{"id":940,"date":"2016-12-22T12:42:03","date_gmt":"2016-12-22T20:42:03","guid":{"rendered":"http:\/\/letstalkaboutmoney.ca\/?p=940"},"modified":"2017-03-30T15:45:43","modified_gmt":"2017-03-30T23:45:43","slug":"the-investment-return-on-waiving-bank-fees","status":"publish","type":"post","link":"https:\/\/letstalkaboutmoney.ca\/the-investment-return-on-waiving-bank-fees\/","title":{"rendered":"The investment return on waiving bank fees"},"content":{"rendered":"

If you still use a brick and mortar bank (as I still to), then you face the annoyance of the ridiculous\u00a0‘monthly fee’ for your chequing account. \u00a0You can often waive your bank fees if you keep a minimum balance in your account, and you shouldn’t discount the return of this investment.<\/p>\n

My setup<\/h2>\n

I currently do my banking through TD Bank. While I see the value of moving to a purely online bank such as Tangerine<\/a>, I’ve got too many automatic payments (bills, pay cheque direct deposits, investments) to have made the move yet. In the meantime, I’ve been grandfathered into a Basic value chequing account that costs $3.95 per month, which is waived if I keep a minimum balance of $2000 at all times. This account offers no perks and hardly any transactions, but since I buy everything on my credit card and pay it off monthly, this doesn’t really matter. I ALWAYS keep $2,000 in this account.<\/p>\n

Couldn’t this money be better invested?<\/h2>\n

$2,000 (or whatever the account minimum is) seems like a lot of money to waive a $3,95 fee, couldn’t this money be better invested instead of sitting in a chequing account making 0 interest? As a long-term investment – probably, but as a short-term investment, no! Here are a few return on investments for a sampling of fees from the major banks:
\n

<\/div>
Bank <\/th>Account <\/th>Cost <\/th>Minimum <\/th>Total saved per yer <\/th>1-year annualized return <\/th><\/tr><\/thead>
TD <\/td>All-inclusive <\/td>$29.95 <\/td>$5,000 <\/td>$359.40 <\/td>7.199% <\/td><\/tr>
Scotia <\/td>Basic Banking <\/td>$9.95 <\/td>$2,500 <\/td>$119.40 <\/td>4.78% <\/td><\/tr>
TD <\/td>Unlimited <\/td>$14.95 <\/td>$4,000 <\/td>$179.40 <\/td>4.49% <\/td><\/tr>
Scotia <\/td>Scotia One Chequing <\/td>$12.95 <\/td>$3,500 <\/td>$155.40 <\/td>4.44% <\/td><\/tr>
TD <\/td>Everyday <\/td>$10.95 <\/td>$3,000 <\/td>$131.40 <\/td>4.38% <\/td><\/tr>
TD <\/td>Value <\/td>$3.95 <\/td>$2,000 <\/td>$47.40 <\/td>2.37% <\/td><\/tr>
CIBC <\/td>Everyday Chequing <\/td>$3.90 <\/td>$2,000 <\/td>$46.80 <\/td>2.34% <\/td><\/tr><\/tbody><\/table><\/div>
\nThe return on investment varies quite a bit depending on what your fee’s are. As for a guaranteed return on a short-term, completely risk-free investment, 2.34% – 7.19%(!), I don’t think anyone would advise you against that. If you are tied to an expensive chequing account and can’t give it up for something a little more simple, the 7.19% return on the $5,000 investment is an amazing guaranteed return.<\/p>\n

So what does this mean?<\/h2>\n

Almost every smart financial adviser will tell you that you should be keeping a rainy day fund in a safe, non-volatile, and easily accessible spot. The problem with safe, non-volatile, and accessible is they often provide very little return. That’s what makes investing a chunk of your money in a chequing account to waive your monthly fee a smart move. Everyone’s banking needs differ, but if your bank offers to waive your monthly fee by keeping a minimum balance, it is definitely something you should take into consideration as an investment.<\/p>\n","protected":false},"excerpt":{"rendered":"

If you still use a brick and mortar bank (as I still to), then you face the annoyance of the ridiculous\u00a0‘monthly fee’ for your chequing account. \u00a0You can often waive your bank fees if you keep a minimum balance in your account, and you shouldn’t discount the return of this investment. My setup I currently […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"ub_ctt_via":"","inline_featured_image":false,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"content-sidebar","footnotes":""},"categories":[24,20,17],"tags":[],"featured_image_src":null,"author_info":{"display_name":"Let's Talk About Money","author_link":"https:\/\/letstalkaboutmoney.ca\/author\/letstalkaboutmoney\/"},"yoast_head":"\nInvestment return on waiving bank fees<\/title>\n<meta name=\"description\" content=\"Don't underestimate the return of money used waiving bank fees. 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