Vultures

I updated one of my original posts, but I still stand behind it.

One of my favorite movies is Casablanca and in that movie is a scene where a confidence trickster is talking to a couple at a cafe and he says to them,

“M’sieur, watch yourself. Be on guard. This place is full of vultures, vultures everywhere, everywhere…“

and then proceeds to take the man’s wallet. This is my view of the financial vultures (or financial institutions) in Canada.

The ING ad where the gentlemen espouses how banks kill you with service fees is so true it’s painful. Just look at some of the simple calculations you could pay to your bank:

• Interest on your Mortgage, if you are lucky enough NOT to have locked in or actually got a good rate (remember this is all NEGOTIABLE, NO ONE should take the standard rate, use a Mortgage Broker if you need to, but get a good rate), but you pay most likely $4000 or more dollars, which the Bank puts in its pocket. OK you are paying to borrow that is only fair.
• Banking fees, the best rate I have heard from one of the big banks is about $14.00 $20 a month or $168 $240 per year (this is AFTER tax money folks, remember this). That might even gorge a financial vulture.
• Oh, and if you take money out of somebody else’s ATM, that’s another $1.50 $3.00 per transaction, let’s just say you do that twice a month for the year or $72 to the bank.
• But you get paid interest on your savings, keep that in mind. Last year I received $5.00 in interest back, wow, huge! No the financial vultures haven’t changed, that is still all I make.
• What about all those great mutual funds? But they all have management charges of 3-5% of your balance PER YEAR! More money to the bank.
• Oh and if you are foolish enough to carry a balance on your credit card, they get to charge you 18% per annum interest on that! This is usury pure and simple and the government needs to deal with this type of highway robbery (loan sharks are losing business to these guys).
• If you walk up to a teller at the bank to take money out, they’ll charge you $1.50 for that too (at least TD did that to me a few weeks ago). So if you actually go into a bank it costs you money? Wow.
• Every time you use Interac, your bank makes a cut on that. Think about it, every time you spend money, your bank makes money. Man, where do I go to open a bank?
• Every time you use your credit card, your bank makes money.

What does this mean? You should invest in Banks, is what it means. All pettiness aside, banks are out to make money, and they do an extremely good job of it. What other business has eroded their service base and their public face more and still managed to make HUGE profits? Do you actually even GO to your “local” branch of your bank? Is there one around you? I go into the bank 3-4 times a year (once to check my safe deposit box, once to argue about how I am not paying their service charges, once to argue to get a lower interest rate, and once just to rant).

What can you do about this? Well here I have a few simple tips that I have saved a little money with:

1. Look for no fee banking. President’s Choice offers this (and what is funny is it is offered through the Bank of Commerce, that does NOT offer no fee banking). I get free groceries out of the deal too! I have heard folks complain about the services available, so caveat emptor here as well. Go where you get LOW or NO service fees.
2. Service fees are negotiable. If you go into your bank and point out how much money you make them, sometimes (not always) they will give you FREE banking for the year. If they don’t want to do that for you, go to point (1). Tell them you are going to another bank (but be ready to go as well, they do call your bluff sometimes), that might help get you a lower rate.
3. Mortgage rates are negotiable. Does ANYBODY pay the published interest rates? If you do, STOP, and go to a Mortgage Broker to get a better rate.
4. Don’t use WHITE ATM machines, or other banks ATM machines if you can possibly help it, or have bank accounts (with no fees) at a couple of banks and transfer money around so you don’t pay the ATM charges! At work there was a Commerce machine, but I bank at TD, so once a month I’d deposit moneys into my commerce account and took them out with no service charge.
5. Your bank is a BUSINESS pure and simple, but remember YOU are their business too. If you have been a good customer, ask them what they can do for you? If they say nothing, look for another bank.
6. MINIMIZE those service charges any way you can.

Banks are supposed to be a safe place to keep your money, make sure they don’t think it is THEIR money.

Images courtesy of Gualberto107 from FreedigitalPhotos.net