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BMO Bank of Montreal 2.5% Savings Builder Account through June 30, 2015
March 30, 2015
4:44 pm
Ratesearcher
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I'm new to here, but someone should start a new thread. BMO Bank of Montreal, as of March 30th, 2015, at least, is offering 2.5 % interest with its Savings Builder Account (regular + bonus interest). Read the fine print closely. You have to add $200 each month net to your account (after interest) to be eligible for the 2.5% rate. As of March 30th, from what I can tell, it is the best savings account option out there. $250,000 limit to be eligible for the rate.

March 30, 2015
5:46 pm
james1900
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The point is: you have to open a new type of account: Savings Builder Account. After June 30, I guess many will abandon it.

March 31, 2015
7:44 am
kanaka
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Ratesearcher said

I'm new to here, but someone should start a new thread. BMO Bank of Montreal, as of March 30th, 2015, at least, is offering 2.5 % interest with its Savings Builder Account (regular + bonus interest). Read the fine print closely. You have to add $200 each month net to your account (after interest) to be eligible for the 2.5% rate. As of March 30th, from what I can tell, it is the best savings account option out there. $250,000 limit to be eligible for the rate.

And what is the monthly fee for your BMO accounts? And what will the new rate be? Although I have never paid any fees to BMO they are ok for day to day banking but not considered, in my mind, a place to invest.

March 31, 2015
8:46 am
2of3aintbad
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kanaka said

And what is the monthly fee for your BMO accounts? And what will the new rate be? Although I have never paid any fees to BMO they are ok for day to day banking but not considered, in my mind, a place to invest.

Nobody said anything about investing. But if you have cash and have max'ed your TFSA, but need the money soon, why not?

March 31, 2015
8:50 am
Ratesearcher
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Hard to tell about monthly fees from their website with the Savings Builder Account, but with other accounts, the fee is waived if you maintain a minimum balance of over several thousand dollars. So, for those with a large chunk of cash that requires liquidity, this is an opportunity for 3 months at 2.5%... leaps and bounds better than other big banks, and also far better than anything a credit union or online bank is advertising as of March 31. If anyone else sees any other catches, please point them out.

March 31, 2015
9:44 am
Bill
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I think if you don't do any other business with BMO it's a bit unwieldy to fund and withdraw from the account, i.e. can't transfer online so have to go to branch, no?

March 31, 2015
9:45 am
Loonie
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Thanks for letting us know, Ratesearcher.

Here are the details from the accompanying pdf. It's a bit garbled because it contains all the stuff in the margins of the page, but it's all here, I think. Highlighting is mine.

"SAVE.
EARN.
REPEAT.
Disclosures for the Savings Builder Account
With a Savings Builder Account you are awarded an additional rate of
interest in a given month simply by increasing your account balance by
$200.00 or more.
Bank Fees
The BMO Savings Builder Account is not eligible to be part of an Everyday
Bank Plan. Pay-per-use fees apply where applicable.
There are no fees charged to deposit or transfer funds into your BMO
Savings Builder Account, to review your account history online or to
receive an eStatement.
You are allowed one transfer per month from your BMO Savings Builder
Account to another BMO bank account regardless of how you complete
the transfer: at a BMO branch, ATM, online, or by telephone. Each
additional transfer is $5.00.
There is a $5.00 fee for each cash withdrawal at a BMO branch or ATM and
for each pre-authorized payment debited from your account.
There is a charge of $0.85 for an account history at an ATM and through
Telephone Banking; a $5.00 fee applies at a BMO Branch or with a
customer contact agent.

