02 Jun Tangerine’s no fee chequing account
“100 days till I move into Res!” my child proudly proclaimed a few days ago, excited to be moving onto this next significant phase of his life, a University degree. He is not the only one venturing into new territory, however. Within the next 100 days I will also make a significant transition – allowing him control of his financial decisions. He will have his own student chequing (check/current) account, client id, his own online and mobile access, and be responsible for his spending habits.
We researched the student accounts offered at the major banks. Our needs? Convenience, fees, transaction caps, ABM/ATM, online and mobile access, ease of access to ‘urgent’ funds at short notice. All the banks are competitive, and all offer free chequing until the age of 18. The Canadian Government is also spear-heading an initiative among the major banks to offer low to no cost banking to youth, students and low-income seniors.
Tangerine
Timing is everything, they say. He needs a chequing (check/current) account. And the newly launched Tangerine (previously ING Direct Canada) kicked off their re-branding with an aggressive campaign – advertising a $50 bonus for opening a new chequing account before July 31, 2014, an additional $50 if you are a new client and $50 for depositing your pay cheque to that account. We have long been supporters of ING Direct Canada. Their Children’s Saving Account offers a better interest rate with no minimum balance. Their online tools have encouraged saving and budgeting in our household – with my children competitively saving their baby sitting and lawn cutting earnings, watching eagerly each month to see how much they made in interest (Tangerine accrues interest daily, and posts it monthly on all their accounts, savings or chequing). Tangerine’s target market is the youth segment – their no bricks and mortar, mostly online banking model is nimble and innovative. Their Refer a Friend program rewards happy customers who recommend Tangerine to their friends and family, the 24/7 support is friendly and responsive. Tangerine’s chequing account has a lot to offer a young student:
* There is no fee on the account * You do not need to hold a minimum balance * They pay interest on the balance in your chequing account (yes, starting at a penny!) * They offer mobile banking and the Cheque-In feature allows you to deposit your cheque by photo * Interac transfers are free if you plan ahead, free to receive and free intra-bank. I believe the option for free 2-3 day inter-bank Interac transfers is a great selling point.
Catch them early, keep them loyal
The fight is on for student accounts. A recent article in the Globe and Mail discussed how Canadians tend to be averse to switching banks once they have established a financial relationship. This offers a greater opportunity to the bank that first serves the needs of that student population, as these cash poor students will soon be money earners needing auto loans and mortgages. Banks such as CIBC have established exclusive ABM relationships on some major University campus in a play to encourage students there to bank with them to avoid ABM/ATM charges. Scotia offers unlimited debit transactions, RBC was among the first to encourage students to use mobile banking for added convenience.
Forward planning:
* KYC – Know your Client – these Anti-money laundering requirements means that every new account holder, regardless of where they bank, has to show id and describe the intended use of their account. This old fashioned face-to-face or paper validation process can take time, so plan accordingly. * If your child will not be 18 when they start University, they cannot open accounts online. Work with banks where you have an existing personal relationship – for a little time longer your child still needs your credentials to help set them on their way. * Know the transaction limit on the student account when they turn 18 or 19 (depending on your bank and province). Educate your child on ways to manage ahead so they do not end up exceeding their monthly limit by using their debit card too frequently. * Consider when it would be appropriate to give your child access to a credit card.
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Over to you:
? As a student, which bank did you pick and why? What factored into your choice?
? What would entice you to switch banks? Are you a loyal customer?
? Do you consider fees when making your choice of bank?
Tina McConnell
Posted at 10:32h, 17 AugustHi Karena,
That’s very interesting. Thanks for sharing.
Our youngest is off to university this fall too. She’s only 17 years old. I found that her age has made it exceptionally challenging to hand off her financial decisions. We chose BMO only because we still have to maintain control until she turns 18. Since we bank at BMO, it’s more convenient for us that way. In the bank’s eyes, she is not old enough to have control of the credit line we have arranged for her, or a credit card. Not very convenient when she’s going to be 3 hours away and has to have access to this money without us! We were also unimpressed with our BMO rep’s lack of forthrightness with these limitations. We’d already taken the time to set up the credit line, and when we checked on line yesterday and found it in our names instead of hers, that’s when it came to light. Now this paperwork needs to be done all over again when she turns 18. That’s a customer disservice, in my opinion.
A bank that recognizes these limitations and treats my daughter like a full-fledged client, not a child, would definitely entice her business.
In hindsight, I wish our high schools actually made personal budgeting and finance management a small part of the curriculum (perhaps in grade 10’s “Civics and Careers”). Just my two cents worth.
Enjoy your day! Tina