Advantage of banking with a large bank?

[nwwong]

I've had a Royal Bank account since I was a teen but as a student, switching to PCF was for my banking was an obvious choice because of zero fees. I still have my RBC account that's is rarely used on a "pay per use" type account so I don't have to pay any monthly fees. The advantages of PCF vs the big banks (RBC, TD, BMO, Scotia) are pretty clear: low fees, high interest. But I have read here and there that there are advantages of banking with a big bank. I'll be entering the work force in a year and may end up buying a car, or getting a house etc soon after.

With this in mind, what are the advantages of banking with a big bank versus sticking with PCF.

[Caillo]

I've had a Royal Bank account since I was a teen but as a student, switching to PCF was for my banking was an obvious choice because of zero fees. I still have my RBC account that's is rarely used on a "pay per use" type account so I don't have to pay any monthly fees. The advantages of PCF vs the big banks (RBC, TD, BMO, Scotia) are pretty clear: low fees, high interest. But I have read here and there that there are advantages of banking with a big bank. I'll be entering the work force in a year and may end up buying a car, or getting a house etc soon after.

With this in mind, what are the advantages of banking with a big bank versus sticking with PCF.

Unless you have really unique transaction needs, which PCF can't meet or can't meet cheaply, or run a business, there are zero advantages in my point of view.

The whole argument of: "You need to build a relationship with your bank to get a good mortgage rate" is totally over-rated: if you have good credit and have a decent job (i.e. can show your ability to repay), you're gonna be able to get a mortgage anywhere at their low rates. PERIOD.

[Whitedart]

I've had a Royal Bank account since I was a teen but as a student, switching to PCF was for my banking was an obvious choice because of zero fees. I still have my RBC account that's is rarely used on a "pay per use" type account so I don't have to pay any monthly fees. The advantages of PCF vs the big banks (RBC, TD, BMO, Scotia) are pretty clear: low fees, high interest. But I have read here and there that there are advantages of banking with a big bank. I'll be entering the work force in a year and may end up buying a car, or getting a house etc soon after.

With this in mind, what are the advantages of banking with a big bank versus sticking with PCF.

You do know that PC Financial is a division of CIBC don't you?

[nwwong]

You do know that PC Financial is a division of CIBC don't you?

Not quite a division. It's a joint venture between CIBC and Loblaws. However I wouldn't be able to get CIBC products through PCF so I consider them separate.

I was thinking along the lines of whether a relationship with large full service bank has any benefits.

[angel_wing0]

With this in mind, what are the advantages of banking with a big bank versus sticking with PCF.

there are zero advantages in my point of view.

The whole argument of: "You need to build a relationship with your bank to get a good mortgage rate" is totally over-rated: if you have good credit and have a decent job (i.e. can show your ability to repay), you're gonna be able to get a mortgage anywhere at their low rates. PERIOD.

nicely said, as i believe the exact same thing as well.

The only adv i would say is the long hours of td branch, and that it's easier to fine one than the other banks.

[YYZFA]

It must be the end of the month, because this topic comes up like clockwork. There are many people who see many advantages to both types of banking. If you are with a no-frills bank and haven't missed anything, then you're with the right bank.

There is no shortage of opinion on this debate in this forum. For a quick answer do a search and you'll find just about every opinion possible on the subject.

[CCCC3333]

I was a teen but as a student, switching to PCF was for my banking was an obvious choice because of zero fees

Most of the big banks have free student accounts.

[Billwill]

Most of the big banks have free student accounts.

Big banks offer a feeling of security.

We'll likely see a bunch of US bank runs, so knowing you are with the Royal or whatever can be a psychological advantage.

[angel_wing0]

Big banks offer a feeling of security.

WHAT feeling of security if i may ask? it's not like the smaller banks are not insured by cdic. Or is it just sacarasm?

[the_unknown]

WHAT feeling of security if i may ask? it's not like the smaller banks are not insured by cdic.

Exactly what I'm thinking. If you're really freaked out, then just don't put over $100K in anyways.

I don't use PC, ING or the like for personal reasons. I prefer personal service, visit the branch more often than an average person and have extended financial needs (like foreign currency, international banking)

[Billwill]

Only psychological.

A feeling of support from BIG brother.

Nothing more.

