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Newbie questions on transfer fees and introductory rate offers
October 12, 2020
4:37 pm
ronjoh
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Hi, I think I'll be happy I found this site.
Can anyone please advise if there is usually a cost to transfer cash digitally and when I open an account with one of the HIS banks is there any fee to open or close an account? Also if I choose an introductory rate, is it okay to pull the cash and go elsewhere? do I leave the account open for future (0 balance) or do I have to close it? If I take an introductory rate do I need keep funds in the bank for any period of time, Thanks this is all new to me and appreciate the help

October 13, 2020
12:54 am
Rick
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ronjoh said
Hi, I think I'll be happy I found this site.
Can anyone please advise if there is usually a cost to transfer cash digitally

If you set up links between your various institutions, there is not usually charge for moving unregistered funds between them. If the funds are registered,(RSP, RIF, TFSA), there is a fee set by the sending bank...anywhere from 0 to over 100....depends on the FI. If you are talking E transfers, fee depends on the FI and which type of account you have. Have to check terms and conditions of each before you sign up.

ronjoh said
and when I open an account with one of the HIS banks is there any fee to open or close an account?

Haven't heard of any FI's that charge a fee to open an account, unless maybe you are talking a trading type account. Don't deal with those so can't say. Most FI's will charge a fee for closing an account within a certain time period after opening. Have to check each for terms and conditions.

ronjoh said
Also if I choose an introductory rate, is it okay to pull the cash and go elsewhere?

Unless you lock it into a term, it's your cash...do what you want with it.

ronjoh said do I leave the account open for future (0 balance) or do I have to close it?

Debatable. Having too many accounts can have an effect on your credit rating and can sometimes be difficult to juggle. 5 is my number. Also don't want all your eggs in one basket so more than one is necessary IMHO. Chose carefully from the FI's that have the best rates combined with the types of accounts you need.

ronjoh said
If I take an introductory rate do I need keep funds in the bank for any period of time, Thanks this is all new to me and appreciate the help  

Depends on the offer. No two are the same. Have to read the Terms and Conditions carefully. Don't be afraid to call up the customer service and ask any questions, and hang around here. Lot of people around here much smarter than I am. Welcome to the forum!

October 13, 2020
6:03 am
Nehpets
Ontario
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ronjoh said
.... do I leave the account open for future (0 balance) or do I have to close it?...  

Hello RonJoh and welcome to the Forum. Some of the online banks have recurring promos, so it's not a bad idea to keep the account open; however it should be logged into every few months and perhaps even make a minor deposit / withdrawal.

Hubert says they will charge you for inactivity after 6 months, and others may lock you for inactivity, requiring a phone call to reinstate online access.

My experience with EQ Bank was that after closing the account, they refused to re-open a new account later.

As has been mentioned, diligent record keeping is essential if you intend to rotate among several of the HISA promo offerings.

Read the fine print and follow the progress of the promo in discussions on this Forum, as changes sometimes occur quickly requiring rapid reaction to move funds.

Stephen

October 13, 2020
9:00 am
fbeaulie
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Some HISAs (e.g., Outlook Financial) allow for Interac e-Transfer and bill payments directly from the Savings Account. It could be quite a convenient feature when you quickly need some of that money.

October 13, 2020
9:08 am
topgun
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Setup external link to your checking account(s). You then have the option to Interac e-transfer or EFT depending on your needs.

Have a Great Day

October 13, 2020
9:30 am
fbeaulie
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topgun said
Setup external link to your checking account(s). You then have the option to Interac e-transfer (…) 

Do you mean that I would be able to do an Interac e-Transfer out of B2B HISA or LBC HISA (I don't have checking accounts with them) if one of my external linked accounts would be a checking account?

EFT: I push or pull depending on the circumstances but there is always a delay before being able to access the money in the external account. Usually not an issue but could be useful if I ever need the money instantaneously.

