The online bank President's Choice Financial will fade to black in November. Roughly two million PCF accounts will be moved over to a new online bank called Simplii Financial, which will be run by Canadian Imperial Bank of Commerce. Here are five things you need to know if you're a PCF client, or if you're simply interested in switching to an online bank or credit union that offers no-fee chequing.
PCF was complacent
The no-fee chequing account was a great start when it was introduced almost 20 years ago, but PCF never really built on the idea. Interac e-transfers are increasingly replacing cheques, but PCF does not include this service as part of its package of free and unlimited services. Instead, you have to pay $1.50 a pop. If you're a millennial or anyone else who finds cheques archaic, that just might be a deal breaker.
CIBC is under pressure to deliver something cool with Simplii Financial
Simply put, Simplii has to be better than PCF, which was co-run with Loblaw Cos. Ltd. Otherwise, CIBC will have nothing more than customer inertia going for it in keeping PCF clients. A few suggestions for CIBC: Add unlimited e-transfers, and come up with a reasonable overdraft-protection feature. PCF charges interest on overdrafts plus $4.97 in each month where overdraft protection is used, which kind of contradicts its no-fee claim. PCF clients: Give CIBC a chance to earn your business, but have a backup plan.
PCF clients have options
To start with, there's Tangerine. That's Bank of Nova Scotia's online banking operation, formerly known as ING Direct. Tangerine has a no-fee chequing account that is very competitive with PC Financial. Tangerine also has a big business in savings accounts, but it blows on rates.
More and more credit unions are offering no-fee chequing accounts, some of them with free e-transfers. Keep an open mind on these accounts, even if you're a big-bank loyalist. Credit unions are wired into the Exchange ATM network, which means you have no-cost access to bank machines nationally. One final possibility is EQ Bank, which offers a savings account that can be used to pay bills online.
The President's Choice Financial MasterCard is a keeper
No changes will be made in this credit card, which has a customer-loyalty program offering points redeemable toward purchases at stores in the Loblaw grocery chain. There may not be a better reward program out there in terms of practicality, simplicity and value. You can check your balance and redeem points at the cash register when paying for your weekly groceries.
The name Simplii sounds a bit sillii
A made-up word as a brand name suggests a certain wishfulness about strategy. We will see how CIBC's idea of simple banking plays in the real world. True simplicity means unlimited transactions for everyday banking (including e-transfers) and no costs beyond interest charged on overdrafts. Some cool apps for encouraging people to budget and save would be great, too.