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Recommendations for a Chequing Account replacement
January 11, 2020
2:44 pm
Briguy
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Doug said

Wedding presents - nice alternative would be cash. Could also go with an Interac e-Transfer; that's never impersonal. They have nice e-cards you can use, too. sf-cool

Life insurance, with cheques? That's very odd and definitely non-standard. Most life insurance premiums are paid by pre-authorized debit or credit card (you could earn points for that, too, which I know you like since you've set up an SPP DC pension plan to which you, presumably, contribute via credit card like @xgbSs over at RFD sf-cool).

Large transfers - potentially necessary, yes, but most FIs let you transfer $100,000 per transaction and/or per day. Some have lowered it to $25-50,000.

Only thing I use a cheque for is paying for my haircuts since it's easier than taking out cash and I don't have to tell him how much to give me back in change. I can make it out for $35 ($29 + $6 tip). He'll take e-Transfers, but his CU business account isn't set up for online banking (online banking often costs money for businesses) so he'd have to, presumably, deposit it to his personal account and then transfer to his business.

I still think cheques will be phased out between 2025-2030 when Payments Canada brings in the next generation payments system that will feature real-time payments. This is scheduled to be implemented in late 2020 or 2021, I believe, so everything Norman and I have been saying about Payments Canada's EFT system will be thrown out the window. Major changes are afoot.

Cheers,
Doug  

I think it's risky giving cash at a wedding in case they lose the envelope.

I have an aversion to prepaying any bills through preauthorized debit, as I was burned in the past with my home alarm system that was set up during purchase of house. I pay the majority of my bills that can't be paid through credit cards directly ,through Canadian Tire (Triangle) credit card bill pay, except for the credit card bills themselves that I pay through bill pay at Scotiabank. For some reason some of my insurances eg. Foresters, aren't available through those means so I mail a cheque.

Some FIs don't link to other banks, or accept etransfers, (Access Credit Union) so the only way to get money into them is by pushing from another bank, which the big 5 don't do, or by depositing a cheque.

I also pay tradesmen who do repairs mostly by cheque.
I think in future we will be using apps like Revolut for paying rather than etransfer, at least between friends.

January 11, 2020
4:51 pm
Norman1
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Briguy said

The sweep feature would protect you against overdraft for someone who doesn't want to monitor their accounts if for eg. you knew that your maximum cheque amount you write for is 2000.00 and you set the sweep at 2000.00

That won't work either. If another $100 cheque ends up clearing on the same day as a $2,000 cheque, then one of them will bounce.

There will also be a problem if one writes a $5,000 cheque one day, transfers $5,000 from the savings account to cover the cheque, and forgets to adjust the sweep that moves extra money in the chequing account to savings.

Overnight, that sweep will see the "extra" $5,000 in the chequing account and transfer it back to the savings account. The $5,000 cheque posts and then bounces. sf-surprised

They should have not bothered and just let people have free debits on their HISA.

January 11, 2020
5:13 pm
Doug
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Briguy said
I think it's risky giving cash at a wedding in case they lose the envelope.

True, but then there's always a gift card or an Interac e-Transfer, neither of which are tacky.

I have an aversion to prepaying any bills through preauthorized debit, as I was burned in the past with my home alarm system that was set up during purchase of house.

I get that, but often this comes from not realizing that financial institutions are obligated to return a pre-authorized debit for any reason (except in the case of funds transfer, or bank-to-bank transfer, debits) within 90 days of the transaction date, if the client requests it and signs a Payments Canada standard form. In many respects, PADs can be returned more easily than credit card payments.

I pay the majority of my bills that can't be paid through credit cards directly ,through Canadian Tire (Triangle) credit card bill pay, except for the credit card bills themselves that I pay through bill pay at Scotiabank. For some reason some of my insurances eg. Foresters, aren't available through those means so I mail a cheque.

Wow, you like life insurance, Briguy. Do you have kids? I guess I've never really asked you that, so maybe you do. I have seen Foresters payee names on pre-authorized debits, so I assume they offer it.

Some FIs don't link to other banks, or accept etransfers, (Access Credit Union) so the only way to get money into them is by pushing from another bank, which the big 5 don't do, or by depositing a cheque.

Their pending merger with Crosstown Civic Credit Union should put this issue to rest. If they don't have Interac e-Transfer capabilities yet, I expect them to in the next year or so, either when they combine their banking systems post-merger or sooner.

I also pay tradesmen who do repairs mostly by cheque.

I would strongly advise you to consider sending them an Interac e-Transfer, or pay in cash if they request that, as often tradespeople have holds on their deposits and cheques are far less convenient for them. You may also run in to issues with payday loan locations coming after you to collect on the payment if you've put a stop payment on it. It's apparently legit and the CBC did some stories on it a few years ago.

