Become a Tangerine client today

In these days of COVID, many bank services are not as easy as before. We are trying to open a bank account for my son. All we wanted to do was open a Kids Savings account, that would give him a bank access card too.

Our family has done allowances this way for a long time. We automate the money going to the child, as a weekly deposit to a no fee bank account. This method worked well with my daughters.

My son, being on the autism spectrum, we weren’t sure how this would work. Happily he has asked about banking and wishes to have an allowance, so we are now trying to open a bank account for him.

Become a Tangerine client today

For Tangerine, you have two options:

  1. For a kid who is less than 16 years old you can open a straight savings account. This can be done over the phone. We didn’t want to use this because it would not include a bank access card.
  2. For a student 16 years and older they have a student chequing account. This comes with a bank card, however, my son is not old enough and he does not need chequing capabilities, yet. This is done on-line.
EQ Bank Savings Plus Account

We decided we were going to try to create a TD Kids Savings account. I called Easyline and was told this can only be done at a bank branch face-to-face. This is how we did it for my daughters. I was hoping we could do this on-line or over the phone, but no, this is not possible.

To book a face-to-face meeting with our local branch, takes at least 2 weeks, thanks to COVID. All bank branches are running with smaller staffs, and they are not open for as long. Banks are closed on Sundays, during the pandemic.

I had to wait 2 weeks to open my son’s bank account. Patience is not something my son has mastered yet, so there was a lot of nagging on his part about his bank account.

Epilogue

Finally managed to set up the account, but a few interesting new wrinkles.

  1. The account is a kid’s savings account. This type of account no longer is automatically on my Easyweb. Previously all my older kids’ accounts were visible.
  2. Still a lot of “paper” work. The amount of physical paper in the banking system must make Domtar proud.

Addendum

A few folks have asked, I had to have 2 pieces of identification for my son. In our case we used a valid passport and his birth certificate.

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Banking Security

While trying to log into my Banking Web site (from a PC), after I had successfully remembered my log-in ID and password, something different happened. The site put up a Pop-up window saying it was testing security and wanted to send me a code to my Cell phone (or call me with the code).

After my initial confusion and then annoyance, I was heartened to see this kind of security come up. Banking security is very important, and the edge of the network (i.e. users logging in) are where the system is usually the weakest. The Desjardins Data breach is a good example of the need for banking security and data security.

Good Test ?

My hope is that this is simply a test, and you will see why.

After I realized I did not have my Cell phone handy, I simply cancelled out of the Security Message screen, which then took me back to the regular bank log-in screen. I thought for a second, and decided to see what would happen if I tried to log-in again. What I saw underwhelmed me. I was able to log-in, no problem, and no “challenge”.

My sincere hope is this is simply a test by my bank, because if I have been “challenged” for an alternate log in, I should not be allowed to log in after an initial failure. The application should continue to challenge me, until I pass the challenge, or until I fail a set number of times. Once someone fails I would hope my account access would be locked.

Banking Security ?

My hope is this is my bank attempting to test out new security for authentication (without enabling 2 factor authentication), and when they do a full roll-out, the rules will be stricter. I like the concept, but if this is how it will work it isn’t a great data protection system.

More Banking Security Resources

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Exposed on Banks

Even as a simple country Index Investor (to paraphrase Bones McCoy), you need to understand the Index you invest in. If you own a TSX-based, Canadian S&P Based or Dividend Royalty based index you hold a lot of Banks.

Two examples of this are:

  • S&P/TSX Composite Index, (OSPTX) which holds 36 % “Financials“. The top 10 holdings 4 are banks (Royal Bank RY, Bank of Nova Scotia BNS, TD Bank TD and Bank of Montreal BMO).
  • S&P/TSX Composite High Dividend Index ETF (TXEI) which holds 30% “financials”. You find 4 banks in their top 10 holdings (Bank of Montreal BMO, Bank of Nova Scotia BNS, Canadian Imperial Bank of Commerce CM, National Bank of Canada NA)
exposed on banks

Why this imbalance? Banks are doing very well lately, and have done well for over 15 years.

Are banks likely to “Nortel out“, in the near future? No, but realize that you are holding a lot of Banks if you are investing in Canadian Indexes.

My problem is that I am highly exposed on Banks. From my days as a Stock holder, I still hold TD and BMO in one of my larger investing portfolios. In this same portfolio I also hold a TSX index fund, which means my exposure to banks is too large (given I may retire within the next 10 years).

As Interest Rates slowly rise to more normal rates, I should start thinking about some more stability and start building a GIC Ladder in my portfolio. I should be looking for more stability given I am within 10 years of retirement.

Treat This as Informational

I am not offering advice. I am simply pointing out that many passive investors are heavily exposed to the Financial Sector in Canada.

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How to Motivate Savings

Consumers rarely do anything unless they feel they get something out of it. I keep wondering what savings motivating system banks could put in place?

Canadians are notorious for loving rewards systems, where they can accumulate points for later purchases, maybe something like that? A points system that would pay more monthly, the more money you had in your savings account?

I think I am on to something here, if banks paid people these points that they could use to purchase things, that might motivate people to save more money.

A Savings Motivating Refinement

What if this point system allowed you to swap points for money? Better still what if you didn’t accumulate points for having more savings, you accumulated money? Money that would be added to your account balance, and then the next month you might accumulate more money because of this added money?

This is possibly the greatest idea ever to motivate consumers to save money, isn’t it?

Click here to find out more about this Interesting Idea

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I got a very good comment from someone who calls themselves Anon Banker, about the Tied Selling Banking Regulations and how that should stop banks from forcing you to have a chequing account with them if you have a mortgage with them. The Tied Selling regulation is quite clear about this:

For example, if you apply for a mortgage at a bank, the institution cannot make you buy another product or service as a condition for obtaining the mortgage.

Bank Accounts and Loans

You don’t have to open an account, but the bank may not give you a great deal either.

Luckily for the banks there is a little wiggle room, with the following statement:

However, banks (and their affiliates) are allowed to offer consumers, in conjunction with one of their products, another product or service on more favourable terms than they normally would provide. This is similar to a company offering a deal or discount to its customers if they purchase more than one item from the company. For example, if you obtain a loan from a bank to purchase a Registered Retirement Savings Plan (RRSP) investment, the bank might offer you a better rate on your loan if you also purchase your RRSP investment from them.

Better Deals if You Get an Account?

So the bank can not deny your mortgage application if you decide not to have a bank account with them, however, they can offer you a better mortgage rate if you do open an account with you. I suppose that sounds fair.

 

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