Thanks

October 13, 2020
11:11 am
Loonie
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Be sure you keep the account open at least until the interest is paid to you. Simplii takes its time about that. Steinbach pays out at the end of the year but says it will pay when and if you close out.

3 months is the usual minimum to keep an account open before charging a fee but you do need to check with each bank. Some also charge an "inactivity fee" or "dormant account" fee if you keep the account but aren't using it. You need to check on that. If there are these fees, it's usually a simple matter to move a dollar in or out every so often, but wise to put it on your calendar.

October 13, 2020
12:32 pm
Londonguy
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ronjoh said: do I leave the account open for future (0 balance) or do I have to close it?

Rick said: Debatable. Having too many accounts can have an effect on your credit rating....

That answer is patently incorrect. The number of bank accounts you hold has nothing whatsoever to do with your credit rating. Credit agencies only track your debts.

October 13, 2020
12:56 pm
fbeaulie
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Londonguy said
ronjoh said: do I leave the account open for future (0 balance) or do I have to close it?

Rick said: Debatable. Having too many accounts can have an effect on your credit rating....

That answer is patently incorrect. The number of bank accounts you hold has nothing whatsoever to do with your credit rating. Credit agencies only track your debts.  

I was wondering about that as well because several people who know that I have several savings accounts have asked me that question. My answer has always been "no" (for Equifax or TransUnion - not talking about an in-house rating done by a bank after asking additional questions, I don't know if it could have an impact in those cases).

As far as I know, the only thing that could have an impact is a potential inquiry to validate your identity at the time of opening the savings account (however, it is supposed to be a "soft inquiry" that has no impact).

(One of the advantage of having accounts opened with several virtual banks is that it could seriously complicate the life of fraudsters who would try to open an account under your name with these virtual banks to fraudulently claim things like the Canada Emergency Response Benefit!)

October 13, 2020
1:53 pm
dougjp
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I have never paid any fees for EFT transfers of unregistered funds to and from my various HIS online banks and my checking account. Note that some HIS online banks have limits on the daily size of transfers out.

I always leave a few pennies in/keep open all accounts where I don't currently carry balances of consequence. You never know when a bank that had a promo rate that ended, wakes up and has another. Banks make piles of profit on post promo rate balances that people don't withdraw, however eventually that benefit fades. For example my CT Financial account was dormant for years, yet I just logged in as they got back in the game, and transferred funds without any further calls or things to do.

If you plan on opening HIS accounts at multiple banks, I suggest (a) considering if any or all should be set up as joint accounts with spouse/family member etc., if the HIS banks offer that, and (b) start some decent record keeping, perhaps a spreadsheet that you keep up to date with what balances are where, how to contact them etc. I'm mindful of the complications, and the burden on somebody, of tracking down and dealing with my online banks if something happened to me.

October 13, 2020
2:21 pm
topgun
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dougjp said
I have never paid any fees for EFT transfers of unregistered funds to and from my various HIS online banks and my checking account. Note that some HIS online banks have limits on the daily size of transfers out.

I always leave a few pennies in/keep open all accounts where I don't currently carry balances of consequence. You never know when a bank that had a promo rate that ended, wakes up and has another. Banks make piles of profit on post promo rate balances that people don't withdraw, however eventually that benefit fades. For example my CT Financial account was dormant for years, yet I just logged in as they got back in the game, and transferred funds without any further calls or things to do.

If you plan on opening HIS accounts at multiple banks, I suggest (a) considering if any or all should be set up as joint accounts with spouse/family member etc., if the HIS banks offer that, and (b) start some decent record keeping, perhaps a spreadsheet that you keep up to date with what balances are where, how to contact them etc. I'm mindful of the complications, and the burden on somebody, of tracking down and dealing with my online banks if something happened to me.  

I have used a financial software package for years. After leaving I leave the account open in case I need sometime in future. Accounts gradually consolidate, it gets simpler.

