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The Case of the Disappearing Registered Account
January 2, 2018
2:46 pm
Loonie
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Tried to make 2018 TFSA contribution today at Hubert, only to find out that the account no longer exists.sf-surprised It was set up last year, complete with beneficiary form, in order to provide a space (empty in 2017) that would be available this year for the contribution at the beginning of the year.

Upon inquiry, we were told that Hubert has to pay an annual fee (presumably to Concentra?) to keep an account like this open, so, if there is nothing in it, they close it.

I don't recall anything in the T&C about this. In fact, it says on the TFSA page, "No minimum balance required." (https://www.happysavings.ca/products/high-interest-accounts/tfsa/ )

They were able, upon request, to reactivate the account, but it could come as quite a surprise if you initiated a transfer-in, only to find it couldn't go through, and it could cost you time/money.

It seems likely that the same thing could happen with RSP/RIF.

This may also be the practice at some other FIs. I don't know. But it's something to be aware of. We suggested they notify members when an account is to be closed, but doubt this will happen.

So much for trying to plan ahead! sf-frown

January 3, 2018
11:01 am
Nehpets
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Thank you for the heads up, Loonie! I've begun a similar process with Hubert, so knowing this can happen is valuable information.

I opened a TFSA there as the landing point for incoming transfers, to ultimately transfer to a TF GIC....so I will monitor the accounts closely.

One would expect a notification of pending account closure, since the only service charge they impose is for an inactive account (six months).

Stephen

January 3, 2018
12:15 pm
Yatti420
Canada
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I believe Hubert has a 6 month inactivity period with a zero balance.. After that they close your account..

January 4, 2018
7:32 am
SavingIsGood
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Yatti420 said
I believe Hubert has a 6 month inactivity period with a zero balance.. After that they close your account..  

That is correct BUT! they send you an e-mail and if you reply or contact them, they will not close it.
And that is related to 'membership'. Quote: 'We define an inactive membership as an account that has no member driven activity and has a balance of less then $1000'.

January 4, 2018
11:04 am
Doug
British Columbia, Canada
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Yatti420 said
I believe Hubert has a 6 month inactivity period with a zero balance.. After that they close your account..  

That's partially correct, although I believe it's 12 months. Mind you, you said "zero balance". I had $10-25 in my non-registered account and they sent me an e-mail & a letter after 12 months but it was easy to reactivate.

Yes, I definitely would not leave it as a zero balance, Loonie. I would leave at least $100 in any account, whether registered or non-registered.sf-cool

FWIW, it was disclosed in some fashion when I opened my account. 🙂

Also, HSBC automatically closes RSP or RIF accounts with a zero balance after 1-2 business days of being in that state and they cannot be reactivated. When I was at HSBC, we had a sole company group RRSP for its employees, many of whom withdrew their company's group RRSP contributions every month and there was notes on all the accounts, to leave at least $1.00 in the accounts to prevent automatic plan closure. I'm not sure how widespread the practice is but I would say it's "fairly common" for such plans in Canada. sf-cool

Hope that helps,
Doug

January 4, 2018
11:09 am
Doug
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SavingIsGood said
That is correct BUT! they send you an e-mail and if you reply or contact them, they will not close it.
And that is related to 'membership'. Quote: 'We define an inactive membership as an account that has no member driven activity and has a balance of less then $1000'.  

For non-registered accounts, you can also initiate as little as a pre-authorized payment or direct deposit to reactivate the account but yes, I imagine they'd reactivate it upon request, too, since that's a manual customer contact.sf-cool

Cheers,
Doug

January 4, 2018
1:37 pm
Loonie
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I understand about non-registered accounts being closed, and that makes sense inasmuch as anything does.

There was no email to suggest that this registered account would be closed.

Registered accounts are different because you must open the account before the money is put into it and set up your beneficiary, which takes time via snail mail and time to get it witnessed etc.; and there is typically a lag time before the money gets there by transfer - some take months! Further, with registered accounts, because of government requirements, it is not always possible to make a minimum deposit of $100 or whatever. It is impossible for anyone to contribute to an RIF as they can only receive transfers, for example.
We took them at their word when they said there was no minimum deposit required. I think that wording should be revised, as that is obviously not what they really mean.

