Are you still using the same bank you started with as a teenager, the one right around the corner from where you grew up? Do you know how much your bank charges for withdrawal fees or its minimum monthly balance requirements? Have you ever met your banker?
With the economy and labour market struggling, it's more important than ever for people to give their business to the right financial institution. But while Canadians wouldn't think twice about shopping around for their groceries, they are complacent when it comes to selecting their banks.
Banking industry consultant David McVay says people tend to choose their bank because it is located close to them, their family members bank there, or their employer deposits their payroll there. "It is generally not a pro-active decision, and it should be," he said.
Alan Lysaght, a business consultant and co-author of the "ABCs of Making Money," says that as with any other big financial decision, Canadians shouldn't hesitate to investigate and look around for the best deal possible. "Go to the banks and see who offers the cheapest rate."
The first step, Mr. Lysaght says, is to identify your own banking patterns For instance, how big a balance do you normally keep in your account? This is important because some financial institutions will not charge you a monthly fee if you keep a certain, often sizeable, amount of money in your account. Fall below that amount and you could find yourself paying fees.
Another key banking habit to establish is how you access your money each month, and how frequently. "How many times a month will you go to an automated banking machine or use a debit card or write a cheque?" Mr. Lysaght asks. If you are frequent debit card user, you need a package that gives you an unlimited amount or you could be paying high monthly fees.
"Once you know what you need, go and look at all of the different options out there," he said, including ING, PC Financial and the credit unions.
Mr. McVay agrees that although Canada's biggest banks are convenient, they tend to stay in a fairly close range in terms of the products and prices they offer. "There isn't a material difference among the Big Five banks. The differences are not worth the hassles of switching."
He believes the most important thing to look for when choosing a bank is a solid human connection. "You should seek out and maintain a personal relationship with the bank, as they should with you," he said. "It can be anyone from a teller to the president."
Some people choose their bank because someone they know and trust works there, which they feel will benefit them. For people who do not know someone at a bank, Mr. McVay suggests asking around the neighbourhood to see who people like to deal with. Go meet that person and if you like them, build a relationship with them.
Touch base with that banker once or twice a year to see if the bank has any new packages that are a better fit and can save you money, Mr. McVay suggests. "That is where the personal touch comes in. Without that, you are just a number."
Roma Luciw is a writer and web editor of the Globeinvestor.com personal finance site. Please send any comments and story ideas to firstname.lastname@example.org.