Have a Great Day

October 13, 2020
2:33 pm
Dean
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dougjp said

. . . and (b) start some decent record keeping, perhaps a spreadsheet that you keep up to date with what balances are where, how to contact them etc. I'm mindful of the complications, and the burden on somebody, of tracking down and dealing with my online banks if something happened to me.  

This ⬆ ❗

It's commonly referred to as the financial part of one's 'Estate Directory' ... we should all have one, and keep it up to date.

'Carpe Diem'

      Dean

sf-cool " Live Long And Prosper " sf-cool

October 13, 2020
3:58 pm
Londonguy
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fbeaulie said

As far as I know, the only thing that could have an impact is a potential inquiry to validate your identity at the time of opening the savings account (however, it is supposed to be a "soft inquiry" that has no impact).

As you noted, a soft inquiry is a non-event from a credit score perspective. But even if you have to allow a hard pull to open a bank account (which is more likely to happen if you're opening a cheqing account since you could theoretically overdraw it), a hard pull will only result in a drop of a few points, and then only temporarily.

That's because with a bank account there's no monthly follow-on reporting to the credit bureaus of a balance owing like there would be if you had opened a credit card, mortgage or line of credit. So if nothing else happens to alter your credit profile in the meantime, over the following few months your score will just drift back to where it was beforehand

October 13, 2020
4:19 pm
topgun
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My savings account pays no interest. .05% checking .15% savings. A few CC statements ago I decided to pay my CC as I used it. On statement date balance is ZERO to small. Yes my credit score drops a little then recovers in the next month. Good thing no large CC balance. Having fun.

Have a Great Day

October 13, 2020
11:12 pm
Rick
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Londonguy said
ronjoh said: do I leave the account open for future (0 balance) or do I have to close it?

Rick said: Debatable. Having too many accounts can have an effect on your credit rating....

That answer is patently incorrect. The number of bank accounts you hold has nothing whatsoever to do with your credit rating. Credit agencies only track your debts.  

Correct...pardon my lack of detail. Opening several bank accounts can affect your score IF they do checks on you. I have been a Motive customer for years and they still did a check on me when I switched my accounts to the new Saavy model. No LoC or overdraft involved. It was NOT a soft check and it was reflected in a drop of my score the next month. Personally, I don't know the practice of every FI when it comes to opening accounts with them. If line-of-credit or overdraft is involved, I find it hard to believe that a hard check would NOT be done. I also doubt that a FI checking your rating, even a soft check, would not wonder why you have opened several accounts at different FIs within a few days/weeks/months. Which is why I said opening too many "can" affect your rating. To patently say that it is patently incorrect is, in itself, patently incorrect. Especially when Motive, EQ, People's, Simplii etc, routinely deny applications with no explanation.

October 13, 2020
11:25 pm
Rick
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topgun said
My savings account pays no interest. .05% checking .15% savings. A few CC statements ago I decided to pay my CC as I used it. On statement date balance is ZERO to small. Yes my credit score drops a little then recovers in the next month. Good thing no large CC balance. Having fun.  

Personally, I'm not a fan of credit scores. They are a made up number that should be used as a guide only, not relied on at all by lenders, and are inconsistent when compared between suppliers.
https://www.cbc.ca/news/business/marketplace-credit-score-1.5314868
They are good to monitor for fluctuations in case of attempted identity theft and that's about it. I'm past the point of caring whether a cell provider does a check on me and my score takes a hit. It will bounce back. But I'm curious. Please explain. You pay your balance before the statement or due date and your score goes down?? Is that correct? How can it recover the next month, unless you don't use it at all?

