TORONTO -- We're in the thick of second quarter earnings season for Canada's big banks.
The numbers have been impressive, and those that have reported are crushing their earnings, and expectations and profits are in the billions.
A common theme is, lenders have put aside far less cash for potentially bad loans after putting aside record amounts, bracing themselves for a wave of defaults on loans that never happened.
Now, the industry, in an indirect way, appears to be bracing for an economy that is getting ready to open back up. And, along with that, banking fees are on the rise.
At the onset of the pandemic, Canada's big banks were heroes after offering payment deferrals for loans, credit cards and, of course, mortgages. This was, in fact, for the households hardest hit, a financial lifeline when they needed it the most.
That was then, and this is now.
Banking fees across various products and financial institutions are headed higher while at the same time the banks enjoy record profits.
The little guy is feeling squeezed, frustration is growing and calls for regulation mount.
Now to be fair, any pricing changes at any time are delicate, they often happen across the industry and could prove costly to consumers. The fact is, you can really only control, for now, how you respond to the changes.
You have options, because it is your money and you have a right to be sensitive to interest rate changes and fee increases. And your money is mobile, so you have the option to move your money and seek out better banking terms for your situation.
In other words, it may be a hassle, but it isn't a monumental task to move your money from one financial institution to another if you feel enough is enough.
However, remember almost all the banks offer the same products with a big point of differentiation -- the service they can offer. How you are treated as a customer has to matter as well. It isn't always just about the fees you are paying.
Here are a few considerations:
1) Look at your banking relationship closely to ensure you are getting the service level you deserve. If you are a high value customer and conduct all of your banking with one financial institution, they have a decent share of your wallet, so try to negotiate for better terms. The answer is always "no" until you ask.
2) There are brands like Tangerine and President's Choice Financial for those who really don't need the benefit of branch banking. No branches, no tellers and no face to face service results in little to no-fee banking. Though, PC Financial also offers in-person interactions at in-store kiosks for people who have questions.
3) Increase your minimum balance to reduce costs. While it may be frustrating, it could force you to save more.
4) Use only your banking machine, limit the number of withdrawals and consider paying your bills online or via telephone banking, which could all result in less fees being paid.
5) Explore all the banking products your financial institution has to offer to ensure you have the right product for you, and consolidate where you can. You might consider taking it a step further and go to the Financial Consumer Agency of Canada, and use their interactive Cost of Banking guide to help identify the type of account that will suit you the best.
The bottom line is, our banks are strong and they make a lot of money. However, you are still the customer and you always have a choice in how you respond.
It might be time to shop around to get the biggest bang for your transaction buck.
