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May 06, 2010

Banking Fun

At the end of March I received notice of changes to service fees that applied to my bank account. At first it didn't look too bad, a transaction that incurred a $5 fee would now be free, similarly with a transaction that cost $1. But the fee changes tip from favourable to unfavourable as you progress further into the document. It seems it was ordered that way on purpose. As I digested the information it became clear that transactions I never undertake were the ones being reduced and the ones I encounter regularly month after month were increasing. On the back of a $1.5B quarterly profit at the bank I was a bit upset that they felt the need to increase fees to recover "increased costs". It was only a couple bucks a month, but I hate being charged for something like that when the bank is already making profit off me. So now I was on a quest to rid myself of these new charges.

I started by searching other banks for more suitable accounts. TD bank had the only other account that was comparable to what I currently use. But I searched beyond that and I found that there were other accounts that would be superior to my current account. All the major banks have a similar offering. A chequing account paying 0% interest and offering 10-15 debits/month for ~$4. Similarly, all the banks waive the monthly fee if you maintain a minimum balance for the entire month in the $1000-1500 range. Oddly, most of the banks hide the fact that you can get the fee waived. The two exceptions I found were credit unions, which tend to have a similar account but waive fees if you have a significant amount of money borrowed or invested with them and the Royal Bank which waives the fee if you hold several different accounts with them. My current account at Royal pays ~0% interest and incurs 1 or 2 service fee charges per year. The change to no service charges easily overwhelmed any interest I would forgo.

Staying with Royal seemed like the best choice as I should have no trouble qualifying for their fee rebate since I already hold 6 different accounts with Royal. Reading the finer details, I need an investment account and a Visa account to qualify, great, I have both already. Digging deeper yet, I notice that their definition of investment account isn't very clear and their definition of Visa card is limited to a specific list of cards. So I send off an email (one of the handy features at Royal online banking) and in a short period I got a bit of an answer that vaguely indicated that neither of my two investment accounts qualified and nor did my Visa card.

Ok, fine, so I called in to the investment branch and determined that I could open a new account for a minimum investment of $500 and it would be manageable via online banking and I could hold investments such as ones I held in my other accounts. Great, thats fine lets proceed. Well not so fast, even with my 6 accounts, including two investment accounts, apparently they still need to treat me like a brand new customer. By the way, this type of investment account is one of the only accounts you can't seem to open online at Royal. So the service rep on the phone goes through confirming all my details and then starts into the "investor profile". I ask if they can use the one on my other investment accounts, but no, they have to fill it out again. The rep dutifully reads every question and all the multiple choice answers for the lengthy questionnaire and as we come to the final result, poof, the system suggests I open another one of the non-qualifying investment accounts I already have. The rep subtly suggests I change my last answer and so I do and voila the system complies and lets her open the qualifying account I want. Great, but wait, now they need a bunch of identification to prove it's me again. Oh well, after a long phone call I have that requirement ready to go.

Now to just get a qualifying Visa card. I call up the Royal Visa center and talk to a helpful rep who quickly confirms there really is only one choice of card to get, a no fee gold card with a bunch of extra features. We proceed through the application in short order and I hang up satisfied with another requirement taken care of.

Several days later my new investment account shows up in my online banking. By several weeks later I'm wondering where my new Visa card is. The rep said it would be here in mere days, I didn't quite believe that, so I waited the weeks. Now I was worried so I emailed again and sure enough, after some back and forth I determined that the rep had indicated I wanted to apply for the card on my account, but never put through an application. Some more back and forth to determine what to do now. I was under the impression that my existing Visa account would be changed to the new card, but apparently that can't happen and instead I just need to apply for a new account. So this time I just applied online and a week later, new account is online and another half week later, card in hand.

Finally, now I've got the 2 requirements complete for the "MultiProduct Rebate" with my 8 accounts in tow. I login to my online banking and make the account change. This is one of the smoothest and easiest things to do. Other than the type of account and its features, nothing else changes, not the account number, the bank card, cheques, etc., to the point where I still need to select "Savings" on all ATMs and terminals to access my new chequing account. Hopefully it all works out and the automatic qualification just works and the fee rebate kicks in. I'll add something more if it doesn't. UPDATE: Yep the fee gets charged and immediately credited back. Although if I didn't carry a balance, who knows if this would create an overdraft.

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