Let the Bank Pay your Fees
Peter Katevatis - Sep 26, 2014
There are several realities that come with living in Canada... we pay our taxes, enjoy our hockey and beer (often together), and pay high bank fees. The strength of Canadian banks has been a big source of pride for our country. There is even a way
There are several realities that come with living in Canada... we pay our taxes, enjoy our hockey and beer (often together), and pay high bank fees. The strength of Canadian banks has been a big source of pride for our country. There is even a way to have the wonderful banks pay your fees.
I often make the analogy that bank fees in Canada are decided in one office in Toronto. The office has five doors, one royal blue, one green, one light blue, one burgundy and one red.
One key to lowering your fees is to not have multiple chequing accounts at multiple banks, choose the one you like best and keep everything there. This might mean the one you have been with longest or the one with the most convenient branch for you.
If you have read this far you are probably asking, “That’s nice, but how do I actually get the bank to PAY FOR MY FEES?”
All of the big Canadian banks are not faceless large Corporations. They have owners (shareholders) who believe in the business and push management to be profitable and return profits to them. The way to get your fees back is to BE A SHAREHOLDER too!
Canadian banks pay a dividend ranging from 3-4% at their current market prices. Historically, they have also had a positive return on capital over the long term. If you become a shareholder of the bank, in which you do most of your banking, you would get your fees paid back to you in dividends.
For example, a $10,000 investment earning 3.6% would return $360 per year or $30 per month. This would cover most high end monthly banking fees. And, if the economy continues on its growth path there is a possibility that you might also make capital gains.
The income and growth will increase your savings, lower your costs and will increase your net worth.
Let me know if you have any questions regarding this or any other strategy.