A charge of $2.00 will apply each month you receive a paper statement.
Definitions:
Account means Savings Builder Account
Base Interest means the rate of interest you will earn on your entire
Account balance regardless of whether you increase your Account balance
or not
Bonus Interest means an additional rate of interest you will earn each
month in which you increase your Account balance by $200.00 or more
• Bonus Interest is available on balances up to a maximum of $250,000.
To determine if you are eligible for Bonus Interest in a month, we will
calculate the difference between the closing balance on the last business
day of the previous month and the closing balance on the last business
day of the current month and that difference must be at least $200.00.
The closing balance at the end of the current month excludes Base
Interest credited from the current month, Bonus Interest credited from
the previous month and any withdrawal or transfer fees
• Bonus Interest is calculated on the daily account closing balance and paid
monthly on the second business day of the following month. Bonus
Interest is calculated from the first business day of the month, regardless
of which day you may have qualified for Bonus Interest
• You will not qualify for Bonus Interest and will only earn Base Interest
on your Account balance:
(i) for each month that you do not increase your Account balance by $200.00
or more; and
(ii) on the portion of your Account balance that exceeds $250,000
• Base Interest is calculated on the daily closing balance and paid monthly
on the last business day of the month
• If you switch from a Savings Builder Account to another account type
(where permissible) or close a Savings Builder Account, you are not
eligible to earn Bonus Interest for that month even if your Account
balance increased by $200.00 or more. You will earn
Base Interest on the entire Account balance up to the previous business
day of the switch or closure
• We may change the amount that you must increase your Account balance
each month to earn Bonus Interest at any time
• We may change interest rates or balance tiers or both from time to time.
Up-to-date information on rates and terms is available at all our Canadian
branches where deposit accounts are kept, online at bmo.com/rates and
by calling 1-877-225-5266. Interest rates are per annum
• You are only allowed one Savings Builder Account in your name,
regardless of whether the Account is single, ‘in trust’ or held jointly
5143504 (04/15)
Everyday Banking Savings Builder Account
Introducing the
BMO® Savings
Builder Account.
The first account in Canada1
to reward you with bonus interest
for saving monthly.
BW3059_Fanta_Brochure_EN_v4.indd 1 15-03-16 7:15 AM
SAVE.
EARN.
REPEAT.
Save.
Open a new Savings Builder Account
and deposit $200 or more.
Earn:
Earn 0.30% interest on every dollar.
Get an additional 1.00% interest on
every dollar up to $250,000, when
you increase your savings by $200
each month.2
Repeat:
Repeat monthly.
Ask us or visit
bmo.com/savingsbuilder for details.
Here’s how it works:
$200
1.30%
It’s that easy. Save $200
or more each month.
Earn a great bonus rate.2
Repeat monthly.
Ask us how to get started.
1 When comparing the BMO Savings Builder Account with other savings accounts
available on the public websites of CIBC, TD Canada Trust, RBC Royal Bank, Scotiabank,
Tangerine, PC Financial as of March 1, 2015.
2 The interest rate of 2.50% is comprised of a base interest rate of 0.30% plus a bonus
interest rate of 1.00% plus an introductory interest rate of 1.20%. The base interest
rate applies to the entire balance in your Savings Builder Account (“Account”). The
bonus and introductory interest rates each apply to your Account balance up to
$250,000 each month in which you increase your monthly Account balance by $200.00
or more. To determine if you are eligible for bonus interest or introductory interest in
a month, we will calculate the difference between the closing balance on the last
business day of the previous month and the closing balance on the last business day
of the current month excluding base interest from the current month, bonus interest
credited from the previous month and any withdrawal or transfer fees, and that
difference must be at least $200.00. The base interest is calculated on the daily closing
balance and paid monthly on the last business day of the month. The bonus interest
and introductory interest are each calculated on the daily closing balance and paid
monthly on the second business day of the following month. The bonus interest and
introductory interest are each calculated from the first business day of the month,
regardless of which day you may have qualified for bonus interest and introductory
interest. The base interest rate and bonus interest rate each may be changed at any
time without notice. The introductory interest rate is available until June 30, 2015.
Current interest rates are available at BMO branches where accounts are serviced, at
bmo.com/rates and by calling 1-877-225-5266. The introductory interest rate offer may
be changed or withdrawn at any time without notice. Refer to the Disclosures for the
Savings Builder Account for full details. TM/® Trademarks of Bank of Montreal.
Limited time offer:
Earn 2.50% interest
until June 30, 2015 when
you increase your monthly
savings by $200.2
BW3059_Fanta_Brochure_EN_v4.indd 2 15-03-16 7:15 AM

March 31, 2015
9:54 am
Loonie
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So, there is online access. Looks like you could do the one free withdrawal per month, if needed, by having a chequing account. You'd need to check on chequing account fees. Probably best to not plan on any withdrawals.

Perhaps, for the monthly deposits, you could push from another institution? You would need to be wary of the limits on number of linked accounts - e.g. Tangerine.

You should be able to deposit a cheque through ATM, which is less of a nuisance. A few institutions have free chequing, or you may have a seniors account with free chequing somewhere.

Beware of any general fees for closing an account within X days, often 90 days.

It looks to me like this may be a new type of account. It's possible there will be other incentives to retain or expand your business after end of offer.

March 31, 2015
10:12 am
kanaka
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Disclaimer....my wife does her day to day banking at BMO and over the years was our primary banking including loans and mortgages. I currently use BMO to flush Air Miles Vouchers through to maturity and then move the funds elsewhere.

Since being here I have found that the big 5 don't have the best rates and for a little effort you can make 100's more.

I see this BMO campaign is aligned with potential income tax returns with a possible unattainable twist for some, to deposit another 200 per month.

I don't pay fees to BMO as I have an old grandfathered account. BUT on my last mailed (free) statement they have increased fees and dropped some accounts. Some of the increases were significant and far far above the inflation rate.

RATE CHASERS....BE AWARE!

