How Do You Choose Your Bank?

Like most people, my first bank account was held at the financial institution my parents dealt with.  Once I was out on my own I just opened an account at a bank close to where I worked.  There wasn’t much choice – a plain chequing account (no fees at that time) and a savings account with a standard interest rate.

When I started working for the TD Bank, the choice was simple.  I had to have an account with them for my pay to be deposited.  Over the years I stuck with them for loans, credit cards, line of credits and investments because I knew the products and sometimes got preferred rates and waived fees for being on staff.  Why would I compare elsewhere?

Ironically, now that I no longer work there, they drive me crazy.  When they do things like putting a 10-day hold on a local bank draft I’m depositing I feel like they think I’m about to rip them off.  Can’t they see I’ve been a long-term customer who’s never had a problem – ever?  I’m always threatening to take my business elsewhere.

Choosing a bank these days is more complicated than it used to be because more options and services are now available.  Many banks have their own unique account features that differ widely.

Alternatives to traditional banks

Self-Serve Banking:  ING Direct and PC Financial are popular options, especially if you don’t need to physically go into a bank.  Advantages include no-fee chequing accounts, higher savings and GIC interest rates, and lower interest rates on loans and mortgages.  Most financial products are available.

Credit Unions:  Credit Unions are member-owned financial co-operatives.  They may be community oriented, or serve the staff of large employers (e.g. Firefighters Credit Union).  They offer competitive products and the opportunity for profit sharing.  Surveys of customers have consistently shown a significantly higher satisfaction rate with the quality of customer service.

It’s easier to evaluate all the options if you first determine your needs and then compare the costs at different financial institutions.

Ask yourself these questions

  • How much do you keep in your chequing account in a normal month?
  • How much do you have in savings?
  • Do you frequently use ATMs?  Are they conveniently located?
  • If you bank by telephone or online, is it user friendly?
  • Is having a human bank teller important to you?
  • Does your employer have a preferred banking partner that offers better rates or extra service?
  • Are minimum monthly balances required?
  • Are lower fees offered if you have multiple accounts?
  • Is a no-frills chequing account available?
  • What is the interest rate on savings accounts?
  • Can you speak to a rep 24/7?
  • Are investment and estate planning services available?
  • Do you always need to set up an appointment to talk to a CSR, or will someone see you as a walk-in?

Conduct an on-site evaluation if required.

  • Are their long teller lines?
  • Do you see an ample number of customer service reps?
  • Do the employees look approachable and friendly?

A lot of people just “fall into” their banking relationships without giving it much thought.  The bank is conveniently located, or they gave a good interest rate on a new mortgage.

There are many financial institutions to choose from, so shop around.  Remember you are the customer and it’s most important for you to get what you want out of a banking relationship.  If at any point you’re unhappy, say something.  Banks want to keep their customers satisfied and are often willing to waive charges, reduce fees or make other compensation to keep your business.

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  1. JT on March 22, 2012 at 6:49 am

    Like I pick my stocks – dartboard!

    No, kidding. Now that interest rates are in the toilet, it’s all about convenience. Even on $10-20,000, it really doesn’t matter whether you earn .5% per year, or .55% per year.

  2. krantcents on March 22, 2012 at 8:52 am

    All good points. I usually ask my friends if they like their bank and start there. In most cases, I want the bank to be convenient to work or home.

  3. hughes1958 on March 22, 2012 at 9:00 am

    Seriously, TD is putting 10 day holds on your deposits? You don’t need to make threats, you need to ask questions. Banks don’t put holds on the deposits of good customers. You’re “flagged” somehow. Find out what the problem/error is & get it fixed!

    • Boomer on March 22, 2012 at 4:44 pm

      @hughes1958: I know my account isn’t flagged. It’s mainly and matter of inexperience and some incompetence. For example, when I opened my TFSA the CSR was unable to answer my questions regarding fees and when I wanted to designate a successor holder she didn’t know what that was. I only have problems when I actually go into the branch, which thankfully is not very often.
      I usually do most of my ranting to my husband who stopped listening to me a long time ago.

      • hughes1958 on March 22, 2012 at 10:14 pm

        I know what you mean about the inexperience & incompetence (although I have not heard of the term “successor holder” either). I also bank with TD (by way of Canada Trust who I have been with for more than 30 years). Despite various problems and errors over the years, I have never had a hold put on my money & heaven help them if they went there. Unless it’s some extraordinary circumstance (like……you’re depositing a million dollars!), it sounds like your account has been set up this way & they should be able to tell you why or fix it.

  4. Steve @ Grocery Alerts on March 22, 2012 at 10:32 am

    My first bank was CIBC – I still remember my Blue Jays wallet.

    I have been with PC Financial for almost 13 years now.

    Does anyone know if Loblaws and CIBC co-own PC Financial?

    I know that PC Financial is a division of Amicus bank and has access to the CIBC ATM banking network but I do not know the relationship.

    • Boomer on March 22, 2012 at 4:51 pm

      @Steve: According to my brochure Loblaws owns PC Financial and CIBC provides the services and are a licensee of PC trademarks.

  5. christy on March 22, 2012 at 5:02 pm

    Gah, you should add “hold waits” to your list of questions. I had only heard great things about ING, but now I am amazed/apalled by lengthy hold waits on my transfers. That is driving me crazy and not worth the extra bit of interest for me!

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