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personal finance

How to make bankers yawn: Complain about service fees.

The intense reaction to last week's column on the across-the-board service fee increases that Royal Bank of Canada will introduce June 1 shows a lot of people are cranked about bank fees. But banks are pros at riding out these little storms. They know that today's grievances about bank fees are tomorrow's complaints about cellphone and cable TV bills or the price of gasoline. Ready to toughen up as a bank customer? Then check out the Personal Finance column's 10-point Mad as Hell at My Bank Guide.

1. Negotiating your fees away probably won't work.

It's worth a try to have your fees reduced or waived because you do a ton of business with a bank, but my sense in talking to readers is that banks are saying no a lot. The best you'll likely get is a recommendation to switch to a cheaper monthly plan with fewer features.

2. Credit unions are worth a look.

In general, people are too quick to put a halo on credit unions. Whatever other amenities they might offer, some have account fees that are strikingly similar to what the big banks charge. A few credit unions have grasped the idea that no-fee accounts are a competitive advantage, though. They include Conexus for Saskatchewan residents, Coast Capital Savings in British Columbia and FirstOntario for Ontario residents.

3. Tangerine and President's Choice Financial are worth a look.

In a discussion on my Facebook personal page last week, the comments on these two online banks with no-fee chequing were exceptionally positive. Tangerine is owned by Bank of Nova Scotia and PC Financial is jointly owned by Canadian Imperial Bank of Commerce and the grocery chain Loblaw Cos. Ltd. Yes, some top competitors to the big banks are bank-owned themselves.

4. Your bank thinks you don't mean it when you say you'll switch.

Changing banks is almost as much work as moving. If more people did move their accounts, banks might start to take these threats more seriously.

5. You can have your mortgage at one bank and your chequing elsewhere.

If your mortgage is in midterm, leave it behind while you move your chequing account somewhere else. Banks prefer to have all your business, but they'll have no problem withdrawing mortgage payments from an outside account. Just give your bank a void cheque from your new account and you're good.

6. Banks can take you for granted.

It happens on all kinds of bank products, not just chequing accounts. A mortgage broker recently noted in a blog post that one of his clients was offered a discount of 0.55 of a percentage point off prime on a variable-rate mortgage. The same bank offers the mortgage broker a deal of prime minus 0.65 for his clients.

7. Try keeping a minimum balance in your account.

Some banks waive or reduce service fees if you never go below a certain balance in a month, but the required minimums have been rising in recent years and are now as high as $3,500 to $5,000. With interest rates as low as they are, offsetting fees with a minimum balance can still be an effective use of money you don't need for the time being.

8. Bundling may help.

RBC and CIBC reward clients with monthly fee reductions if they have multiple lines of business with the bank. But, really, wouldn't you rather have low fees with no strings attached?

9. Moving accounts is a pain, but …

Some banks and credit unions offer a service in which you list all the payments withdrawn automatically from your chequing account each month and they migrate them over to your new account. Keep a balance in your old account for at least a few months in case something gets missed.

10. The "I get paid bank dividends so I don't care about service fees" argument is lame.

When people make this argument, it just means they haven't crossed their service-fee pain threshold. It could also mean they haven't yet considered service fees as a tax on their dividends. Finally, a lot of people don't have bank shares and can't afford to buy enough of them to offset their bank charges.

Free from fees

Five options for finding a chequing account with no fees. Click institution name for more information.

InstitutionLocationAccount Name
Credit Unions
Coast Capital SavingsB.C.Free Chequing, Free Debit and More
Conexus Credit UnionSask.FreeStyle No-Fee
FirstOntario Credit UnionOntarioBe Free Chequing Plan
Online banks
President's Choice FinancialNationalNo Fee Bank Account
TangerineNationalTangerine Chequing