March 31, 2015
10:32 am
Ratesearcher
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Loonie, agreed, watch about closing an account within 90 days... I believe BMO has a $20 fee, so it would be wise to avoid that. Still, from what I can tell, for those who are careful about dotting their i's and crossing their t's, and are willing to do a bit of work, and have a really big lump sum to stash temporarily, it can be worth it. You can get 2.5% with BMO instead of <1% with most other big banks, ~1.75% with credit unions, and the current 2.1% targeted only to a very small minority of eligible Tangerine customers. Financial institutions do what are in their own best interests. Consumers, depending on their degree of motivation, can consider doing the same.

March 31, 2015
10:36 am
james1900
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I can share some experience with BMO too. Previously I had a "pay-as-you-go" chequing account with BMO. I only withdraw from it occasionally. The fee was $0.75. Later they increased it to $1. Now the fee per withdrawal is $1.25. That actually does not matter very much, as I only use it 1 or twice per year. Now, they sent me a letter to inform me that "after carefully considered customers' need, we are going to eliminate pay-as-you-go account". I immediately called them to close my chequing account. You see, the point is: they CAREFULLY evaluated customers' need!

March 31, 2015
10:38 am
Bill
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As a non-BMO customer it's not worth the work to open, fund and then withdraw from the account at end of June when rate goes to regular 1.3% rate. This is aimed at existing BMO customers and those who want to move some banking to BMO long-term, (understandably) not at rate chasers. Similar to existing 2% CIBC promotion.

March 31, 2015
10:47 am
kanaka
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james1900 said

I can share some experience with BMO too. Previously I had a "pay-as-you-go" chequing account with BMO. I only withdraw from it occasionally. The fee was $0.75. Later they increased it to $1. Now the fee per withdrawal is $1.25. That actually does not matter very much, as I only use it 1 or twice per year. Now, they sent me a letter to inform me that "after carefully considered customers' need, we are going to eliminate pay-as-you-go account". I immediately called them to close my chequing account. You see, the point is: they CAREFULLY evaluated customers' need!

More like their "need" for greed! They only keep what is most profitable to them.

I forgot to mention the $5 savings account withdrawal fee can be avoided by transferring from savings to chequiing and then withdraw...as advised by a BMO FSA.

March 31, 2015
1:14 pm
Loonie
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Bill said

As a non-BMO customer it's not worth the work to open, fund and then withdraw from the account at end of June when rate goes to regular 1.3% rate. This is aimed at existing BMO customers and those who want to move some banking to BMO long-term, (understandably) not at rate chasers. Similar to existing 2% CIBC promotion.

I think it depends on your circumstances - time, capital, convenience, tax bracket, etc.
If we assume the average going rate at a preferable institution is about 1.8%, then the bonus at BMO is about .7%. On $100,000, for 3 months, this is about $175 extra interest, minus income tax. It may be most useful for retired persons who have the time, capital, lower tax bracket and could use the exercise if in walking distance. Young people who are penny-pinching and are within easy walk of several banks in urban areas might find it worth their while and can be accomplished on a lunch hour, even if they don't have a lot of money.

April 4, 2015
10:34 am
Ed
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Bill said

As a non-BMO customer it's not worth the work to open, fund and then withdraw from the account at end of June when rate goes to regular 1.3% rate. This is aimed at existing BMO customers and those who want to move some banking to BMO long-term, (understandably) not at rate chasers. Similar to existing 2% CIBC promotion.

FYI... The "regular" rate for a BMO high interest savings account is only .8%.

April 5, 2015
1:47 pm
AltaRed
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Given I have a BMO Investorline account, it was simple for me to open a Builder account (today) and to move my BMO IL HISA (1.0%) money over in the next few days with a few keystrokes. Just got to remember to add the $200 each month.

Thanks to this site for bringing this to my attention.

April 6, 2015
3:24 am
Loonie
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$20 fee for closing an account within 90 days.
https://www.bmo.com/main/personal/bank-accounts/edb-fees-agreements

April 6, 2015
8:11 am
AltaRed
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Yes, I see that. No need to close the account. Leave the necessary minimum in there at the end. I've done the same with Scotia Power Savings with a promotion they had a year or two ago (have a Scotia iTrade brokerage account as well). When those promotions are on with better interest than 1.0% brokerage ISAs, it is a no brainer to move money 'in house' for those promotions.

August 17, 2015
9:22 am
Calan
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Seems like this Savings Builder account w/ 1.3% interest is a better deal now than many others. I'm eligible for no-fee banking at BMO (as a "recent graduate"), making this a no-brainer for as long as that lasts. I plan to add $200/month until Tangerine's 3% on new deposits runs out and then likely move everything over to BMO until Tangerine's next promo. A rare thing to have one of the Big 5 offer a better deal than Tangerine etc.

August 17, 2015
11:39 am
Loonie
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Keep an eye on the rate on this account. It is not guaranteed for any particular length of time at this point. I doubt they will bother to inform you if it goes down.
https://www.bmo.com/home/personal/banking/rates/bank-accounts

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