Canada's BEST and WORST Consumer Banking Rates and Fees Experiences

motusbank provides the Best Consumer Banking Rates and Fees Experience in Canada

It was not that long ago that consumers chose a banking partner mainly due to location and proximity to where they lived or worked. In those pre-internet times, a consumer typically had a few big banks to choose from and possibly a credit union to consider depending on the size of the city or town or where they worked. Fast-forward to the electronic, or digital, age of consumer banking and the list of potential consumer banking firms rises considerably. Today's digital access landscape is all about choice as the number of firms seems endless at times with traditional bricks and mortar banks and credit unions, secondary discounted branchless offerings by those same firms and the availability of pure digital neo bank offerings who only service customers electronically. It is time for the consumer to recognize those choices and break the generational pattern that they understand or at minimum, increase the number of relationships for the best overall experience. #ChoiceChoiceChoice

The banking industry was initially built on trust and personalized service but unfortunately with choice comes a barrage of marketing targeted at different consumer segments. The messages differ depending on those segments as consumer life cycles drive the need for different product and services to compliment the basic ones. There is no doubt that electronic, or digital, savvy has led to an increased effort by all consumer banking firms to market the newer and younger money. The big banks and credit unions want to ensure they do not lose generational money while the new banks want to start their own generational loyalty. The 2022 Rates and Fees analysis confirmed a few things. One, less competitive rates and higher fees at the big banks explain the year-over-year record profits. Two, the credit union system loves to sit in a defensive maintain assets and offer slight differences position when it comes to rates and fees. And lastly, neo branchless digital consumer banking platforms, no matter who owns them, tend to offer the best overall rates and fees as the top seven firms in the 25-firm study, fit the profile. #DoWhatsBestForYou

COMPLETE 2022 RATES & FEES EXPERIENCE RANKINGS

Go to Key Findings

Go to Lessons Learned

Go to The Bottom Line

The BEST and WORST Firms - By CATEGORY

The depth of any Surviscor review translates to an environment of tough marking and firms being required to earn rankings. Ranks are not given to firms by sponsored ghost writers or false marketing pieces and messages. In addition to being tough, Surviscor will also give credit where credit is due. The hope is that all Canadian consumers hold their banking partner accountable to provide ultra-competitive rates and fees that match, or closely match, the best firms in each category.

2022 is the inaugural year for the stand-alone Surviscor Consumer Banking Rates and Fees Experience review. Prior to 2022, the results were embedded in the Online Banking review, but the goal remained the same, to establish the Best and Worst firms for Rates and Fees when there is an opportunity to measure each firm against one another in like product and analytics. The areas of review include a look at five main products sold in Canada including chequing accounts, savings account, registered accounts, GICs/Term Deposits and Mortgages. The following tables provide a quick look at the best and worst firm in each category:

CHEQUING ACCOUNTS

The category audits the transaction-based monthly account fees and interest rates associated with cheapest chequing account at each firm.

The following firms do not offer Chequing Accounts:

• EQ BANK
• PC FINANCIAL

SAVINGS ACCOUNTS - NON-REGISTERED

The category audits the various transactional fees and interest rates associated with the standard non-registered savings account at each firm. This is the only category where all firms offer the product.

REGISTERED ACCOUNTS

The category audits the amount of interest earned on both an average TFSA and RRSP deposit account based upon an average account balance.

The following firms do not offer interest-based Registered Investment Accounts

• PC FINANCIAL
• COAST CAPITAL SAVINGS: Registered accounts are available but require an investment choice instead of providing guaranteed interest with no time periods

GICs/TERM DEPOSITS INVESTMENTS

The category audits the amount of interest earned on a GIC / Term Deposit Investment based upon both short-term and long-term maturities and various investment amounts.

The following firm does not offer GICs/Term Deposits:

• PC FINANCIAL

MORTGAGES

The category audits the amount of interest paid on both fixed and variable rate mortgages with <25-year amortizations based on posted rates and various principal investment sizes.

