I’ve been with BMO since I got overwhelmingly annoyed with TD, but it has now reached the point where it is not worth continuing with them. The banks that blew up the global financial system through their own reckless behaviour are now trying to work their way back to gross profitability by raising their fees. Specifically, BMO is raising the amount you need to lend them, interest free, in order to avoid a monthly banking fee from $1,500 to $2,000. This is probably just the first such escalation. Plus, even with that interest-free loan to them, I would often get fees for performing tasks like moving money between my own accounts online ($0.50 a pop, if you go beyond your monthly ‘transaction’ limit).
So, I am going to ditch BMO and give President’s Choice Financial a try. Basic banking is a simple service for me: just somewhere to receive paycheques into and release rent cheques from. All my investing is done elsewhere (partly at ING Direct, which also has a no-fee approach). The fact that PC Financial offers free cheques, free bill payments, and accounts with no monthly fees is alluring enough even before I consider the interest you could earn on $2,000 annually.
[Update: 8 October 2009] I offered BMO the chance to make a deal and avoid losing a customer. On the phone, they told me that only in-branch managers could do that. When I spoke to one today, she said the only option they had was to switch to a cheaper plan (setting $1000 aside) with only ten transactions per month. In the end, she seemed to agree that switching to PC Financial made the most sense, given that they have no fees and there is interest otherwise to be earned on the money BMO wants you to set aside.
Unfortunately, opening a PC Financial account requires either a driver’s license or a passport. I will therefore need to wait for my renewed passport to arrive, before I can do so.
[Update: 25 November 2009] My PC accounts are now fully up and running, and I cashed out and closed my BMO accounts. Surprisingly, the bank didn’t even ask for ID before handing me the bills and closing my account. They did charge me $8 in pro rated service fees for November – probably one of the more expensive $8 the bank ever collected, since I think they spend a lot more than that to attract a customer.
I used to be with BMO and found them unforgivably incompetent (they sent all my statements to various outdated addresses for over a year, despite me correcting them more than 5 times in person and by phone, and each time they erroneously would assure me the problem was fixed), in addition to charging ridiculously high fees. My experience with Vancity has been immeasurably better, and a friend of mine who works in banking has little good to say about the big Canadian banks. Best of luck with President’s Choice…
“It appears that financial institutions earn money on transactions (say fees on your mother-in-law’s checking account) and lose everything taking risks they don’t understand.”
-Nassim Nicholas Taleb
http://www.edge.org/3rd_culture/taleb08/taleb08_index.html
The Canandian FI’s have been the only banks smart enough to avoid the financial mess and in fact are growing. I suspect your frustration with your banking experiences is all your own doing. Learn to control your finances and pay attention to the rules. It’s that simple.
If there is a late penalty – know how to avoid them. Late means late…don’t be late. Fees for balance transfers? Figure out the program where you don’t get fees. Stop blaming the banks.
If a company is offering a product of service that is unsatisfying, people have every right to complain about it and see whether the company’s competitors are better.
As for Canada’s banks, they got plenty of taxpayer support too. Matt Mullenweg’s ‘SafeBank’ actually sounds pretty good, since it wouldn’t be up to the state to keep it from making stupid risky choices, then bailing them out when those choices go wrong.
Comments from Facebook:
Gabriel M.
If you want branch banking as well, you might want to look at Buduchnist Credit Union here in Ottawa.
Milan Ilnyckyj
Do they have free chequing?
Ren T.
I went to CIBC a few years ago after being ‘hosed’ by Scotia… and now I’ve been done over by them as well. It’s just banks in general. They’re all unfortunately pretty much the same.
Milan Ilnyckyj
The whole draw of the PC bank is that they don’t have fees. As such, it seems unlikely that they will get rid of that policy lightly.
Katrusia B.
I’m a member of Buduchnist Credit Union, where my mom actually works, and I’m pretty happy. Some of the no-fee services: chequing, ATM withdrawal, printing of cheques, bill payments ….
Check out: http://www.buduchnist.com
You might also want to take a look at Citizens Bank of Canada. I’m impressed with their corporate social responsibility, including ethical policy, and might switch to them eventually.
Ren T.
Yeeeah, but depending on what you want to do, PC and the like can be a pain to deal with when it comes to other services… for instance, when you need to get a letter that proves you have support funds to apply for an overseas work visa. Apparently, PC is not considered one of the ‘accepted financial institutions’ for that. My friend had to pull all her money out of there and get a new CIBC account just to get that letter issued.
