month, but luckily RBC has something called the MultiProduct Rebate (MPR). They offer you a rebate each month (on your chequing account’s monthly fee) if you have a couple of ‘products’ with RBC (ie. a credit card and an investment account).
In order to qualify for the MPR, you need: (1) an active credit card or a credit card with an annual fee, and (2) a pre-authorized monthly contribution to a RBC TFSA (or investment account) or a minimum of $500 in a RBC TFSA (or investment account). If you have both of those things, RBC will rebate you the $4 each month and the chequing account will be completely free.
What I do regarding RBC’s MPR is I have a no-fee RBC Cash Back MasterCard that I use once every couple of months or so to buy a coffee (to keep it active) and I also set up an automatic transfer of $25 per month (the minimum amount required) from my RBC chequing account to my RBC TFSA.
If you don’t like RBC for some reason, you could always replace that with BMO’s Performance Plan account. As a CF member they will waive the monthly fee and it looks like they have also removed the need to carry a minimum balance, which is great.
Minimum balances actually have an inherent cost simply due to the fact that the money left in the account IOT satisfy the minimum balance requirement is not being invested and thus not generating a return. These returns compounded over an investment lifetime ends up being incredibly expensive.
I wanted to create this thread about personal finance so that current and prospective members of the CF could create a discussion regarding the topics of bank accounts, credit cards, loans, investing, etc. I have noticed that in general people do not possess a great deal of financial education, which is no fault of their own, since it is not taught in schools and generally people have to fend for themselves with regards to their own money.
Anyways, I wanted to start things off with what I believe to be the best (read: optimal) bank account setup for me as of the time of writing. Hopefully it will help you save some money as well. I do not pay any bank fees, have unlimited transactions as well as some of the highest interest rates offered by a big bank. How?
I use two banks: Tangerine and RBC. Both serve their purpose. My Tangerine chequing account is my daily driver so to speak – that’s where my direct deposit goes. It’s completely free, with unlimited transactions, and, to my knowledge, has the highest interest rate for a chequing account. If you need an ATM, you can use any of Scotiabank’s. If you’re interested in getting an account you can message me privately, I have a referral code that will get you $50 for signing up for an account online.
As for my RBC chequing account, it’s like my backup. I use RBC when I really need a physical bank location where I can walk in and talk to someone (I find it necessary from time to time). Also, they don’t charge any fees when using e-Transfer!
The trick is making the RBC account free. If you already have a RBC chequing account that you’re paying a monthly fee for, the first thing to do is change your account type to what they call “Day to Day Banking”. You can do this through online banking or in a branch. If you’re setting up a new account then just ask for the “Day to Day Banking” chequing account. This is RBC’s most basic chequing account. It doesn’t give you much, but it’s enough (as a backup to your Tangerine account). It’s $4 per month, but luckily RBC has something called the MultiProduct Rebate (MPR). They offer you a rebate each month (on your chequing account’s monthly fee) if you have a couple of ‘products’ with RBC (ie. a credit card and an investment account).
In order to qualify for the MPR, you need: (1) an active credit card or a credit card with an annual fee, and (2) a pre-authorized monthly contribution to a RBC TFSA (or investment account) or a minimum of $500 in a RBC TFSA (or investment account). If you have both of those things, RBC will rebate you the $4 each month and the chequing account will be completely free.
What I do regarding RBC’s MPR is I have a no-fee RBC Cash Back MasterCard that I use once every couple of months or so to buy a coffee (to keep it active) and I also set up an automatic transfer of $25 per month (the minimum amount required) from my RBC chequing account to my RBC TFSA.
If you don’t like RBC for some reason, you could always replace that with BMO’s Performance Plan account. As a CF member they will waive the monthly fee and it looks like they have also removed the need to carry a minimum balance, which is great.
Minimum balances actually have an inherent cost simply due to the fact that the money left in the account IOT satisfy the minimum balance requirement is not being invested and thus not generating a return. These returns compounded over an investment lifetime ends up being incredibly expensive.
