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Which bank's LOC account can be best used as a free chequing account?

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Which bank's LOC account can be best used as a free chequing account?

Out of the big 5 bank, which one's LOC account can be best used as a free chequing account?

Meaning, for example:

- it has a chequing account-like transit number and account number (so that it can be linked with ING or PCF or Peoples Trust or whatever online bank for fund push/pull)

- it has no monthly fee

- it allows to be constantly overpaid, no limit as to how much you can overpay, and incurs no fees when overpaid

- it provides free cheques

- it can be used to receive payroll direct deposit

- it can be supplied to Hydro and Natural Gas company etc for pre-authorized monthly payment

- it can be linked to the bank card (to the "credit" slot or the "other" slot) so that you can withdraw money directly at ATM

- it can be set up as a bill payee, so you can just use bill payment to pay from a regular chequing to this LOC
Thread Summary
ace604 wrote:

Code: Select all

        Positive balance possible?
        |    Cost of cheques
        |    |      Debit card access for purchases & ATM
        |    |      |     Interac e-Transfers possible? / Fee for this?
        |    |      |     |          Routing info available (for PADs/PACs)
        |    |      |     |          |    Can pay via bill payment?
LOC     |    |      |     |          |    |        Notes
--------+----+------+-----+----------+----+--------+-----------------------
CIBC    yes  $0.00  yes   yes/$0.00  yes  no*      *Except from CIBC or Simplii
TDCT    yes  $0.00  yes   yes/$.5-$1 yes  yes      $0.50 fee for Interac e-Transfers up to $100, $1.00 otherwise
Simplii yes  $0.00  yes   yes/$0.00  yes  no
Scotia  yes  $0.00  Visa* no/na      no   yes      *ATM access via 'credit/other' (Visa cash advance), not 'chequing/savings' for POS use (can use as Visa for POS)
BMO     yes  $?     MC+   no/na      no   yes^     +ATM access via MC cash advance (free?)    ^as a MasterCard bill payment (ask for virtual MC LOC #)
RBC     no   $X     ?     ?/$?       ?    ?
306 replies
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TD's personal ULOC, HELOC, and SLOC products fit the description of all of the above.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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CIBC. That's what I use. It does all those things you want, although I'm not sure if you can add it as a payee or not. I just have my pay directly deposited into my LOC so I've never transferred money into it from another account
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+1 for CIBC. Pre-authorized debits from chequing account or reoccurring scheduled "transfers" from your chequing account as an alternative solution to "bill payee."

I am curious as to why people use LOC as a personal chequing account? Aside from people who depend on credit, what is the benefit to someone who does not rely on credit. I, for instance, use my credit card for all purchases and bill payments and then pay off the credit card at the end of the month...resulting in zero interest paid. Is having a LOC as a personal chequing account any beneficial for me? Thanks!
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Aug 3, 2006
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Mark77 wrote: TD's personal ULOC, HELOC, and SLOC products fit the description of all of the above.
+1
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demzie wrote: I am curious as to why people use LOC as a personal chequing account?
To save fees. For overdraft protection without having to pay the big service charges. To instantly obtain funds from cashed cheques instead of waiting on hold periods. And some people use their LOC's to leverage their overall investments.

As interest rates rise, perhaps having a cash 'savings' account that pays interest might begin to be attractive. But at the contemporary 0% or 1% rates, forget it. I'd rather take my savings and buy stocks, gold, etc., than have it sit in a bank being devalued.
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Dec 31, 2011
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ETOBICOKE
Will TD cancel the LOC if you carry it positive all the time ?
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trollant86 wrote: Will TD cancel the LOC if you carry it positive all the time ?
Doubtful. They're making $$$ on using your money without interest. The only scenario I could see them cancelling it is if you were to constantly use it with barely a credit or debit position. But even then, I've never heard of it happening. Just like CC's that people rarely use don't tend to be cancelled either.
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TD for all the listed requirements.

CIBC and PCF for except this one:
it can be set up as a bill payee, so you can just use bill payment to pay from a regular chequing to this LOC
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demzie wrote: I am curious as to why people use LOC as a personal chequing account?
If you have pre-authorized debits from your account, it can protect you from NSF.

For example, the next time Bhell makes a "billing error" takes out a lot more than they're supposed to, it won't cause 4 other payments to bounce, racking up another $200-300 in NSF/overdraft.
This is why I used my chequing account as the "inbox" and PC Financial LOC as the "outbox".

BTW, OP, the PC Financial LOC meets all the requirements you listed.
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Are you asking about an unsecured LOC or a HELOC? If HELOC, National Bank's is so similar to a chequing account that they don't even call it a LOC. They just call it a chequing account.