October 14, 2020
5:16 am
topgun
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Rick said

Personally, I'm not a fan of credit scores. They are a made up number that should be used as a guide only, not relied on at all by lenders, and are inconsistent when compared between suppliers.
https://www.cbc.ca/news/business/marketplace-credit-score-1.5314868
They are good to monitor for fluctuations in case of attempted identity theft and that's about it. I'm past the point of caring whether a cell provider does a check on me and my score takes a hit. It will bounce back. But I'm curious. Please explain. You pay your balance before the statement or due date and your score goes down?? Is that correct? How can it recover the next month, unless you don't use it at all?  

Every account you have open reports your status once a month. Every account includes all your CC plus accounts that use CC for pre-authorized payments. Sometimes the reporting period is far longer than 30/31 days. I think when they do not report in a timely manner Transunion lowers your score. Of course there is someone on this board that says he does not care. I guess I do not care. My CC is paid in full by/on Due Date. What about individuals that signup for pre-authorized minimum balance on Due Date? They have fulfilled their commitment. The FI likes that since they collected large interest. The individual should have a GOOD/EXCELLENT credit score.

Have a Great Day

October 14, 2020
6:47 am
Londonguy
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Clearly there is a lot of confusion here about what it actually is that Equifax and TransUnion do. When a FI seeks to verify your identify my making an inquiry of either or both of the credit bureaus, it receives an electronic response containing your credit profile, either in basic or detailed form depending on whether it's a soft or hard pull. There is nobody sitting at the other end of the line at the credit bureau looking at your file and making qualitative judgements about your worthiness, that's solely up to the lender. But we aren't even talking about lending anyway, we're talking about a simple ID check.

It's incorrect to believe that any FI would review your credit file and say, "Hmm, I see you've opened up 3 bank accounts in the past 6 months, I wonder if you might be up to no good, so I'm going to deny your application." That's not how it works. The only reason any FI will deny an online application to open a simple bank account is because the application's personal information doesn't fully match what's in your credit file, because it's a red flag to the FI that perhaps you're not really who you claim to be.

However, it's usually not an error in the account application information that's the problem (because you're you, and you know what's correct), it's because the information in your credit file is incorrect and therefore doesn't match. But FIs can't possibly know which version is accurate, only you can, and if you're getting rejected for no apparent reason (especially for a non-lending account like a deposit account), it's because there are significant errors in your file that you need to get fixed. The only way to do that is to pull your own file and see what's in it, and then deal with the errors

October 14, 2020
12:13 pm
Alexandra
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For years that I know of, Equifax had my wrong birthdate. They had me a year younger than I actually am.

Probably 20 years ago the bank told me this when they checked my credit and that I should have it corrected. I never did get around to it until last year. I never had a problem with a mortgage, line of credit, getting a bank account or getting a credit card. So did nothing.

Then a year or so ago, I tried to open an account with an on-line bank because they were offering a good HISA rate. I can't remember which bank it was as I have so many accounts. Anyway they denied me on my online application. I talked with their rep and he said to get in touch with Equifax. So I did, and after sending them my birth certificate, passport & drivers license, they cleared it up. The reason for the birthdate error was my original social insurance application (from back in 1967), had the wrong birthdate. They probably still do. It was probably a keypunch error.

October 14, 2020
12:44 pm
topgun
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Alexandra said
For years that I know of, Equifax had my wrong birthdate. They had me a year younger than I actually am.

Probably 20 years ago the bank told me this when they checked my credit and that I should have it corrected. I never did get around to it until last year. I never had a problem with a mortgage, line of credit, getting a bank account or getting a credit card. So did nothing.

Then a year or so ago, I tried to open an account with an on-line bank because they were offering a good HISA rate. I can't remember which bank it was as I have so many accounts. Anyway they denied me on my online application. I talked with their rep and he said to get in touch with Equifax. So I did, and after sending them my birth certificate, passport & drivers license, they cleared it up. The reason for the birthdate error was my original social insurance application (from back in 1967), had the wrong birthdate. They probably still do. It was probably a keypunch error.  

If your SIN has the wrong birthdate it should be corrected to get the benefits you deserve. Your benefits will start one year later.

Have a Great Day

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