Financial Eggs In One Basket?

Should you keep all your accounts, loans and investments at one financial institution, or spread them around?  When I worked for a bank, when I had a new customer referral – for a mortgage, say – the goal was to transfer in all of their financial accounts.  The reasoning behind this was that it would be more difficult to leave the bank once everything was set in place, and it’s true.

Whenever I have a complaint about my service and I vow to move all my accounts elsewhere, I think of the pain it will be to research a new bank, open and transfer all my accounts, perhaps they will hold all my deposits until they get to know me, I’ll have to learn a whole new system, aiy, aiy aiy!  I guess I’ll stay put.

So, we know the bank is trying to keep you as a customer indefinitely, but what are the advantages to you to have all your finances in one place?

  1. When you go on-line, all your accounts are there, on one page, giving you a quick overview of all your balances.
  2. Links to investments and loans show holdings and recent activity and you can download them to accounting software like QuickBooks or Microsoft Money easily.
  3. Transferring funds between accounts is quick and simple.
  4. Past banking statements can be accessed on-line for the past two years or more.
  5. By consolidating similar accounts, you can often save money on fees.  For example, a direct trading RRSP account charges an annual fee of $100 for balances under $25,000 and trading fees are reduced for balances over $100,000.  So, if you’re paying fees on spread out small accounts, this could work for you.
  6. You may get to know a financial advisor at your branch who knows you well enough to recommend new products that will fit your financial plan.
  7. It can be a good bargaining tool to get a better interest rate – e.g. higher for GICs and lower for loans and mortgages – or other perks.

I personally keep most of my accounts with one financial institution with a couple of exceptions where I get a better deal elsewhere.  But, I’m always open to offers and negotiation.

Do you have accounts at multiple banks, or are you loyal to just one?

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  1. Canadian Couch Potato on September 4, 2010 at 7:00 pm

    I have almost everything with one bank, too, simply for convenience. As you point out, I’ve found that when you’re a regular client they do tend to treat you well. We got an excellent rate on your mortgage, they’ve cleared big cheques for me with no holds, they treated us well when one of my kids had her bank card compromised, etc.

    • Boomer on September 5, 2010 at 1:09 pm

      You’re right. It makes it a lot easier if there’s a problem to contact someone who knows you and can deal with the situation quickly.

  2. Dd on September 6, 2010 at 3:05 am

    I use two banks right now. One bank is for all my general banking needs and the other is used for savings. I put money in savings when I have no where else to put it and I picked a bank with a strong track record for having the highest interest rate.

    Unfortunately I do not own a home and thus I do not have a mortgage–I am sure I will probably end up with another account sooner or later.

    Thanks for the post 🙂

    • Boomer on September 6, 2010 at 1:06 pm

      Dd, when you’re ready to add another account be sure to check around for good rates and/or perks that can save you money initially, then build a track record for the future.

      • Dd on September 6, 2010 at 1:45 pm

        Oh I will–probably only after I come by your blog for updates 😀

      • Dd on September 8, 2010 at 2:26 pm

        Just another update on my banking system–I posted it on my site–I wouldn’t mind if you took a look and gave any suggestions. I always thought about working for banks–but I imagine it takes a long time to work your way up.

        • Boomer on September 12, 2010 at 1:24 pm

          Various banks always have a “deal of the month” or a time limited offer and I wouldn’t waste my time bouncing around to get these temporary deals. Banks are very competitive and come up with all kinds of products to get your business. I would only switch if it worked within my financial plan. I started working at the bank as a secretary and worked my way up and took a lot of courses. A faster way is to get a BComm or other business degree.

  3. nancy (aka moneycoach) on September 6, 2010 at 8:14 pm

    I deal with multiple institutions – whoever gives me the best deal, in general.
    Nobody beat the offer I got from one bank for my mortgage so obviously I wasn’t going to spend needless interest, so I gave them the business.
    I have my spending set up at ING Direct. They are usually nearly the top in providing interest, and also, I want my savings tucked away and not tempting me in my usual bank account!
    Then I use PC for my day-to-day banking because they are free.
    Any my visa – you guessed it – at yet *another* bank because they had a low-interest deal a few years ago and I’m still getting a fantastic rate from them.

  4. Echo on September 6, 2010 at 8:32 pm

    I currently deal with one financial institution. Used to be two, my old job had employer matching RRSP contributions, but I had to hold my RRSP at their preferred bank.

    Once I switched jobs last summer, I closed that account and transfered money to my current FI and opened up a discount brokerage account.

    I do plan to open a PC Financial savings account in the next few months.

  5. Raluca Stone on May 29, 2011 at 9:53 pm

    One advantage of keeping all you transaction in one institution is that you will no longer need to spend a lot of time, money and even effort in going to every institution that you have chosen.

  6. Nick on April 1, 2012 at 8:41 am

    Depending on how much money you have, you can definitely get a lot of fees waived, even the chequing fees at the major banks. I used to have banking with one FI and investments with an online broker. Last week I walked into a big bank, sat down and said ” I hate fees and I hate minimum balances. If I move everything to you, what can you do for me?”

    Now I have everything in one place and I don’t pay any monthly fees or anything, so my advice is to negotiate your way with a big bank and you might be surprised.

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