Milan Ilnyckyj
I don’t expect to be leaving the country any time soon, but it’s good to know about PC’s limitations.
How many Buduchnist branches are in Ottawa? There seems to be at least one CIBC branch downtown, which you can use for free as a PC customer.
Milan Ilnyckyj
I remember when the mainstream banks were offering free netbooks and iPods for new customers. Nowadays, they all just seem to be squeezing existing customers more.
Rachel E.
Milan did you get a UK bank account while you were in Oxford? Wasn’t it awesome how banking fees were illegal there? (I’m also with BMO, and I begrudge that $5.50 they take every month.)
Milan Ilnyckyj
I wasn’t happy with my UK bank either. When I left, I had to give them a forwarding address. The only one I had in Ottawa was my work address, so I gave them that. Unfortunately, I work at a different place now and they will only let you change your address by going to a branch in England in person with ID.
My old office will be getting my statements until the end of time, each one noting that I still have five Pounds in my account.
Milan Ilnyckyj
One very nice thing about banks in the UK is that you can use any ATM for free. They should really require that of banks here, given that they are an oligopoly anyhow.
Rachel E.
Hahaha. Not laughing at you, but laughing at the thought of your statements being forwarded there for the next 50 years.
I was with Lloyd’s TSB, and I actually loved them. They seemed to be the only bank in Scotland that catered towards foreign workers (eastern European workers and Muslim immigrants mainly) and they had at least two major policies that were very convenient for me, because of this. I didn’t even need a UK address to open an account!
Milan Ilnyckyj
Some of the many reasons NatWest annoyed me: http://www.sindark.com/2006/03/14/natwest-a-very-poor-bank-indeed/
Ren T.
I think a statement from Primus saying that I have a $1.50 credit on my account will be going to my old address until the end of time. They wouldn’t send a cheque because it was such a silly small amount, though apparently they had no problem with spending the 50 cents on postage each month. I had long ago cancelled the account.
“In late 2008, the Canadian government injected $75 billion into the Canadian banking system in order to buy up unstable mortgage debts held by the banks in a program called the Insured Mortgage Purchase Program (IMPP). Preparing themselves for worse times ahead, the Canadian banks quietly liquated their soon-to-be-troubled assets in exchange for cold, hard cash from the public purse.
With a nearly total media blackout on the decision and thus no opposition to check this unprecedented transfer of wealth from the public to the rich, the back-room dealings were taken to new levels in early 2009 as Canada’s banks were pushing for more bailout money. The Conservative government – with the silent complicity of their “opponents” in Parliament – passed the 2009 Federal Budget which approved an additional $200 billion in bailout money under a program they called the Extraordinary Financing Framework (EFF). While much adieu was made about the Federal Budget’s estimated 5-year $85 billion deficit, nothing at all was said about the plan to spend $200 billion to bail out the banks. This bailout was not calculated into the deficit projections because, as the budget tells us, in return the government was getting “revenue-bearing assets” from the banks. Well, the question immediately follows: If these assets were bearing revenue, why would the banks by trying to liquidate them in the first place? When these assets begin to fail in the coming months and years, it is now working-class Canadians who are going to be picking up the bill for these toxic liabilities.”
http://basicsnewsletter.blogspot.com/2009/04/canadas-bank-bailout-275-billion-and.html
Goodness, banking does seem even more fraught than in the UK. Admittedly you have to get a non-basic account but all my internet transactions are free (even transfers to my accounts with another bank).
The previous situation with BMO was that I had to either pay about $10 a month or keep $1500 in an interest-free account in exchange for their ‘Plus’ plan.
This plan includes 30 ‘transactions,’ but that number includes things that are basically zero-cost for the bank, such as internal transfers and account history inquiries. Going over the limit now incurs a $0.60 charge per ‘transaction.’ The plan also includes one Interac email money transfer.
In a way, a $1500 interest-free loan to avoid a $10 a month fee sounds like a reasonable deal. After all, $120 a year is akin to 8% interest. Of course, if I can find a bank that offers more services with no fees, I can put the $1500 ($2000 with the recent change) into my retirement savings plan, GICs, or my index tracking mutual fund.
It is also notable that the $1500/$2000 exemption is basically designed to trip people up. If your account ever falls below that level, you need to pay the fee for that month. They are obviously hoping that most people will slip up. They also sabotaged me for two months. The first month, they took the fee for the previous month out of the account where I put the $1500, causing me to have to pay the fee for the next month (even though I topped up the account promptly after the fee was deducted). The next month, they charged me yet again because the account with the $1500 hadn’t been designated as my ‘key’ account, which is different from being the main account. Given that I set up the account explicitly to hold the money to waive the fee, it is unacceptable that they didn’t set it up as the ‘key’ account to begin with.
