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How Do Your Service Fees Measure Up?

Just because you have a flat fee package, doesn’t mean it’s the right one for you. Flat fee packages range from $2.00 a month to over $30.00 a month, depending on the products and services included. Make sure you’re paying for what you use and not for features you don’t need.

If you have access to the Internet, Industry Canada has an interactive calculator that allows you to compare monthly service fees among various financial institutions. Here’s how it works:

• You’ll be asked a series of questions about how you do your banking, i.e. how many ABM and debit transactions you conduct each month, how you pay bills (at the counter, the ABM, by telephone or PC), how often you use another bank’s ABM.

• You’ll then have a choice of several different financial institutions; simply hit a button for the packages you want to consider and the computer will give you the costs of the different plans based on the services you actually use. For example, your package might include a certain number of ABM transactions within and outside of Canada, debit card transactions, telephone and PC banking, overdraft protection, pre-authorized debit payments, free cheques and a monthly statement.

• To check out another financial institution’s offerings, hit another button and you’ll get a direct comparison. You may find that a different package or even another financial institution might be able to drastically reduce or even eliminate your service fees.

Keep in mind that while costs are important, there are other aspects to consider – the features of the account and the package you want. Some customers may be willing to pay a higher fee based on value-added or convenience features.

Times Have Changed Twenty years ago, many Canadians did their banking very differently than they do today. In the era before electronic banking, they typically visited the bank branch once or twice a week, wrote cheques for bill payments and paid for purchases either with cash, cheques or credit. Since the first Automated Banking Machines made an appearance in the early 1980s, Canadians have embraced the convenience of banking any time, any place. Telephone and computer banking, ABM use and Interac ® Direct Payment (IDP) have given Canadians the option of banking on their own terms. They have played a key role in bringing the bank to the customer. For instance, with Interac ® Direct Payment, customers can use their debit cards to access their accounts and pay for purchases at many retail outlets, including supermarkets, department stores, gas stations and restaurants. We’re Number One when it comes to ABM use, logging 52.7 transactions per Canadian in 1997. Compare this with our American neighbours who took second place with 41.1 transactions per person. Canada is Number Two, after Belgium for direct payment use.