[ns_guy]

I would agree with the majority of the posts here. If you don't miss any of the banking services that the "Big Banks" offer, then stay with what you have. I've never had a PCF or similar type of free bank account, can those of you that have had problems with them tell me how quickly they got resolved and how easy it is dealing with a problem on the phone/by internet? The main upside I see of the bigger banks are:

-Financial advice in person, I don't like talking business over the phone that much (personal preference). Plus, once you find somebody you can deal with well, you can stick with them.
-Problem resolution; much easier to deal with problems with a single person at a branch, as opposed to getting somebody else everytime on the phone who doesn't know what's happening.
-Complex transactions easier to do in branch I'm thinking - I imagine sending wires, foreign exchange, drafts/money orders etc. easier to do.
-When you need credit quickly, branch is probably a bit quicker. Anybody have experience getting a secured line of credit over the phone with PCF or some other "free" bank? How long did it take, was the process easy etc.?
-Tie-in to other bank services, ie: brokerage accounts, mutual fund accounts, so you can transfer money between bank account and investment accounts and get your "full-service banking" at one place only.

Obvious downside: interest rates (bank accounts, GICs etc. generally lower).

[the_unknown]

I would agree with the majority of the posts here. If you don't miss any of the banking services that the "Big Banks" offer, then stay with what you have. I've never had a PCF or similar type of free bank account, can those of you that have had problems with them tell me how quickly they got resolved and how easy it is dealing with a problem on the phone/by internet? The main upside I see of the bigger banks are:

[...]

Obvious downside: interest rates (bank accounts, GICs etc. generally lower).

You've hit the nail on the head with most of these points. I prefer a one-stop financial solution, but I guess I can't really use this excuse as I bank with more than one of the big 5.

I mean, more power to those who PC meets their needs well- but some need to realize it isn't for everyone, and that people who don't bank with PC are not money-wasting morons (for the most part). With RBC I get GIC rates that are better than virtual banks based on the "relationship value", I pay no service charges and get the full-service package. It's just a personal preference talking to a human being in person rather than some call centre.

Some people have said PCF's service is crap, but the benefit of no fees outweigh the small possibility you will have a problem and have to call customer service. One thing often complained about are the limits and holds that PCF has. For the average person who just gets their payroll, only uses an ATM, Direct Payment or CC has no need for anything else other than PC.

[Caillo]

I would agree with the majority of the posts here. If you don't miss any of the banking services that the "Big Banks" offer, then stay with what you have. I've never had a PCF or similar type of free bank account, can those of you that have had problems with them tell me how quickly they got resolved and how easy it is dealing with a problem on the phone/by internet? The main upside I see of the bigger banks are:

-Financial advice in person, I don't like talking business over the phone that much (personal preference). Plus, once you find somebody you can deal with well, you can stick with them.
-Problem resolution; much easier to deal with problems with a single person at a branch, as opposed to getting somebody else everytime on the phone who doesn't know what's happening.
-Complex transactions easier to do in branch I'm thinking - I imagine sending wires, foreign exchange, drafts/money orders etc. easier to do.
-When you need credit quickly, branch is probably a bit quicker. Anybody have experience getting a secured line of credit over the phone with PCF or some other "free" bank? How long did it take, was the process easy etc.?
-Tie-in to other bank services, ie: brokerage accounts, mutual fund accounts, so you can transfer money between bank account and investment accounts and get your "full-service banking" at one place only.

Obvious downside: interest rates (bank accounts, GICs etc. generally lower).

I'm gonna give my opinion on each of the points you raised:

1. By financial advice do you mean investment advice? If so, you don't need to bank with TD, RBC, etc. in order to take advantage of their investment services.

2. Problem resolution: I'm not really sure with this one. I've been with PC for about 2 years and haven't had a problem yet so I'm not familiar with how quickly they would resolve issues. However, I will say this, I had a question about my savings account once and when I called PCF they were quick, courteous and very professional. Furthermore, the person I was talking to wasn't sitting at some desk in India.

3. Completely agree with you. When it comes to the types of things you mentioned, PCF completely sux. No doubt about it. However, I, nor most people using banks, will almost never undertake such transactions.

4. Agreed with the length of time involving credit. You could probably get credit a few days quicker then with a brick and mortar bank. But, in general, you are also going to pay higher interest on that credit. Not worth the extra interest payments for me to get credit more quickly.

5. I guess I agree with you on this one. But at what price does this come at? Transaction fees, minimum balance requirements, terrible interest rates. Is that really worth it, just to have all of your financing under one roof??? I personally do my banking with PCF and investing with another institution and have had no problems whatsoever.

6. Agreed. The rates are much better

[coolspot]

WHAT feeling of security if i may ask? it's not like the smaller banks are not insured by cdic. Or is it just sacarasm?

But the chance of a Big 5 bank failing in Canada is very slim. Who wants to go through the hassle of a bank collapse (not that it's likely in Canada... but still).

If you have a good relationship with the PBO, you can get things done very quickly. i.e. Mutual Fund withdraws, cash transfers, new account openings, etc. the paper work can be done in a blink because the PBO knows who you are and doesn't need to verify every single detail.

Also, you have someone accountable; if things go wrong, you can pin it on the PBO With a virtual bank, who are you going to complain to? John/Jane Doe CSR?