Switching Banks

A few weeks ago Boomer wrote about having all of your financial eggs in one basket.  This got me to thinking, what would it take for me to switch banks?

I have banked with TD Canada Trust all of my life.  My mom worked there for years and she opened up a children’s savings account for me when I was 7 or 8 years old.

What Would It Take To Switch Banks?

I think there are many advantages to having a relationship with a full service bank, such as negotiating for a free chequing account when renewing your mortgage, or getting a preferred rate on a loan or line of credit.

Related: Why More Banks Are Extending Hours, Opening On Weekends

Lately I’ve received many offers from different financial institutions trying to entice me to open an account with them.  Some offer a free iPod, a $200 sign-up bonus, or a “best in market” GIC.

Typically I ignore these limited time offers, and I think it’s based purely on convenience.  I hear of people who have accounts all over the place, and for me I prefer the convenience of dealing with one financial institution.

Who cares if you can get a half percent better rate on a savings account?  If I am really attracted to a particular offer I will go to my bank and see if they can match it.

So why do banks even try to go after individual accounts?  To me, luring someone from an existing banking relationship to a different bank has to be one of the most difficult tasks in the industry.

Related: Canadian Chequing Account Comparison

Unless you manage to get someone who is opening a chequing account, or discount brokerage account, or a small business account for the first time, it is very unlikely that your limited time offer will actually produce results.  And all the time and money spent trying to get you to switch banks couldn’t possibly be worth the effort if they only land a few individuals who are just chasing incentives and not spending any real money.

The only way that I would consider leaving my existing relationship with TD Canada Trust would be if their customer service was so terrible that I couldn’t get what I needed out of them, or if they weren’t at all competitive with the other big banks when it comes to basic products and services.

And since I can literally do almost everything online with EasyWeb, I don’t even need to speak with a representative until it’s time to negotiate and sign paperwork.

Have you ever taken advantage of a limited time offer to switch banks?  Did they manage to keep your business?

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  1. Katy on October 7, 2010 at 9:24 am

    I haven’t been offered a limited time offer….though an iPad would be nice??

    We were loyal RBC customers. In 2006 RBC changed (I think all Canadian banks changed actually) how bills could be paid at the ATM. Before we could do 6 bills in one transaction/envelope…they changed to 1 bill per transaction. With that change, we started going over the 15 free transactions per month.

    We switched our day to day banking to PC Financial, as there are no fees. Husband was reluctant to make the switch — turns out it wasn’t that difficult for us, as we have no preauthorized payments linked to any of our bank accounts. We kept 1 RBC account — PCF is great for day to day stuff, but sometimes you need a real bank. And we’re using RBC Direct Investing for RRSP/TFSA/investing (I mistakenly bought some RRSP through PCF — am in the slow process of switching them to RBC).

    I admit we got our mortgages before the switch — for the first house, we got it at RBC because we didn’t know any better (figured our bank was good enough). The second house, we used the RBC mortgage as it had the greatest flexibility of any bank (yes, the % was a little higher even with the discount they gave us, but we could do 12 double-ups a year instead of only 4…).

    For us, making the switch was harder mentally than in actual practice. It’s that “loyality” thing that banks count on, to avoid customers making the switch.

    • Echo on October 7, 2010 at 8:36 pm

      Hi Katy, I think you’re right. It sounds a lot harder than it probably is, and the banks know it. I still believe that wanting to switch banks is more about having problems with your existing relationship than it is about jumping at a new offer from a competitor.

  2. Financial Cents on October 7, 2010 at 4:24 pm

    I’ve been tempted to switch, but then there’s the pain in doing it 🙂 To date, we haven’t taken advantage of a limited time offer, but that doesn’t mean we won’t if the pot gets juicy enough.

    PCF treats my wife and I pretty well 🙂

    • Echo on October 7, 2010 at 8:38 pm

      I’d like to give PCF a try. I have their rewards credit card and love loading up on PC Points. Would you ever hold your mortgage with PCF?

  3. sarah on October 10, 2010 at 8:06 pm

    I was with the National Bank and I switched for RBC. I took advantage of a limited time offer and got a free laptop from RBC. I am now very happy with RBC. They took care of everything related to the switch i.e. they closed my account with National Bank.

    • Echo on October 10, 2010 at 10:42 pm

      Hi Sarah, that’s good to hear. We’re you unhappy with National Bank, or did the new laptop just entice you enough to make the switch?

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