Best Way to Save Money on Account fees?

Hi folks, 

Looking for some saving advice. I'm really tightening up my budget right now and trimming off the excess fat there, one of them being my chequing account fees. I currently pay $14.95 per month for unlimited chequing through CIBC. I need unlimited with the number of transactions I make. I'd love some feedback and advice regarding the pros and cons of my various options. 

The most obvious choice would be to switch to a different bank with lower or zero fees. The biggest reason I'm not immediately doing this is that I have been with this bank for over twenty years, and they have been very good to me. One of the major benefits has been their fraud/theft protection- at least once every 12 to 18 months, there is unauthorized activity on my bank card. Sometimes it's hundreds of dollars or even thousands. They have always immediately repaid the money with no questions asked. 

I have tried to better protect my information. I'm not making any unprotected transactions online or being careless. I honestly think its just a consequence of living in a big city with lots of scammers around, and I can only be so vigilant so it scares me not to have that protection. For me, it makes the bank fees worth it because it has paid off tenfold when it comes to theft protection.  However, I'd still like to weigh my options and avoid those fees if possible.  I would consider switching banks if I knew they would also protect me from theft. 

Another option I have is to maintain a minimum chequing account balance of $3000. CIBC will waive your monthly fee if you maintain that daily balance, which I could do by relocating some of my savings. This seems like it could really pay off, as that money is only earning me about $1 per month in interest in the savings account. Obviously saving that $14.95 would pay off much more than the current interest. It would save me nearly $180 per year, vs. earning an extra $12 or so. 

This leads me to another question, though- is there somewhere else I could put that $3000 where it would be paying off MORE than it would if I relocated it to my chequing to avoid the fees? 

I'd love some input! 

TIA, Alex 

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  • Hi Alex. I'm following out of curiosity as to what others suggest as far as a savings account with higher interest rates. I wanted to say (though I am far from any type of financial expert) don't all banks offer fraud protection? My checking account has no transaction limits or minimum balance and it is 100% free. However, the bank will block transactions they are iffy about and text me to confirm or deny making them. Once, $600+ was taken from my account to purchase basketball tickets in another state. I was able to be refunded right away. Meanwhile, the bank investigated with minimal effort from me, and sent a letter to confirm they had verified I did not make the purchase.

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      • Ivory Sound
      • Ivory_Sound.3
      • 13 days ago
      • Reported - view

      Magenta Camera That's what I would like to know, as well. I think that they may all offer some level of protection, however I have had a frustrating experience in the past with a different bank. I had had some theft off of my card, and before they would refund me they had to individually investigate each claim. It took at least a week, from what I remember. At the time, this was super problematic for me as I was living paycheck to paycheck and needed access to that money immediately. While I'm in a much better spot now, it would still really mess me up if thousands disappeared for that amount of time. I'm attached to my current bank because they refund me immediately, I suppose because of decades of being a client? So it makes me nervous to start fresh somewhere new. However, I'm not completely opposed to it. I guess I just need a good reason to do it vs. maintaining their mimimum balance. Because so far, I haven't found a guaranteed investment return better than $180 per year on that $3000. 

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  • Lots of banks have lower minimums to avoid fees, many even $0 (i.e., feeless). Switch to using a paid-in-full credit card, and you don't have to worry about the fraud issue.

    At the very least, reallocate enough savings to satisfy the minimum checking balance requirement. 

    Like 1
      • dakinemaui
      • dakinemaui
      • 12 days ago
      • 1
      • Reported - view

      CIBC's savings account rate is abysmal at 1/20th of 1%. I would drop them in a heartbeat. Any of the bigger online banks have free unlimited checking and savings rates at 1.2% (24x higher than CIBC) (Until recently, they were over 2%.) Ally is a popular choice.

      As long as there are sheep, they will continue to be sheared. Don't be a sheep.

      Like 1
      • Ivory Sound
      • Ivory_Sound.3
      • 12 days ago
      • Reported - view

      dakinemaui I don't actually have my savings account with CIBC, I have it with tangerine. I'm looking at dropping CIBC now though, thanks! 

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    • HappyDance
    • YNABing consistently since 2014
    • HappyDance
    • 12 days ago
    • Reported - view

    I went from an unlimited transaction account at RBC, also at $14.95/month, to their zero-fee account. It required a few changes in how I did money and transactions, but nothing I couldn't handle and get used to. I saw it as a challenge in the early days.  The no-fee account limits me to 12 free monthly transactions, and I've never exceeded that.

    First, in reading the fine print, I learned that transfers to any other RBC account -- credit card, savings, RRSP, TFSA, direct investing account  -- does not count as a transaction, so I moved all my recurring utility payments to my RBC Visa. That reduced a recurring 5 monthly transactions to none.

    My no-fee account does not give me the option of overdraft protection, and that was initially concerning.  For my own peace of mind, when I calculate how much cash I need to leave in my chequing account each month for the upcoming transactions and irregular scheduled annual expenses, I include an extra $1,000 on top of that calculation for safety/flexibility. Like you, I calculated the pennies that $1,000 could earn in interest and compared it to the dollars I would pay in fees. Easy decision.

    I keep a cash stash at home, part of my emergency preparedness, so that means I don't do frequent ATM withdrawals. Whenever I need to replenish my wallet cash, I use my home cash. That means that my cash withdrawals at the bank to top up my cash stash are infrequent, done at my convenience, and they are for larger amounts. That doesn't add up to frequent monthly transactions at the ATM.

    I use Tangerine and Oaken for higher interest savings accounts. RBC's savings and chequing account interest rates suck big time.