It fits almost all of your criteria except:
- cheques are not free
- by default, it links to the bank card as "chequing", not "other"
- I don't know if you can do bill pay into it, but you can do transfers in and out the same way as any other chequing account
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Dec 26, 2013
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Using a line of credit as an account doesn't make sense for a lot of people. I have a free banking account and with the exception of one bill everything that is pre-authorized goes to a credit card. If it all went through my chequing, I'd be losing out on points. I definitely don't write cheques because I'm not over 50 year of age. The one bill that comes out of my chequing I don't worry about NSFs with. Why? Shocker, I manage my funds.

As for holds, I don't have to worry about those since I don't spend money quicker than I get it.
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Mindfulmonkey wrote: Using a line of credit as an account doesn't make sense for a lot of people. I have a free banking account and with the exception of one bill everything that is pre-authorized goes to a credit card. If it all went through my chequing, I'd be losing out on points. I definitely don't write cheques because I'm not over 50 year of age. The one bill that comes out of my chequing I don't worry about NSFs with. Why? Shocker, I manage my funds.
Um. A lot of bills cannot be paid by credit cards. If you want to pre-authorize, it is only through bank accounts debits. Your only other options are to send cheques or (maybe) manually pay though online banking.

For example, I cannot pay the following through CC, at least not without extra fees:
Electricity
Property Taxes
Condo Fees
Mortgage
Car Insurance

Of course, once something is pre-authorized on your bank account, the possibility is that they might have a billing error and withdraw the wrong amount. This could cause you to unexpectedly have a lack of funds, leading to NSF when you least expect it.

This is why I use an LOC at the financial "outbox" - it protects me from all but the largest billing errors.
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Yeah not only that, but if there is a major/epic screw-up at the bank, you can simply not pay the LOC (after informing them of such), and force the bank to sue you. In your Statement of Defense, point out the screw-up.

While if you do everything out a chequing account, they have your money, and there's nothing to do unless you sue the bank.
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[OP]
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Thanks guys.

From what I know:

RBC - doesn't allow positive balance, doesn't have unlimited transaction, etc, so big NO

BMO - acts more like a mastercard account rather than a chequing account, and carries a mastercard number, so can't be linked with other online banks, can't be used for pre-authorized payments (because no regular chequing account number), so big NO

I guess I'm just deciding between TD and CIBC.
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May 11, 2012
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This setup would be interesting. So to confirm - TD loc would also provide free unlimited cheques, meaning someone with an LOC and requires free cheques (ie PC financial) could replace 2 accounts to 1?

Thanks
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Mindfulmonkey wrote: Using a line of credit as an account doesn't make sense for a lot of people. I have a free banking account and with the exception of one bill everything that is pre-authorized goes to a credit card. If it all went through my chequing, I'd be losing out on points. I definitely don't write cheques because I'm not over 50 year of age. The one bill that comes out of my chequing I don't worry about NSFs with. Why? Shocker, I manage my funds.

As for holds, I don't have to worry about those since I don't spend money quicker than I get it.
It makes just as much sense as having a free chequing account. I don't see how it doesn't make sense when I can get everything a bank account has to offer, but I can get it for free. I rarely write cheques, but the odd time I do need one. It's nice to get them for free
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Dec 26, 2013
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Jucius Maximus wrote: Um. A lot of bills cannot be paid by credit cards. If you want to pre-authorize, it is only through bank accounts debits. Your only other options are to send cheques or (maybe) manually pay though online banking.

For example, I cannot pay the following through CC, at least not without extra fees:
Electricity
Property Taxes
Condo Fees
Mortgage
Car Insurance

Of course, once something is pre-authorized on your bank account, the possibility is that they might have a billing error and withdraw the wrong amount. This could cause you to unexpectedly have a lack of funds, leading to NSF when you least expect it.

This is why I use an LOC at the financial "outbox" - it protects me from all but the largest billing errors.
Um, did you read my post?
If that happened, simply get the NSF reversed and continue on with life. It takes 3 minutes on the phone.

You know you could, actually have a decent balance in your account too. That would protect you from NSFs. Don't leave it down the last 3 dollars. Again, I only have one bill that comes out pre-authorized and I've never experienced any error on their end.

How often are you experiencing billing errors in the hundreds or thousands of dollar range anyway?
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Oct 21, 2005
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Mindfulmonkey wrote: Um, did you read my post?
If that happened, simply get the NSF reversed and continue on with life. It takes 3 minutes on the phone.

You know you could, actually have a decent balance in your account too. That would protect you from NSFs. Don't leave it down the last 3 dollars. Again, I only have one bill that comes out pre-authorized and I've never experienced any error on their end.

How often are you experiencing billing errors in the hundreds or thousands of dollar range anyway?

It is a hit or miss to ask the bank to waive NSF fee. When I still had chequing account, I didn't leave only the last 3 dollars on it. I left more like the last $1500 on it to safe guard against NSF + to waive the monthly fee. If it falls below $1000, I would have to pay service charge. I could call to ask TD to reverse. It is easier with line of credit. Freedom.

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