January 4, 2018
1:46 pm
Doug
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I get that, but thanks for the clarification, Loonie. Did you have your TFSA open for years but was inactive or you just had it a zero balance for less than 12 months? If the latter, I'd tend to agree that perhaps some added wording would be nice. They are very accommodating to member feedback in my experience. The only thing they haven't added, of my requests, is a chequing account and a debit card and a better, more detailed customer statement. Everything else, from RSPs to credit cards to free USD EFTs, they've added. 🙂

Cheers,
Doug

January 4, 2018
2:37 pm
Loonie
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No, it wasn't open for "years". I don't remember precisely but think it was 2017, no earlier than 2016.

They didn't seem very open to this particular feedback on the phone although I agree that they are usually pretty good. They seemed more focused on this cost that they were incurring, but of course that is something we know nothing about, so it was not our focus.

I agree; their statements are a real pain to interpret!
I wouldn't be keen on chequing or debit as I think it would add costs, but I would not use them or benefit. There are lots of other places where you can get those features. The more you add, the more it degenerates into something like Meridian, which offers everything except superior rates!

January 5, 2018
2:45 pm
Doug
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Loonie said
No, it wasn't open for "years". I don't remember precisely but think it was 2017, no earlier than 2016.

They didn't seem very open to this particular feedback on the phone although I agree that they are usually pretty good. They seemed more focused on this cost that they were incurring, but of course that is something we know nothing about, so it was not our focus.

I agree; their statements are a real pain to interpret!
I wouldn't be keen on chequing or debit as I think it would add costs, but I would not use them or benefit. There are lots of other places where you can get those features. The more you add, the more it degenerates into something like Meridian, which offers everything except superior rates!  

On rates: Meridian Credit Union is not that bad, though they're not that great. They're generally better than the "Big 5" banks and HSBC Bank Canada but not as a good as, say, a Tangerine Bank or Simplii Financial in terms of GIC rates or some of the smaller credit unions. That said, I see they tend to make greater use of "investment shares" (essentially, like preferred shares of the big banks), securitizing part of their loan & mortgage portfolios and, possibly, the bond market for raising capital. I guess, in that sense, they're a bit "bank-like". Still, we have to be careful not to knock them too hard as they are investing lots of money in terms of branches, technological innovations, product improvements or new products and marketing dollars in terms for new member growth - all of which is good for the credit union and cooperative movements.sf-cool

On statements The best statements are, equally, Coast Capital Savings Credit Union and Implicity Financial/Entegra Credit Union, both of which use MemberDirect and related products such as statement production and distribution. Coast's is a touch better because they have longer character limits per line than Implicity. As much as I knock HSBC Bank Canada, I have to admit, their "beefed up" statements in recent years have greatly improved and they're near the top in terms of statement detail. Tangerine is good but trending downward due to: (a) scheduled transfers show up as a generic "transfer to internal transfers" instead of naming the account name or number to which the funds are being transferred and (b) Scotiabank ABM transactions don't state either the ABM ID number or location name nor do they even state the city name, province (i.e., location). 🙁

Cheers,
Doug

January 5, 2018
3:19 pm
Loonie
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I want Meridian to succeed too, but the CUs need to be faithful to their principles, and I find that this is becoming diluted as they try to compete with the banks - which Meridian is clearly trying to do.

I get that they are trying to draw business away from the BigBanks by simply offering better regular rates and better customer service. They don't have the rollover in staff that I get every time I walk into my TD branch, which is all to the good.

Many CUs offer those "bonds", which seem to be popular but are hard to cash.

I wish them well, but I don't think I am their target audience right now. The run-of-the-mill BigBank customer with a mortgage is their target, and I hope they draw in tons of them! The new branches are often located very close to existing BB branches and the signs are prominently displayed in their windows regarding rates.
But for a senior with no debts and money to invest, they are not a good option. I've told them what I think! I've heard nothing from them since I complained when they reduced their daily rate as BoC was raising its. My branch did offer a special day where they invited seniors in to share opinions etc, about a year and a half ago. I didn't attend, but see no results. Sponsoring sports teams does not warm my heart or insulate my pocket.

January 5, 2018
6:10 pm
Doug
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Loonie said
I want Meridian to succeed too, but the CUs need to be faithful to their principles, and I find that this is becoming diluted as they try to compete with the banks - which Meridian is clearly trying to do.

