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Scotiabank Ultimate Package review: is it worth it?

Scotiabank branch

Scotiabank recently launched its Ultimate Package chequing account, with a whopping $30.95 monthly fee (or $371.40 per year). This fee is waived if you keep at least a $5,000 minimum daily closing balance in the chequing account, or a combined balance of $30,000 between the chequing account and the Scotiabank MomentumPLUS Savings Account. Instead of comparing the value of the account against the monthly fee (which the bank could have set at any amount), let’s presume that you have the cash to meet one of the minimum account balances to waive this monthly fee. We can easily price out whether it’s worth it over the long-term considering forgone interest.

What forgone interest? Well, the Scotiabank Ultimate Package pays 0.00% interest, and if you’re going to keep so much money in your chequing account, you certainly won’t be earning up to 2.80% (at Motive Financial) in one of the bank accounts in our comparison chart. Even if you earned 2.30% (currently offered at EQ Bank; 75% of financial institutions on our chart offer 2.30% or more), let’s do a quick calculation: to be safe, you keep $1,000 more than the $5,000 minimum balance in the Scotiabank Ultimate Package account for a total of $6,000. (If your end-of-day balance dips below the minimum balance even once, you have to pay that month’s $30.95 fee.) That earns $0 at Scotiabank, but $138 at EQ Bank. If you instead put $31,000 in the Scotiabank MomentumPLUS Savings Account, you’ll earn $341 per year at a base interest rate of 1.10%, but $730 at EQ Bank, for a forgone interest total of at least $389 (since this scenario puts nothing in the chequing account).

Are you going to get between $138 and $389 of value per year from the Scotiabank Ultimate Package? Let’s look at the features it provides:

  • Unlimited debit transactions and unlimited Interac e-Transfer transactions: Many other financial institutions offer this, including Alterna Bank, Motive Financial, and Simplii Financial, which have free chequing accounts with no minimum balances. As well, Scotiabank’s own Basic Plus Bank Account, which has a monthly fee of $10.95 or $0 if you carry a minimum daily closing balance of $3,000, offers 25 free debit transactions and 10 free Interac e-Transfers per month.
  • Up to $139 annual fee waiver each year on select credit cards: The applicable credit cards and their annual fees are Scotiabank Gold American Express ($120), Scotiabank Passport Visa Infinite ($139), Scotia Momentum Visa Infinite ($120 and currently first year free), and Scotiabank Value Visa ($29). Those are some decent credit cards, with the first 2 waiving the foreign currency exchange fee of 2.50% (and the first 3 currently available on our cash back site). Keep in mind, however, that only with 1 of those cards will you get the full $139 annual fee rebate value.
  • 0.10% bonus on the MomentumPLUS Savings Account: The regular interest rate in this savings account is only 1.10%, so you will earn higher interest by putting your savings dollars in a different financial institution, although you would lose the convenience of easier cash flow management by keeping both chequing and savings accounts at Scotiabank.
  • Unlimited free Global non-Scotiabank ABM withdrawals: This can be $5 per withdrawal, although note that the foreign bank or ABM/ATM operator might still charge you an additional fee.
  • No monthly Overdraft Protection fee: This is $5 when used, although note that Scotiabank-owned Tangerine Bank currently offers this for free if you pay off an overdraft balance on the same day.
  • “Ultimate” (higher) rates on select GICs: That’s currently 2- and 3-year GICs (2.25% and 2.26%); but you can most definitely get higher GIC rates elsewhere!
  • 10 free equity trades at Scotia iTRADE in your first year (approximately $100 value) and 5 free equity trades every year after: This is good if you want to use Scotia iTRADE or a similar big bank investment account. There are, however, alternatives that offer commission-free trades.
  • Free personalized cheques and drafts: You get 1 book of 100 cheques per year. Tangerine Bank gives you a free first cheque book, then $20 for each subsequent book of 50 cheques (going up to $50 in January 2020). The cost of bank drafts can add up. At Motive Financial, bank drafts cost $7.50 each.
  • $55 safety deposit box annual fee waiver: If you need a safety deposit box, you definitely cannot get one at a branchless bank.
  • No monthly account fee on a Scotia U.S. Dollar Daily Interest Account: The monthly fee on such an account is $1 per month, or $12 per year. Note, however, that Tangerine Bank offers a free US dollar account that currently offers 0.45% interest versus 0.15% with Scotiabank.

The features when taken as a whole can be compelling, but you must really take advantage of many of them in order to come out ahead. For example, if you want to carry the $139 annual fee Scotiabank Passport Visa Infinite, make several global ABM/ATM withdrawals in a year (3 x $5 savings), use overdraft protection frequently (3 x $5 savings), use Scotia iTRADE ($50 savings), need bank drafts (3 x $7.50 savings), go through many cheques in a year ($50 savings), and need a safety deposit box ($55 savings), that’s a total of $324 in savings plus whatever value you put on a big bank with lots of physical branches. You could also take a short-term view and take advantage of the up to $350 Scotiabank Ultimate Package sign-up bonus (if you meet certain conditions and open an account by the end of 2019), and the Scotiabank MomentumPLUS Savings Account promotion if you make a deposit before November 30, 2019.