Norman1 said

Briguy said

The sweep feature would protect you against overdraft for someone who doesn't want to monitor their accounts if for eg. you knew that your maximum cheque amount you write for is 2000.00 and you set the sweep at 2000.00

That won't work either. If another $100 cheque ends up clearing on the same day as a $2,000 cheque, then one of them will bounce.

True, but not all financial institutions automatically bounce payments. Many have staff to review overdrafts, or at least that were overdrawn at the end of the previous business day. Still, even if paid, this service typically incurs a per transaction service of $5.00.

They should have not bothered and just let people have free debits on their HISA.  

Here, here, Norman! Though, to be fair, there have been reports from users here and at RFD of them not charging fees for PADs on their savings account, despite the apparent applicability of fees in the fee schedule.

Cheers,
Doug

January 11, 2020
5:56 pm
Rick
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Briguy said

If you have grandfathered in overdraft protection with Motive Financial, and don't mind checking your chequing account every day, you can keep zero money in your chequing account and transfer in money before midnight from your savings accountwhenever you see a cheque get cashed, and you won't get charged any interest.

Unfortunately I started with Motive after the overdraft protection got cancelled.  

Over draft protection at Motive was discontinued as of Nov 30, 2019. Grandfathered or not, it's no longer available. From my letter from Motive dated Sep 30:
"...we believe by focusing instead on the things we do well, high interest rates and no-fees on our deposit accounts, will really allow Motive to continue to grow and give us the opportunity to revisit these types of products in the future"

"To this effect, your personal Overdraft Protection account will be closed on November 30. 2019"

and:
"Effective immediately, no new LOC/POP will be opened or made available"

Considering their GIC rates are closer to the bottom of the pack than the top, not sure that is working out too well for them. I consider OD protection a basic necessity for my day-to-day banking, and have had to alter how/when I pay my bills. Would not recommend them to anybody for their daily banking needs.

January 11, 2020
6:08 pm
Briguy
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In the past I was able to pull 0.32 test withdrawal out of my Meridian savings account from Hubert, so I assume you are able to do a PAD on your Motus HISA as well, since it's the same bank. But I don't know if they will start charging you fees or cancel your account if you have a regular reoccurring PAD from your Motus savings account since the direct deposit form for that account says Pre-authorized debits are not allowed

January 11, 2020
6:11 pm
Briguy
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Rick said

Over draft protection at Motive was discontinued as of Nov 30, 2019. Grandfathered or not, it's no longer available. From my letter from Motive dated Sep 30:
"...we believe by focusing instead on the things we do well, high interest rates and no-fees on our deposit accounts, will really allow Motive to continue to grow and give us the opportunity to revisit these types of products in the future"

"To this effect, your personal Overdraft Protection account will be closed on November 30. 2019"

and:
"Effective immediately, no new LOC/POP will be opened or made available"

Considering their GIC rates are closer to the bottom of the pack than the top, not sure that is working out too well for them. I consider OD protection a basic necessity for my day-to-day banking, and have had to alter how/when I pay my bills. Would not recommend them to anybody for their daily banking needs.  

Thanks ! Good to know that there's no more overdraft for anyone at Motive, as you say this takes them out of consideration for the best all in one bank, as you will need to keep extra money in the chequing account and lose out on interest if they're your only bank.

January 11, 2020
6:33 pm
fitzy7
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I called Alterna today and talked to them about their account types. The person I spoke to answered immediately and seemed genuinely excited I had heard of coverdraft. (Kind of odd they don't mention it on their webpage)

Basically I could keep 0 balance in the eChequing account, and with coverdraft they would automatically pull money in from the eSavings as required for debit purchases or PAP.

Joint accounts are possible, although each person needs to have your own individual account as well which are then linked. Not a big deal.

Doug, the reason why this would make sense to me is that I don't keep a balance that low in my chequing. It has to quite a bit higher due to the size of my PAP, and I'm not able to login daily to monitor my accounts. Once you factor that in, I believe my net return would be higher with just 2.2%. And besides, I do have Motive's savvy saving account so if I have true surplus I will move it there.

January 11, 2020
6:48 pm
Briguy
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fitzy7 said
I called Alterna today and talked to them about their account types. The person I spoke to answered immediately and seemed genuinely excited I had heard of coverdraft. (Kind of odd they don't mention it on their webpage)

Basically I could keep 0 balance in the eChequing account, and with coverdraft they would automatically pull money in from the eSavings as required for debit purchases or PAP.

Joint accounts are possible, although each person needs to have your own individual account as well which are then linked. Not a big deal.

