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Depositing cheques by iPhone

ING-DirectIn the USA, people have been able to clear cheques electronically since 2004 – but for Canadians, that technology has just become available. Yeah, we’re a little far behind. :)

Last week, ING Direct finally launched their Cheque-In feature with the existing mobile app, and I am so excited to be able to deposit cheques just by using my iPhone (but you can also use it on an iPad, Android, Blackberry, or Windows tablet).

This is a huge step forward in the way we bank, especially since I still write and receive cheques regularly. In fact, according to a recent poll by ING Direct, over half of Canadians (55%) still deposit at least one cheque per month into their bank account, and they do this by ATM (71%), bringing it into a branch (41%), or mailing it in (1%). Being able to deposit cheques with my phone makes it less likely I’ll ever need to go into a branch again. Plus, I can be putting my money to use almost immediately – earning interest, or paying bills.

All you have to do is take a picture of the front and back of the cheque – and you’re done! Then you just have to wait for an e-mail that confirms your deposit has gone through.

The only complaints I have are:

  1. When I first used the app, there was a daily deposit limit of $1,500. Apparently since then, it’s been upped to $20,000/day for me. 
  2. They don’t accept U.S. dollar cheques. Which, to be fair, ING never accepted (unless you have a U.S. dollar account). That’s why I’m glad I have my PC Financial account still – they accept U.S. dollar cheques deposited into my Canadian chequing account.

Have you ever deposited a cheque by smartphone before? Does your bank offer this feature?

And speaking of ING Direct, did anyone see this awesome clip of Peter Aceto on The Daily Show a few days ago? It’s pretty hilarious.

http://youtu.be/01hKpvaOWkY

How to tell if it’s time to switch banks

Switching banks can be a huge hassle, which is probably why we rarely do it unless absolutely necessary. Sometimes we leave due to poor customer service, and other times it comes down to dollars and cents. Although, I know so many people who hate their bank, but because it actually requires doing something to make a change, they never do.

Some people remain loyal to their bank for life (like my parents), but with so many different financial institutions available to you, there is absolutely no need to stay if you don’t think you’re getting the service you deserve, and at the price you want to pay! Banks are a business, and you should always be on the lookout for the best deal possible.

Here are a few things to consider when choosing a new bank:

Bank fees

If you’re paying bank fees for a service that can be obtained for free somewhere else – like monthly account fees, debit card transaction fees, cheque ordering, or other miscellaneous banking charges – it might make sense to start thinking about leaving your bank.

Up until I graduated college, I did all of my banking at TD Canada Trust. Because I was a student, my chequing account was free, and I had basic services like a savings account, line of credit, and a visa card. It wasn’t until I graduated that I learned I would need to start paying $12.95/month for my chequing account.

However, most financial institutions that charge a fee for their chequing account will usually waive the cost if you keep a minimum monthly balance. For example, TD would waive the $12.95 fee if I kept a minimum of $3,000 in my account at all times. But as a recent graduate, I didn’t (and still don’t) have an extra $3,000 that I can have siting in an account not earning interest. Granted, interest in savings accounts are minimal right now, but something is better than nothing.

So, desperate to avoid paying banking fees, I moved over to PC Financial‘s free unlimited chequing account. That was over 5 years ago, and I have saved over $775 in banking fees alone just by making the simple switch. Since then, I have also opened up a second chequing account with ING Direct. ING offers things that PC doesn’t offer, so when I need to utilize those services, I initiate a free money transfer, and use ING instead. (If you have yet to sign up for ING Direct, consider using my Orange Key for a $25 bonus: 30874855S1)

Customer service

When you put your hard earned money into the hands of a financial institution, you have to be able to trust them. Whether it’s a bad experience with one particular employee, a pattern of poor customer service, or unacceptably long telephone hold times every time you call in, if you aren’t comfortable using their services, it’s time to take your money and run. The runaround I got with TD Canada Trust last year was one of the worst customer service experiences of my life. Nobody knew how to help me, I kept getting passed back and forth between customer service and the branch – and nobody once offered me a solution.

Social Media

I’ve actually proactively opened up an account with a bank because of their actions through social media. ING Direct is a great example of a company that gets how to market their financial products to those engaged through social media. They understand that in order to gain the trust of potential customers online, they have to become part of the conversation and part of the community. Because of their terrific customer service and social media influence, I now have a chequing account, three savings accounts, and a TFSA account with them.

Convenience

If your bank is not conveniently located, it makes perfect sense to switch to one that is. Perhaps you first chose your current bank because it was closest to your house. But over the years, you’ve moved to an area with no branch close by.

Convenience can also vary between distance to your nearest branch, to the services offered by the bank itself. If you need business accounts, 24-hour ATM access, online banking, mobile apps, or more personalized service, finding a bank that fits your needs is crucial. Sometimes we can get so stuck in a routine that we forget there are other options available out there that will help us increase our daily productivity and lower our frustration levels.