If you’re only in it for the free Interac e-Transfers, write a few cheques in a year, and need bank drafts and international ATM access once in a blue moon, you have plenty of other cheaper options with better savings account and GIC interest rates. Be sure to do your homework and compare also against the BMO and TD “premium” chequing accounts with high monthly fees that can be waived with a minimum monthly balance.

Savers Roundup September 2019: a 3.30% savings account; MAXA Financial is the new TFSA leader; avoid PayPal forex fees

Interface to pay bills

Back to school means September bank account promotions

Big banks highlight the latest promotions we are tracking, as financial institutions compete for your savings account dollars this fall:

For BC residents only, Coast Capital Savings is offering $500 to new members who open a chequing account before October 6, 2019 and meet certain conditions, such as switching payroll direct deposits to them.

At motusbank, Alterna Bank, and Oaken Financial, rates are dropping

motusbank has now decreased its regular savings account interest rate from 2.25% to 2.10% and its TFSA from 2.50% to 2.35%. These are its first main account rate changes since motusbank’s end of March launch. Implicity Financial also decreased both its regular savings account and TFSA interest rates from 2.40% to 2.30%.

This leaves MAXA Financial as the highest TFSA rate on our chart at 2.45%. Motive Financial tops the regular savings account rate at 2.80%, which it has kept for almost 1 year. Our forum members have just started to discuss B2B Bank, a subsidiary of Laurentian Bank, which has an even higher regular savings account interest rate of 3.30%.

Alterna Bank recently decreased its GIC rates by as much as 0.80% and made a small decrease to its TFSA interest rate from 2.35% to 2.30%. Its regular savings account interest rate remains at 2.30%.

Oaken Financial has announced that its GIC rates are going to drop on Friday, September 20, which would remove the last remaining 3.00% rate on our GIC chart.

Is the concept of a separate chequing and savings account obsolete?

It takes work to manage cash flows between chequing and savings account, not to mention forgone interest earnings. Our latest article explores a few ways to make this easier, from EQ Bank’s single hybrid account, to automated coverdraft and overdraft features at Alterna Bank.

Other savings: USD, investment accounts, line of credit, and PayPal

Ideal Savings has a new USD savings account with a 1.00% interest rate on balances over $5000. Note that it pays little to no interest if your balance is $5000 or less.

If you have an investment account, you can look to Investment Savings Accounts for both your CAD and USD cash balances. A recent discussion also explores whether it’s worth considering savings account ETFs.

If you have a Tangerine account and are in the market for a line of credit, look in your online account to see whether you have received a 90-day 0.00% Line of Credit offer.

Lastly, whether you have a credit card that waives the foreign currency exchange transaction fee or not, make sure that you disable PayPal’s currency conversion feature when making USD and other foreign currency purchases! PayPal likely charges a higher fee than your credit card.

Beyond the rate: avoiding NSF charges and managing chequing and savings account cash flow

Reflection of a toonie

Most chequing accounts pay little to no interest. Savings accounts can pay much higher interest, but don’t have the features that chequing accounts do. How do you maximize the features and convenience in your day-to-day banking without sacrificing earned interest?

You can choose a savings account that pays the highest interest possible, but to get the most out of your hard-earned money, you need to manage your both accounts: specifically, the cash flow between the chequing and savings accounts.

Who needs a chequing account?

One approach is to forgo a chequing account. Is having separate chequing and savings accounts an antiquated concept that banks perpetuate simply because they can? At EQ Bank, there is no chequing account — only a savings account (the EQ Bank Savings Plus Account) that provides some features more traditionally associated with chequing accounts, such as free bill payments and unlimited Interac e-Transfers®. You can also do pre-authorized debits and make external transfers to other bank accounts. However, EQ Bank does not offer a debit card, ATM/ABM access, or cheques, at least not yet.

Free internal transfers

At Motive Financial, its Cha Cha Chequing Account also offers free and unlimited Interac e-Transfers but is a more fully-featured chequing account. At Motive Financial and most other financial institutions, you can make unlimited and often instant transfers between chequing and savings accounts at the same bank. That way you can keep as much money as possible in your savings account, and only move cash to the chequing account when you need to, for example, write a cheque. But it can be a hassle to do these transfers even if it’s just a few more clicks. And you can get hit with NSF charges if you don’t keep enough money in your chequing account and forget about an outstanding, uncashed cheque. This requires careful management. While Motive Financial charges no chequing account monthly fee, there are other financial institutions that make you keep a minimum balance in your chequing account in order to waive the monthly or transaction fees — requiring even more management and lost interest.

Overdraft and coverdraft

If you don’t want to manage the cash flow between your chequing and savings accounts, here are 2 ways to make sure you’re automatically covered. The first is overdraft protection, which is essentially a line of credit attached to your chequing account. If you make a debit or withdrawal transaction from your chequing account that is more than the cash in the account, the bank automatically loans you the difference. Overdraft protection can have a monthly fee on top of the interest it charges you until you pay back the loan. Overdraft protection is offered at Alterna Bank, but Alterna also has something slightly different that you can set up with a 1-time phone call: coverdraft protection. Coverdraft protection is not a loan, but uses the savings account to back the chequing account. If you make a debit or withdrawal transaction from your chequing account that is more than the cash in the account, it will automatically “sweep” the difference from your savings account (presuming that you have enough cash in the savings account), preventing you from being hit with an NSF charge.