I get that they are trying to draw business away from the BigBanks by simply offering better regular rates and better customer service. They don't have the rollover in staff that I get every time I walk into my TD branch, which is all to the good.

Many CUs offer those "bonds", which seem to be popular but are hard to cash.

I wish them well, but I don't think I am their target audience right now. The run-of-the-mill BigBank customer with a mortgage is their target, and I hope they draw in tons of them! The new branches are often located very close to existing BB branches and the signs are prominently displayed in their windows regarding rates.
But for a senior with no debts and money to invest, they are not a good option. I've told them what I think! I've heard nothing from them since I complained when they reduced their daily rate as BoC was raising its. My branch did offer a special day where they invited seniors in to share opinions etc, about a year and a half ago. I didn't attend, but see no results. Sponsoring sports teams does not warm my heart or insulate my pocket.  

On sponsorships and community involvement: I hear you there! For instance, Coast Capital Savings is a title sponsor of the rather opaque Cops for Kids Charitable Foundation summer cycling tour for kids and for anti-bullying initiatives like Pink Shirt Day. That's all well and good but again, I question their choice of charity, being CKNW Orphans Fund rather than something with arguably far more benefits like Covenant House or the Boys and Girls Clubs, both of which operate homeless shelters for youth and day use spaces for at-risk youth. sf-cool

On rates and customer targeting: You're right there, to a certain extent. Still, to the CUs credit, they do at least value GIC deposits. At HSBC, we were almost made to feel as wholly inadequate for bringing in $100,000 in new-to-bank money into a long-term GIC - they wanted either HSBC InvestDirect or mutual funds, mutual funds and more mutual funds. And, Coast Capital's really trying of late vis a vis rates and in terms of matching their assets and liabilities. I'm planning a longer form post on a mini-competitive environment re: them and at least one or two other B.C. credit unions.

On GIC laddering: Thanks for your exhaustive & detailed comments on your GIC laddering strategy, or lack thereof at times. Peter locked the thread so I won't specifically comment on each of your points but you make great points and I can appreciate both your frustration with the "pain points" in government's TFSA design and also for your comments on non-registered versus registered not really effecting the "portfolio weight" to each GIC maturity or "rung" on your ladder.sf-cool

Cheers,
Doug

January 5, 2018
11:08 pm
Loonie
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I have to agree on the sponsorships. I think the CUs should be very cautious as to who they pair up with and how that group is perceived by the public. That would eliminate quite a few - including some that I would personally support. My impression is that CUs tend to support groups that are brought to their attention by members. As a member, I'd rather support what I want with my own money and with my own tax credits than have my money go to something I don't care about and get no receipt for. I am not trying to opt out as I do give significant support to charities and non-profit groups. This is something they have to do because the banks do it, I suppose. The banks actually do a lot of it. But that's a whole other topic - corporate influence through philanthropy - on which I would have a lot to say.

Sponsorship seems to be a necessary part of their marketing idea, so we are not going to change it fundamentally. If you look at DUCA, they have an interesting system where you can basically direct a gift to any charity you want., including many obscure religious ones that many of us might find questionable. Interesting model. In a way, I don't see much point in it, but it's an attempt to do things differently and gives people a sense of involvement and perhaps a motivation to bring in new members.

Seems to me, all FIs value GICs to the extent that they form profit centres for them. CUs like having money to fund mortgages. However, some things provide even more profit, mutual funds among them!

I think they need to put a lot more energy and thinking into how they can serve seniors better. Many of us have money that they want, and we are a bulging demographic. Also, many of us have children and grandchildren who look to us for advice and experience.
Even those of us who don't have kids do have charities we support or beneficiaries to whom we feel close, who may be interested in the CU. But if we don't feel we are being treated well, we are not going to tell them about it. ARE YOU LISTENING, MERIDIAN??

Glad you appreciated my comments elsewhere. It can be really difficult to know what to do in such peculiar times as these, and I distrust anyone who thinks they have all the answers!

January 10, 2018
1:51 pm
frugal lady
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Me too TSFA disappeared. Opened TFSA in Sept 2017 - had zero balance in it.
Noticed on Dec 31 2017 statement that the TFSA was not showing.
Secure chat with Hubert today to get it "reactivated".
I didnt ask for explanation. I did not receive any email about closing it. sf-frown
This is first time had anything unusual happen with Hubert.

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