Interest rates

When you deposit your money into a savings account with a low interest rate, you are potentially losing out on free money. TD Canada Trust’s Every Day Savings Account earns 0.25% for balances up to $5,000 (0.50% for anything above that), and their “High Interest” Savings Account earns 0% for anything under $5,000. Meanwhile, ING Direct offers 1.35% with no minimum balance required.

Once I was speaking with a friend who had about $4,000 in a “savings” account that offered 0.05% interest. Yes, you read that correctly. 0.05%. I asked why she didn’t move her money to a bank with a higher interest rate (at that time, PC Financial was offering 4% interest), and she replied by saying “I don’t need the money.” Um, what? The comment just destroyed me. Apparently I found the one person in the world who doesn’t like free money. :)

Why you shouldn’t switch banks

While it’s a good idea to do research and know what other banks are offering, you might find that what you currently have works for you. Additionally, you should always ask your current bank what they can offer you to keep your business. A major benefit of staying with a bank is maintaining a long account history. Sometimes it’s easier to get what you need – like a loan – when the bank can see that you have a long-term account that is in good standing.

I personally have absolutely no loyalty when it comes to banks, and have accounts with PC Financial (chequing/savings/TFSA/credit card), ING Direct (chequing/savings/TFSA), TD Canada Trust (line of credit/RRSP/TFSA), VanCity Credit Union (mortgage), and CIBC (credit card). It all comes down to dollars and cents to me, and it’s worth the hassle of switching banks every few years if it means that I’m getting the most for my  money.

What are some of the reasons you’ve switched banks for?

Understanding foreign currency conversion fees

It is extremely important to understand foreign currency conversion fees – which is how much your debit and credit cards will charge you when you use them outside of Canada. Even though I travel to the USA often, I never really took the time to research into just how much using my credit card was costing me. So save yourself some money by spending a few minutes calling the number on the back of each credit card. Have them explain the fees and currency conversion amounts to you.

A foreign currency conversion fee is charged to consumers to help offset the cost incurred by credit card companies and the bank, since international transactions are more expensive to process than domestic transactions.

For example, with my MBNA Platinum Plus MasterCard (still the greatest credit card in the world, BTW), all transactions made in a foreign currency will be converted to Canadian dollars. Then, an amount equal to 2.5% of the converted transaction amount will be added to the total.

Meanwhile, my President’s Choice Financial (PCF) MasterCard first converts all foreign transactions into U.S. dollars, and then into Canadian dollars, before charging a 2.5% foreign currency conversion fee.

Aside from credit cards, my options are using my ING Direct or PC Financial debit cards. You will not be able to make individual transactions at stores with either debit card, but you can use them both to access your money through bank machines.

PC Financial charges $3 per withdrawal from bank machines located outside of Canada. In addition, they also charge a fixed rate of 2.5% of the converted amount as their foreign currency conversion fee.

ING Direct, on the other hand, charges $2 for each withdrawal from foreign bank machines, but does not charge a foreign currency conversion fee.

The picture in this blog post shows the only things I carry in my wallet: ING Direct debit card, MBNA MasterCard, Bahn25 discount train card, and driver’s license. I also carry my passport at all times, as well as my NEXUS card – not that it helps me at all over here. My PCF MasterCard, PCF debit card, and any other cards I have are kept locked away in the apartment.

Aside from understanding the foreign currency conversion fees associated with both your debit and credit cards when traveling abroad, here are some tips to help keep you safe and save you money:

Inform your credit card company of your travel plans. Nothing would be more frustrating than having your credit card declined and suspended for suspicious use, because you didn’t take the time to let the card issuer know of your overseas travel plans.

Avoid Dynamic Currency Conversion. Foreign merchants will sometimes try to take advantage of tourists by offering to quote the final price of your purchase in U.S. dollars, instead of in the local currency. The exchange rate is selected by the merchant, and is usually much higher than your credit card. Make sure you know the currency conversion rates before you buy anything. Or, you can download a smartphone app that will do the conversion for you.

Double-check your card expiration date. Your trip could take a serious nosedive if you suddenly discover that your credit card is set to expire while you’re traveling. Contact customer service to see if they can issue you a card with a new expiration date, or mail you a new card to your address abroad, closer to when the card will actually expire.

Stick to using one credit card (but bring a back-up). Using a single credit card will make it easier for you to track your spending while you are away. But, you should also bring a back-up credit card just in case of an emergency – such as, your credit card being suspended, or losing your wallet. The back-up card should be stored somewhere else besides your purse or wallet – like in a safe in your hotel room, or in a money belt if you need to have it with you.

What tips do you have for using your credit and debit cards abroad?

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