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In Banking It is All Negotiable

It is important to remember that in banking it is all negotiable. As example, I got a call a while ago from a friend asking me about what interest rate that I paid on my unsecured line of credit.  I don’t discuss this kind of info with anyone other than my wife and my banker normally. Finally, I did tell this friend the rate, something I don’t normally do.

I had mentioned to this friend before the rate, so we were just checking, and then he asked how much I paid on my secured line of credit (remember the unsecured line is what the bank will loan me just on the basis of my income and good looks, the secured line is effectively a lien on my house), and I had forgotten that it was the same rate I paid on my unsecured line of credit.


In Negotiation It Is Always Give and Take

A bit of history will clarify this, back when I switched banks to Canada Trust from BMO (remember my OBG post Don’t be Afraid to Change Banks) the CT rep at the time set up an unsecured line of credit for me, and as an enticement to move to CT, he made it Prime + 1/4% (remember that is the Bank Prime not the Bank of Canada Key Index). I have used that Unsecured LOC off and on over time, but haven’t really used it too much lately. Every time I have gone to my TD branch, the rep sees this and asks me, “How did you get that rate? No one gets that rate….”. I point out that someone gets that rate, because I have it, and I laugh.

Since then TD has upped the rate for both my Unsecured and Secured to be Prime + 1/2%, and I went and complained, but to no avail, but I still have a secured and unsecured L.O.C. with the same rate (until someone from TD sees this, I suppose).

Getting back to the real story, this friend wondered how he might get that same kind of good deal, because his current credit vehicles were charging much more, and his bank was claiming no one got the rate that he remembered I got (guess his bank is wrong since I get it right now). He is going to try to get a better rate via various negotiating tactics (and keeping the I will take my business elsewhere trump card in reserve, because he is a very good client for any bank).

It is All Negotiable

This conversation reminded me that from my observations of the Banking Industry in Canada, everything is negotiable (and in fact I had an excellent comment on yesterday’s post about Cost of Cheques pointing out that I should have asked for free cheques at the local branch).

As with most consumer services Banking relies on having good clients that make the bank money, and they can fight for you if they want to. The statement by any bank employee to any request for a special service that we don’t do that is simply them saying either (i) I don’t know how to do that or (ii) I don’t think you are a good enough customer to warrant that service (in most cases). Remember this needs to be a reasonable request like:

  • Free banking (i.e. no service charges) for an extended period of time.
  • Lower mortgage rates or credit vehicle rates.
  • Lower rates for safety deposit boxes, or cheques.
  • etc., etc., etc.,

What Can you do for Me?

All bank fees are negotiableThis only can happen if the bank views you as a valuable customer. If you are a valuable customer, other banks will value you as well. Keep this in mind.

Image courtesy of Stuart Miles at

Feel Free to Comment

  1. I finally left TD Canada Trust last week and was so glad to be done with them. I found their response to everything was always “We don’t do that” (as you say), and I always heard that as “I don’t think you are a good enough customer to warrant that service” (also as you say).

    Piece by piece my business went elsewhere, and I finally closed my checking account and LOC. Felt SO good!

  2. It is a universal fact if you have a good credit history with a bank account having good average balances you would certainly get a better deal in all cases if you negotiate primarily for all forms of debt.

  3. Negotiating has worked well for me. For a couple of years I had no banking fees until last year after the market crash. They tighten the screws. Due to that, I am moving my wife’s accounts. My secured LOC was always at prime until last year again. They moved it up to prime + 1.0% but I was able to negotiate it when I found Coast Capital Savings offered a secured LOC at prime + 0.5%. My unsecured is prime + 2.0% but I don’t use it so I don’t bother with this one. I also always get 1.5% discount of the advertised mortgage rates although I now am at variable.

    It’s always good to remind us that we can negotiate and should negotiate. How much do they want our business 🙂


  4. Khaleef @ KNS Financial

    Very true. If they think you are a good customer, they will be willing to try and bend the rules for you.

  5. I had a disturbing bank encounter last week. Taking a US Dollar check to deposit in my Canadian Dollar account, I was almost duped when they told me they would give me 97 cents Canadian to the US Dollar. I actually thought the teller was mistaken. It’s an easy mistake to use the sell instead of the buy rate. The market rate should have given me about C$1.03 for every US$1.00. BUT this is a captive market and CIBC is taking 6 cents on every US$1.00 to convert to Canadian dollars! I expect other banks are doing the same. I walked away with my check and will look for a fairer rate.

  6. I bank with TD too and will be approaching them early next year for a LOC (unsecured). I am hoping I get approved and a good rate.
    I don’t think I would be lucky enough to get your rate but a point or so above it won’t kill me.

    I hate that I pay about $8 as a monthly fee for my checking account. I have a PC account but all my important bills like mortgage, insurance etc are tied to my TD account.

    Maybe when I approach them for the LOC, I will try to negotiate with them into waiving the monthly fee 🙂

    Typically I don’t like to haggle over things but more often

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