Doug, the reason why this would make sense to me is that I don't keep a balance that low in my chequing. It has to quite a bit higher due to the size of my PAP, and I'm not able to login daily to monitor my accounts. Once you factor that in, I believe my net return would be higher with just 2.2%. And besides, I do have Motive's savvy saving account so if I have true surplus I will move it there.  

They don't have free cheques. so if you need, order from a discount company like ASAP cheques to save money.

January 11, 2020
7:02 pm
fitzy7
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Briguy said

They don't have free cheques. so if you need, order from a discount company like ASAP cheques to save money.  

That's too bad. I only use 12 cheques a year.
But I see Alterna offers reoccurring me2me transfers so I could just transfer in the required money to my TD account which has free cheques.

Wedding gifts in cash so far, but I like the idea of giving a cheque!

January 11, 2020
7:09 pm
Briguy
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fitzy7 said

That's too bad. I only use 12 cheques a year.
But I see Alterna offers reoccurring me2me transfers so I could just transfer in the required money to my TD account which has free cheques.

Wedding gifts in cash so far, but I like the idea of giving a cheque!  

If you don't need cheques you probably don't even need a chequing account from Alterna, just do everything through the HISA

January 11, 2020
7:14 pm
Norman1
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Doug said
True, but not all financial institutions automatically bounce payments. Many have staff to review overdrafts, or at least that were overdrawn at the end of the previous business day. Still, even if paid, this service typically incurs a per transaction service of $5.00.

I don't know if Motus Bank would have the staff to do that reliably. The time allowed under Payment Canada Rule A4 to bounce an item for reason NSF is quite short. I think it is by next business day.

If the staff are too busy, they may just not bother and decline all the overdrafts over $2, at the end of the next business day.

In the Motus Bank fee schedule, the accepted NSF fee is $5. Rejected NSF fee is $45!
Interestingly, the schedule has a "Coverdraft" fee of $2.

… Though, to be fair, there have been reports from users here and at RFD of them not charging fees for PADs on their savings account, despite the apparent applicability of fees in the fee schedule.

That's probably because there isn't supposed to be any pre-authorized debits against their savings account. I suspect someone forgot to "flip the switch" in their system to automatically return such debits for reason NCP (No Debit Allowed). sf-surprised

January 11, 2020
7:33 pm
fitzy7
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Briguy said

If you don't need cheques you probably don't even need a chequing account from Alterna, just do everything through the HISA  

Thanks I'm not sure why I didn't notice that before, you're right.

No debit card though... think I might want that. I will sign up for both.

January 11, 2020
7:35 pm
Loonie
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I think AlternaBank is probably the right answer in this case. I have an account there but don't use it much. After reading this thread, I'm starting to think maybe I could use it as a main day to day account rather than CIBC. I don't pay anything at CIBC due to being a senior, but there is definitely lost interest.

I can certainly recommend AlternaBank as being efficient and no-nonsense with fairly consistent rates.

Good advice on getting the cheques elsewhere. Also, be careful that you understand the difference between AlternaBank and Alterna credit union, just to keep yourself form getting confused later if you should end up on the wrong website.

My second choice would probably be motusbank, but I don't think it really offers you any advantage. I thought of it mainly because it offers a fairly high rate on its chequing account, of 0.5%. But the HISA rate is slightly less than AlternaBank and it sounds like you don't really need another chequing account. Cheques however, are free. I had a lot of issues opening accounts at motusbank. Hopefully that has subsided now, but they are slow at transfers to / from external accounts and that is not likely to change.

January 11, 2020
7:52 pm
fitzy7
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Loonie said
I think AlternaBank is probably the right answer in this case. I have an account there but don't use it much. After reading this thread, I'm starting to think maybe I could use it as a main day to day account rather than CIBC. I don't pay anything at CIBC due to being a senior, but there is definitely lost interest.

I can certainly recommend AlternaBank as being efficient and no-nonsense with fairly consistent rates.

Good advice on getting the cheques elsewhere. Also, be careful that you understand the difference between AlternaBank and Alterna credit union, just to keep yourself form getting confused later if you should end up on the wrong website.

My second choice would probably be motusbank, but I don't think it really offers you any advantage. I thought of it mainly because it offers a fairly high rate on its chequing account, of 0.5%. But the HISA rate is slightly less than AlternaBank and it sounds like you don't really need another chequing account. Cheques however, are free. I had a lot of issues opening accounts at motusbank. Hopefully that has subsided now, but they are slow at transfers to / from external accounts and that is not likely to change.  

Thanks for your insight on motus vs Alterna. Ultimately no nonsense and efficient is important, since my wife will be banking here along with me!

January 21, 2020
7:21 pm
fitzy7
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Just to wrap this up, I did apply to Alterna Bank. Got the accounts set up and made joint. Had a few issues getting coverdraft activated but it seems to be working now. Tested it today successfully. Thanks everyone.

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