I'm a big fan. Or rather, I
was. The profitability of those "Big 5" banks is the closest thing to a sure bet in investing I've ever seen.
CM
TD
RY
BMO
BNS
But I cannot any longer ignore the
unethical way that these banks treat their customers. It's been going on for years. Tonight on CBC's
The National, I saw a news story that "broke the camel's back." And their customers = 90% of all money on deposit in Canada. Now, despite MAKING A PROFIT during the Covid ordeal, they are raising minimums in order for customers to avoid paying fees, and raising the fees, as well. And add to this, the fact that in-person service has been cut back to a bare-bones level. On this basis, I will not be buying. Until there is a sea-change, somehow.
https://www.cbc.ca/news/business/bank-fee-increases-1.6032824
Comments
What isn't mentioned is that the reason such a long time customer was used as an example is that all customers of this account have had it for at least two decades. Preferred Chequing was discontinued in 2001 except for grandfathered customers.
https://www.theglobeandmail.com/investing/personal-finance/household-finances/article-was-this-big-bank-too-nice-in-giving-some-clients-a-break-on-fees/
The disproportionate coverage of this one particular account type to the exclusion of all others suggests that this is a corner case and not necessarily representative.
The customer is quoted as asking: "In an environment where people have lost their jobs, they're on furlough, they're trying to get CERB payments, who's going to be able to keep $5,000 in their bank account to not get service fees?"
The article could have responded to this by noting that since 2003, low-cost accounts (with minimum requirements set by the government) have been available at many banks, including TD Bank.
https://www.canada.ca/en/financial-consumer-agency/services/banking/bank-accounts/low-cost-no-cost.html
Or that TD Bank is not raising monthly maintenance fees or min balance requirements on its current offerings, and is eliminating the paper statement fee on its Student Chequing Account. Though it is converting Youth Accounts to Student Chequing Accounts, resulting in a new cap of 25 transactions/mo w/o fees.
https://www.tdcanadatrust.com/document/PDF/accounts/513796.pdf
Or that CERB shut down before these fee hikes. If the point is that many people are dealing with reduced cash flows (notably, lower income), that's whom low cost accounts are designed for.
Certainly some Canadian bank fees are going up, and while the government is doing something to help, it could always do more. But this article does not present the typical account nor does it present a broad picture of banking fees in Canada.
It's a little dated (2014), but here's a Canadian government study of banking fees.
https://www.canada.ca/content/dam/canada/financial-consumer-agency/migration/eng/resources/researchsurveys/documents/bankingfees-fraisbancaires-eng.pdf
"...rising fees, while evidently annoying, are of small economic consequence."
.........But not after years and years of cuts in service and constantly rising fees, to my mind.
https://www.cbc.ca/news/business/banks-pandemic-profits-pittis-1.6040739