Scotiabank and the Canadian Imperial Bank of Commerce (CIBC) are on a path to bringing big changes in the way they charge fees on personal accounts. The changes occurring at both of these banks are in response to a growing migration by Canadians to online banking, however the bigger issue lies as Canada’s big banks are bracing for competition from low cost rivals, which includes credit unions and of course ING Direct
ING Direct has been offering low rate saving accounts for many years, and just last year they introduced their first chequing account. The chequing account that was introduced was the THRIVE Chequing account; it is a free online chequing account that gives exactly what customers have been asking for.
With that in mind, the changes that will occur at both CIBC and Scotiabank have been noted that only a small portion of their customers will be affected; both seniors and students who receive free banking will continue to do so. As it stands, it is impossible to say exactly how the new fee schedules will affect individual customers, however it does depend entirely on how often you visit a branch, use a bank machine and access your funds.
The most expensive change you will find yourself facing is that if you do not have an account that offers unlimited transactions, then exceeding the number of free transactions result in a higher charge due to the new charges.
What are the new changes?
At CIBC, the changes are the following:
- Some accounts will have a $2/ month charge for paper bankbooks, which are currently free
- Other accounts will carry a return fee of $4.50 for returned cheques; this is an increase from the current $3.50 fee
- You no longer have to deposit at least $100 or the amount overdrawn; instead accounts must now be in a positive balance for at least one full business day every 90 days.
- Any payments and transfers to another CIBC bank account are not considered to be “chargeable” transactions. If you exceed the monthly limit, it will cost you 65 cents per transaction. (this includes pre-authorized payments to CIBC lines of credit and credit cards)
At Scotiabank, the changes are the following:
- To receive mailed statements for your chequing accounts will now cost you $1
- The interest rate for overdraft protection rises to 19% from the current prime plus 5%
- The monthly fee for the Scotia One Account increases to $11.95 from $9.95; the minimum monthly balance to receive free transactions falls down to $3,000 from $3,500
- The monthly charge for the basic banking plan increases to $8.95 from $7. The account balance needed for free transactions falls to $2,000 from $2,500.
- INTERAC email money transfers will drop down to $1 from $1.50; extra charges for branch transactions have been eliminated.
Charging for paper statements is definitely not a bad idea seeing as it has slowly become unnecessary in the majority of lives. With the increase of mobile banking and online banking we are slowly seeing the need for it disappear completely.
Both of these banks will go out of their way to help customers manage their monthly costs, either by changing to a different account plan, or how they currently bank. Scotiabank is offering a 90 day satisfaction guarantee; if a customer is not satisfied with these changes within 90 days, then Scotiabank will help them select an alternative account and refund the difference paid on their existing account plan compared to the new account.
Despite the adjustment in fees, I do feel that it will not make too much of a difference on the lives of customers. I find that more people tend use accounts that offer unlimited transactions, allowing them to be worry free when it comes to excess charges. For those who will be affected by the account changes, they can always speak with their respective bank and discuss their options and find the best account to suit their needs.
What do you think of the bank fee changes?
image source: Betsssssy