If you have a job, salaried or otherwise, you probably get paid via cheque or direct deposit. You need somewhere to keep this money because filling your mattress with cash is a terrible idea for so many reasons.
Since the creation of currency, people have needed a place to keep their money safe, and thus, the banking industry was born. I think in general people have lost sight of what a bank should be and how they work, so most people continue to pay for services they don’t use.
My advice? Move to a no-fee bank. EQ Bank, PC Financial, and Tangerine are all great choices. Most credit unions also have excellent offerings, as well. I think paying a bank is a bit absurd, because they already make money by lending your savings out. In fact, they can lend out every $1 you deposit, for almost 10 times that amount all the while they charge interest to the borrower.
Free banks still charge interest on your money, but most of them give you interest in their savings accounts. Keeping your money in a savings account with Tangerine for instance, gives you 0.8% interest which helps you fight back against inflation while you find somewhere you want to invest that money.
So here are your options:
- You could hold it in physical cash, but you lose value to inflation.
- You could pay for an account, but you’re losing money every month to inflation, not getting interest, AND you’re paying to lose money in the form of a fee.
- You can hold $3000 to $6000 in an account to avoid the fees. Again, you’re losing out on inflation and interest on that money (regardless how small, it adds up).
- You go with a no-fee bank, and get paid to park your money there. You lose only a small amount to inflation. If you have TFSA room, and keep your money in a 2% HISA, you’re making money by doing your business with that bank. THIS IS HOW IT SHOULD BE!
I’m with Tangerine and I have zero complaints after moving from a full service bank. If you decide to go with Tangerine, use my Orange Key (43631608S1) on sign-up to buy me a beer. Thanks!