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How to save money and earn extra money with banking

Posts Tagged ‘PC Financial’

Using online banks

Posted by martinharford on August 14, 2009

People have been turning to online banks for years as a way save themselves money from banking fees.  It is as well as a way to get a better return on their deposits then they can get from traditional banks.  However, there have been some people who have transitioned from the traditional banks only to later regret it when they discover that some services they took for granted are not available with their new bank.

Questions you may want answered before making the switch likely include:

  • What services can I expect from an online bank?
  • How do online banks save me money?
  • Why doesn’t everyone use online banks?

What services can I expect from an online bank?

In general an online (or discount) bank provides most of the basic services that traditional banks offer as well.  Essentially this means that you can both deposit and borrow money from these banks, how this is performed and the portfolio of services offered varies greatly between online banks.

The first and standard service offered is typically a high interest savings account, the actual interest rate can vary between different banks but you are more or less guaranteed a rate much higher then any traditional bank.

Next are low interest loans which is effectively the counterpart to the savings account.  The reason why these banks can offer these services is because they have a low overhead having effectively no physical presence in the “real” world.

Other services that you might find include chequing accounts, mutual funds, and credit cards.  This may seem like an exhaustive list but for some it may not cover all their needs.

How do online banks save me money?

Unlike your traditional banks, online ones do not have a significant presence in the physical world.  This alone difference allows them to offer services at a substantially discounted rate.

Typically, you will not pay any fees for any services offered by online banks.  With this said there are some cases where they will charge for some services such as non-sufficient funds (NSF) fees or fees for using ATMs outside your network.

The next way is that these banks also offer better interest rates then other banks.   This means you get a higher interest on your deposits and you pay a lower rate on your loans from them.  Again, this is effectively due to the bank passing on their savings on to you for not have any (or many) branches.

Why doesn’t everyone use online banks?

The big one would be because they want to be able to talk to someone face to face.  Although some do have a handful of locations to talk to someone they are typically either not very convenient or not common.  Examples includes PC has locations in Loblaws (and subsidiary) stores, and ING has a couple in a few major cities.

There are also other reason too:

  • perhaps you want to have an add-on trading account
  • maybe you want to travel overseas and use ATMs there
  • you need a chequing account
  • etc

And then there’s just the comfort factor in knowing that there is a physical bank to got to if you wanted.  Although I believe the fear of dealing with companies without ever seeing them is going away I think this probably remains a common factor.

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Posted in ING Direct, Online Banking, Uncategorized | Tagged: , , | 4 Comments »

PC Financial or ING Direct?

Posted by martinharford on July 28, 2009

Admittedly, I am a person who deal with banks almost exclusively over the internet and phone.  Years ago I was a customer of RBC (Royal Bank of Canada) who I effectively choose by default due to it being the only bank in the town I lived in.  Since then I have decided to switch to switch to online banks due mainly to the fact that there are no fees and they have higher Savings & GIC account interest rates.

Initially I chose to go with PC Fincancial, the bank which is linked to the Canadian grocery chain Loblaws (although it has many different names).  And later decided to add ING Direct to my mix.

While selecting a bank I had a fair amount of decision making to like you do always.  Which leads to the typical questions:

  • What is so great about ING Direct?
  • What is so great about PC Financial?
  • Which one is better?

What’s so great about ING Direct?

Savings Rates

While not the absolute top for interest on a savings account, ING Direct typically offers interest rates near the top of all banks in Canada.  Additionally, ING frequently has some promotion going on where you can get a higher interest rate for at least a few months.

Mutual Funds

As I have already stated in a previous post ING’s streetwise mutual funds are a pretty quick and simple choice for anyone starting out in mutual fund investing.  Although I think it’s probably a good choice also for those people who have been doing it a long time too.

Free debit card

You get an ING debit card that you can use to withdraw from your account.  I personally have never used it since I primarily use my PC debit for most transactions.

Some free money

For those people who are new customers and have a promotion code to enter (ie Orange Key)

No fees

As with most online banks they do not charge you for any of their services.

What is so great about PC Financial?

(Almost) Full Service Bank

PC Financial offers all the services of a brick and mortar bank.  You can have a checking account, choose from one of several savings accounts, GICs, a MasterCard, etc.  PC uses CIBC bank machines so you don’t have to pay for ATM fees at any of their machines.

I say almost because I know of people who have switched from PC Financial due to them needing services that are not offered.

Free checks

When you set up a checking account you will be sent a free book of checks.  And you can get additional checks whenever you move (with your new address) or when you run out.

PC Points

When you use your card and most especially you PC MasterCard you get free points which can be redeemed against your purchases at any Loblaws stores or their subsidiaries.  The most significant is the points you get with your MasterCard which comes to the equivalent of 1% cashback.

Savings rates

Like ING, PC Financial has fairly high interest rates, although at the time of writing ING is higher.

Few fees

For most services PC doesn’t charge, such as using your debit card, monthly account fees etc.  However, they do charge for the typical bank extras such as NSF (non sufficient funds) and like, which I would imagine ING does too.

Which one is better?

This is a tough one, if you are in need of a bank and need a checking account (who doesn’t?) then you are likely to choose PC Financial at least for that.

If you are just looking for a safe and easy place to put your savings I would think ING would take top prize.

Posted in ING Direct, Online Banking, Orange Key | Tagged: , | 11 Comments »