Financial institution features can make it easier for you to manage chequing account cash flow, whether that’s doing away with a chequing account altogether; offering a convenient no-fee chequing account with free and unlimited transfers to and from a savings account; or preventing you from getting hit with accidental NSF charges. This can be more important and potentially save you more money than an account with a higher rate!

Got more tips to share? Join the discussion about paying bills from a savings account that prompted this article!

Savers Roundup August 2019: when promotional rates change mid-way; first no-forex fee Amex; debt forgiven at Chase Canada

Summer interest rate leaders

Since a couple of interest rate drops at AcceleRate Financial and Achieva Financial last month, there have been no changes on our savings account comparison chart. The savings account interest rate leader Motive Financial has kept its rate at 2.80% since November 2018, and the TFSA leader motusbank has kept its rate at 2.50% since it launched in March of this year.

There have been a handful of GIC rate decreases on our GIC comparison chart in August, including at Tangerine Bank, which has secured its place at the bottom with Simplii Financial after starting to become competitive at the end of last year. Hubert Financial, Oaken Financial, and Peoples Trust offer the current top 3 rates for 1-year (up to 2.60%) through 5-year rates (up to 3.10%). For the first time in a while, it’s slim pickings for promotional GIC rates; the only one of note is a 15-month 3.00% GIC from Peoples Trust.

What happens when the base rate in a promotion drops?

Most savings account promotion terms are worded such that you get a fixed promotional rate that is added on top of a variable base rate. Recently, the Manulife Bank Advantage Savings Account base rate dropped from 1.50% to 1.25%, which meant that if you signed up for the recent 3.25% promotional rate, that rate would have also dropped by 0.25%. Has this happened to you before, and did you know the total promotional rate was subject to change?

Our promotions page lists a few similar such offers whose base rates have not yet changed (fingers crossed), but are by no means guaranteed. This includes 3.00% for 150 days on new Meridian Credit Union Good to Grow High Interest Savings Accounts opened by August 25, 2019, and the latest round of targeted Tangerine existing client offers: 2.75% on new deposits (to regular savings, TFSA, RSP, and USD accounts) between August 7, 2019 and January 31, 2020.

The first Canadian Amex card with no forex fee?

On August 1, the long-anticipated changes to the Scotiabank Gold American Express credit card came into effect, for better or for worse. It now has a higher annual fee than before ($120 instead of $99) but no foreign currency exchange fee and 5 Scotia Rewards points per dollar spent at grocery stores, restaurants, and entertainment. This is the first Canadian American Express credit card to waive the 2.50% foreign currency exchange transaction fee — at least in recent memory — and Canadians who make a meaningful amount of purchases in foreign currencies now have quite a few credit card options in the space. If the USA is your primary foreign spending destination and you have lots of US dollars on hand, you can also consider a US-dollar credit card to avoid the currency conversion altogether.

Plenty of summer reading and cash back offers

Savers Roundup July 2019: rate decreases at Manitoba credit unions; short-term promos; online interface screenshots

Steady or dropping rates

Central bank interest rate news in Canada and the US in July have been about keeping rates steady or perhaps even decreasing them (in the case of the US). Over at Achieva Financial and AcceleRate Financial, they’ve both decreased their regular savings and TFSA interest rates from 2.40% to 2.30%.

On our comparison chart, MAXA Financial remains at 2.45%, while Implicity Financial and Outlook Financial remain at 2.40%, at least for now. The Manitoba credit unions especially have a history of keeping their rates roughly in sync. Will more drops follow?

The regular savings account interest rate leader is still Motive Financial at 2.80%, and the TFSA leader is motusbank at 2.50%.

How to get up to 3.00% in the short term

As per our GIC chart, you’ll need to lock your money in for at least 4 years if you want to get at least a 3.00% annual return outside of a promotion.

motusbank’s 18-month GIC promo for non-registered accounts has decreased from 3.00% to 2.75%, or from 3.10% to 2.85% for the TFSA and RRSP versions.

However, EQ Bank has a current promotion for a 3.00% 3-month GIC. At National Bank, you can get 2.75% in a High Interest Savings Account until September 5, 2019, and if you’re a Simplii Financial customer, you might have received a targeted promo of between 2.50% to 3.00% on new deposits between July 1 and October 31, 2019. Check our promotions page for several more new deposit and new account promotions.

Financial institution online interface screenshots

New on HighInterestSavings.ca are image galleries of financial institution online interface screenshots! Beyond rates, fees, and general features, a key consideration for many people when choosing a new bank or credit union is the usability of its online interface, including account balance listings, sending Interac eTransfers, and more. We’ve started with website screenshots of EQ Bank, Hubert Financial, Motive Financial, and Tangerine Bank. Are there any particular screens that you would like to see? Or are you able to contribute some screenshots from the financial institutions you bank with? Let us know!

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