The following firms do not offer Mortgages:

• EQ BANK
• PC FINANCIAL
• MOTIVE FINANCIAL

KEY FINDINGS

The 2022 Consumer Banking Rates and Fees Experience review produced some interesting findings. Here is a quick look at the key points of discussion:

• BRANCHLESS-NEO BANKS account for the TOP 7 BEST FIRMS
• motusbank outperforms all firms by 15 percentage points
• strong>ALTERNA BANK, a branchless firm, ranks 2nd despite poor digital platforms
• BIG BANKS failed to score above 30%
• Only 2 BIG BANKS, BMO BANK OF MONTREAL and SCOTIABANK, placed in the top 15
• TD CANADA TRUST (22nd) and CIBC (Last), placed outside of the top 20
• Branch-based CREDIT UNIONS failed to score above 50%
• HSBC CANADA is the WORST non-Big Bank
• BMO BANK OF MONTREAL has 97 small-print legal notifications

LESSONS LEARNED

Consumer Banking is one big maze of information overload and what a consumer sees, is not always what is really happening. The Rates and Fees high-level lessons to be learned are as follows:

Rates and Fees are an Organized Mess

Finding a firm's full suite of products and services and the associate rates and fees that come along with them can be a daunting task. The easy to find rates provide the banking firm's marketing hooks while the standard rates may take some digging. The associated product, and account fees, are usually more difficult to find but are key to understanding what a firm has to offer. Defined internet searches will help find the data. #TheHiddenGems

Chequing Accounts, not Savings, are the Transactional Accounts

Consumer banking firms have long been warning of the demise of cheques, but the truth is, a consumer better have a chequing account if they plan to perform day-to-day transactions in an account. The research indicates that outside of a few neo banks, no-fee savings accounts are not designed to allow consumers to perform day-to-day transactions without incurring huge fees. In most cases, firms charge between $1-$5 for debit card purchases and bill payments and $1-$1.50 for Interac money transfers. Be careful with savings accounts. The $0 fee quickly adds up to big fees with utility payments and daily debit card usage that has replaced cash transactions. #SaveNotTransact

Posted Dates for Rates and Fees are Usually Not Updated

It is an amazing fact that if a consumer goes on individual firm websites on the same calendar day, the consumer will find 80% of the sites will have different effective dates for the posted rates. Even account-related fees, which tend to be noted in larger stand-alone schedules, are usually posted with non-so-recent dates. It is imperative that the consumer question the rates and fees if the dates shown are obviously not recent. #RatesNotUpToDate

Differentiation is Usually Found in the Smallest of Details

Marketing is a world of fine print with not-so obvious messaging that can lead to confusion to help sell a product or service. The key consumer warning is to understand that if a deal appears too good to be true, it usually is. The reality is that with today's historically low interest rates, there is little to differentiate one firm to another unless the stakes are high. Look into the finer points of each advertised deal and use firm comparison tools to narrow down choices. #DevilInTheDetails

Negotiate Larger Accounts or Investments

Most consumer banking firms' rebuttal to reviews like this one is that the review is only based on posted fees and there are more competitive fees offer to existing customers. The opposite logic is also played by existing customers who feel that the new customers are getting better rates and fees to get them in the door. The reality is that every consumer can negotiate whatever they want and there is wiggle room within the system. The unfortunate reality is that those meetings will lead to firm representatives up-selling additional products and services, especially when a consumer has money to dictate the relationship. #WorthMoreGetMore

Go back to the 2022 Rates & Fees Experience Rankings

THE BOTTOM LINE

Finding, then acquiring, the best suited rates and fees for a consumer's desired products, amongst the dozens of available consumer banking firms, is by far not an easy task. The question that becomes apparent is why is it such a maze of confusion along with smoke and mirrors? The answer is marketing products and services is like a game to consumer banking firms, big and small. The smaller firms must be aggressive to gain traction and do so with flashy sites and big announcements. Larger firms market the whole experience of being a customer and entice customers with additional add-ons to mostly distract from the less competitive rates that they offer. The bottom line is a consumer needs to go into the exercise with an educated plan that fully defines the consumer's current situation and needs. Then the key is to understand that there are dozens of firms to choose from to acquire the highest rates and lowest fees but always be aware of the details that are not front and centre. #BewareTheSmallPrint

The Surviscor DISCLAIMER

Surviscor takes the ultimate pride in being tough markers and having zero bias in calling-out any firm for both good, and poor, experiences. Identifying firms that offer best-of-breed, industry-leading products, and services to deserving customers is the mandate. Canadians work hard for their money and having a great consumer banking financial partner is not a privilege. Banking firms do very well by Canadian consumers and should be held accountable to the highest standards of customer experience and cost of services. Do not forget that the consumer holds the cards, not the banking firm. There are many firms, big and small, to choose from. Then there are the posted rates which could be real, or promotional or even simply special for new customers only. Then there are firms like BMO Bank of Montreal who has 97, yes ninety-seven, legal disclaimers or fine=print details to outline its products and services. #FindTheRightFirm

Learn More about Canadian Consumer Banking Experiences:

Consumer Banking Service Experiences: 2021 Consumer Banking Service Level Experiences

Online Banking Experiences: 2021 Online Banking Experiences Review

Mobile Banking Experiences: 2021 Mobile Banking Experiences Review