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      • Ivory Sound
      • Ivory_Sound.3
      • 12 days ago
      • Reported - view

      HappyDance some great ideas here, thank you. I'm going to look into perhaps switching to a zero fee with CIBC, and maybe doing my daily banking somewhere that has no fee chequing. 

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      • HappyDance
      • YNABing consistently since 2014
      • HappyDance
      • 10 days ago
      • Reported - view

      Ivory Sound 

      If you are looking for a second, no-fee, chequing account, I can recommend Tangerine. (There's a referral code on my profile page if you're interested.)

      I was going to simplify and just use Tangerine, but I'm leery of the limitations of online banking in problem resolution.  If they don't have physical branches in my city, I'm stuck trying to resolve errors/issues with someone in an office in a different time zone from mine. I'm kind of slow to adopting this kind of change easily. I like knowing I can walk into a bricks-and-mortar bank branch and get some in-your-face attention if I need it.

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    • Superbone
    • YNAB convert since 2008
    • Superbone
    • 12 days ago
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    • Reported - view

    At the very minimum, keep $3000 in the account to avoid the $15 fee. That's a 6% return by avoiding those fees. I don't know the Canadian banking system but in America, that fee would be scandalous to me. 

    Like 3
    • Superbone
    • YNAB convert since 2008
    • Superbone
    • 12 days ago
    • 1
    • Reported - view
      • dakinemaui
      • dakinemaui
      • 12 days ago
      • Reported - view

      Superbone relative to the status quo (as you've done with that 6% figure), Ally would return 7.2%.

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      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 12 days ago
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      dakinemaui Not true. I'm talking APR as in annual. Ally currently has an APY of 1.25%. Hint: You don't get 1.25% every month.

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      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 12 days ago
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      dakinemaui Here's the math:

      15 / 3000 = 0.005

      0.005 * 12 = 0.060 = 6%

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      • dakinemaui
      • dakinemaui
      • 12 days ago
      • Reported - view

      Superbone And my math:

      (15 + 3000*1.2%/12) / 3000 * 12 = 7.2% annual return. 😎

      Hint: Ally doesn't have the $15 monthly fee either. If you get to include it, so do I.

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      • WordTenor
      • I'm the oldest and the wittiest.
      • WordTenor
      • 12 days ago
      • 1
      • Reported - view

      dakinemaui Isn't the $15 balanced out by the $15 charge? If the money is at Ally, there’s a $15 charge at CIBC. 

      Like 1
      • dakinemaui
      • dakinemaui
      • 12 days ago
      • Reported - view

      WordTenor Both checking and savings is moved to Ally, dropping CIBC for being behind the times. Saving the checking fee and adding 1.2% savings.

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      • Ivory Sound
      • Ivory_Sound.3
      • 12 days ago
      • Reported - view

      dakinemaui unfortunately Ally isn't available in Canada

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      • WordTenor
      • I'm the oldest and the wittiest.
      • WordTenor
      • 12 days ago
      • 1
      • Reported - view

      dakinemaui Oh okay. That assumption wasn't the one Superbone was making, I don't think. 

      Like 1
      • dakinemaui
      • dakinemaui
      • 12 days ago
      • 2
      • Reported - view

      Ivory Sound I'm sure there is something available in Canada that would meet your needs.

      To summarize: the simplest option is to shift funds from savings to maintain the minimum balance requirement at CIBC. (You should do this immediately; most banks use the average balance, so it's not too late to avoid this month's fee.) However, you can still do better than that by switching banks, thereby avoiding the fee AND earning a decent interest rate.

      Like 2
  • Have you checked with Chase?  The checking account I have has 0$ fees if you have at least $300 in the savings account.  I also have a business checking account with them for 0$ fees if you have $1500 daily balance.  There's also Azlo (business online bank supported by BBVA) with $0 fees no minimum.

     

    For the savings part, I'm using Barclays and Ally.  Considering AMEX savings but I'm gonna wait to see if they drop interests also.

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      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 12 days ago
      • Reported - view

      Ramon Olivero The OP is in Canada. Here in the US, I'm personally not going to bank with any bank that requires a minimum balance to avoid a fee. I use Charles Schwab checking where there are no min balance fees, it pays a better interest rate than Chase's savings accounts, it refunds all ATM fees, and has no foreign transaction fees. Hard to beat.

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      • dakinemaui
      • dakinemaui
      • 12 days ago
      • 1
      • Reported - view

      Ramon Olivero Chase's interest rates are insulting at 1/100th of 1% -- even worse than the OP's current bank. Interestingly, I actually have a Chase savings account because of a $200 promotion (worked out to about 5% annualized return), but I will be closing it as soon as the promotion terms permit.

      Like 1
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 12 days ago
      • Reported - view

      dakinemaui I had Chase for about a year for the same reasons as you. Got my bonuses and then ditched them at the earliest opportunity. I think I got something like $400 between the checking and savings account.

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    • HappyDance
    • YNABing consistently since 2014
    • HappyDance
    • 12 days ago
    • 3
    • Reported - view
    Superbone said:
    I don't know the Canadian banking system but in America, that fee would be scandalous to me. 

     Ha! If you think our bank rates are scandalous, don't look at our cellphone plans; they're even more shocking due to an oligopoly structure.

    Like 3
  • I do agree with both that Chase interest are insulting.  Chase is only an option to avoid paying $15 per month just for a checking account.  Is not for savings.

    Like 1
  • I'm with CIBC myself with the same account and I plan on switching to Simplii or Tangerine with a credit card.

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