One slightly tricky thing is that I don’t want to lose my BMO credit card. I haven’t used it for years, since the Citibank Enrich Mastercard offers better perks with no fees, but it is the first card I had and thus tied to my credit rating. Getting rid of it could lower my score.
Hopefully, BMO will let me keep the card while ditching my accounts.
If you want branch banking as well, you might want to look at Buduchnist Credit Union here in Ottawa.
The only Buduchnist branch in Ottawa is rather inconveniently located at 913 Carling Avenue.
By contrast, there PC-linked CIBC locations on Bank St and Sparks St, as well as a ‘pavillion’ in Westboro.
Comments from Facebook:
Gabriel M.
No branches downtown, but buduchnist is part of the exchange ATM network. You can use HSBC, Alterna, and National Bank ATMs without paying fees. Several other banks also participate.
A number of US-based finance blogs are abuzz with rumours about the Bank of Montreal.
Dan Amoss is the Managing Editor of Strategic Investment, a highly respected US newsletter. According to Amoss – who is famous for calling the crash of Lehman Bros, Bear Sterns and other giants before they failed – a major bank is lying about its ability to pay shareholder dividends, has been gaming its books, and is about to crash.
http://www.stockgumshoe.com also offered the following:
“Here’s why Dan thinks this Bank will get slammed. It all boils down to a few very simple things. This bank made risky loans to people who, unfortunately, are losing their jobs quickly. Without jobs, these people won’t be able to pay the bank back. The bank management is using accounting tricks to hide these losses from their shareholders, while some of the same executives even appear to be quietly dumping their own shares at peak prices. But they can only ‘fake’ it for so long. If those loans finally default, it’ll set off a cascading effect of losses… lower earnings… and a draining of cash. With no cash, regulators could force this bank to cut their massive dividend. And this dividend cut would force their share price to plummet — maybe as much as 50-75% in a day — as folks race for the exits.”
Amoss believes BMO is essentially cooking the books with their loan losses and such, and that he seems to think that a collapse is imminent.
“But I’d say this web ‘alert’ is crap. BMO has managed to stay within about 6% of its year-ago performance and still earned a pre-tax return of half a billion in the last reporting period. It (and CIBC, the other bank with large US exposure) has been scoped continuously by the Bank of Canada and the Finance Department guys. The banks have sold bushels of stock in recent months to bolster their capital positions and, as you know, received tens of billions in cash for swapping CMHC-insured mortgages with the feds.
The odds of BMO crumbling are akin to Stephen Harper asking me over for a beer. Just ain’t gonna happen in this lifetime.“
Isn’t there a drivers license equivalent for non drivers in Ontario? In BC, it would be a BCID.
For some reason, they consider the Ontario health card a ‘secondary’ piece of ID. This is a bit odd, given how I have used that and my government photo ID to do all kinds of things here.
Hopefully, I will get my replacement passport soon.
According to this thread, there is no Ontario equivalent of the BC ID.
There is a card “solely for the purpose of purchasing beverage alcohol in Ontario,” but I doubt the bank will find it acceptable.
You could take the test and get a learners license. You’d only have to know how to drive in theory to have that piece of ID.
Given that I already mailed my passport application (and need a passport, unlike a driver’s license), it seems most sensible to wait for that document.
I use PC banking and love it. No fees and free chequing. Plus you get free groceries for using their credit card. I use the card to pay for everything, always pay it off the same month, and get $20-$30 a month off my grocs at Hartman’s. Can’t beat it.
My Citi Mastercard has no fees and gives 1% cash back, but the PC card might work out to be a better deal, since I shop at Hartman’s all the time.
Too bad they don’t have a PC bank machine there.
I am still waiting for PC Financial to fully proces my application. I went in person to show ID a week ago, but the documents still haven’t been processed.
If anyone else is switching to PC, make sure you do not do it online. If you go in with ID in person, you can do all this in 15 minutes, instead of many weeks.
I agree BMO is the worst bank in Canada. They have cost myself and my family nothing but money and frustration. Incorrect information given out by tellers to losing thousands from BMO getting hacked, and they do not cover cost incurred to customer from hackers.
Even after writing the President of the Bank, we did not get a response.
.. and we did follow the rules.
BMO BITES.