Which is Better ING Direct or PC Financial: Part Two Cheques, Interest, Overdrafts and Chequing

After we opened a chequing account at Tangerine and a President’s Choice No Fee Chequing Account we discovered they are not identical. So which is better for our chequing and cheques?

I Write a Lot of Cheques. Is Tangerine’s Chequing Account or PC Financial’s No Fee Account Better for Me?

I find it a bit amusing to read posts on sites like RedFlagDeals where people brag that they never write cheques and they put all of their purchases on plastic to get points. I’m sure it works for them: I just doubt they have children. So far this new school year, I’ve written 17 cheques for my kids. That’s just in 3 months. And that doesn’t include all the cash sent in for various charitable “Toonie Tuesday” days and to buy milk tickets.

The cost of cheques from our “Big 5” Canadian bank was what led us to opening our President’s Choice Financial No Fee Chequing account. Believe it or not, you can order free cheques for your PCF No Fee account. As many as you need!

Tangerine, unfortunately, does not offer unlimited free cheques. You can get your first book free for a Chequing account. After that, though, you have to buy the cheques. They are reasonably priced compared to a “Big 5” bank, though.

Clear winner: PC Financial.

I Keep a Large Balance in My Chequing Account. Which Pays Higher Interest: Tangerine or PC Financial No Fee?


I Keep a Very Low Balance in My Chequing Account: Which Pays Higher Interest: Tangerine or PC Financial No Fee?

This one unfortunately can vary as both Tangerine and PC Financial like to offer short-term higher interest rates to lure in new customers. The following analysis is based on their regular posted rates.

The rates have changed since the post was written. Please check the article: Which Bank Offers the Best No Fee Chequing Account: PC Financial or Tangerine? for a comparison of the rates as of April 2017. The result if you prefer the summary is:
If you keep about this amount in your chequing account

  • 0 – $12 000   you earn the most interest at Tangerine
  • $13 000 and up you earn the most interest at PC Financial

Today, in December 2015 2013, [and still in June 2014]

the regular posted rate for a Tangerine chequing account is

  • 0.25 % for a balance between $0 – 49 999.99
  • 0.65 % for a balance of $50 000 – 99 999.99
  • 0.75 % for a balance of $100 000 or more

the regular posted rate for a President’s Choice Financial No Fee chequing account is

  • 0.05% for a balance between $0 – 1 000
  • 0.1% for a balance of $1 000.01 – 5 000
  • 0.15% for a balance of $5 000.01 – 10 000
  • 0.25% for a balance of $10 000.01 – 25 000
  • 0.5% for a balance of $25 000.01 and up

In both cases you only get the higher rate on the amount of money you have in the account above the previous tier.

For example, if you have $55 000 in your chequing account, you get about

  • at Tangerine.ca
    50 000 x .0025 + 5000 x .01 or about $175 per year
  • at PCF
    1000 x .0005 + 4000 x .001 + 5000 x .0015 + 15000 x .0025 + 30 000 x .005 or about $200 per year

Interest is actually calculated daily and paid monthly which means it will compound so these numbers are just approximations.

If you keep a low balance, say below $10 000, Tangerine will pay you more interest per year as it has a higher interest rate for low balances.

If you keep a high balance of over $60 000, again, Tangerine will usually pay you more interest per year.

Between $30 000 and $60 000, though, PC Financial pays you the most interest!

Winner? It depends on what balance you usually keep in your account.

I Bounce Cheques but Never by Much or For Long: Which is Better a Tangerine Chequing account or a PCF No Fee Account?

OK I have no personal experience with this one. I’ve never bounced a cheque and it’s unlikely I ever will. I’m also one of those obsessive people who arrives 7 minutes early for every meeting or gathering. (But don’t worry, I never ring the doorbell early because I know most hosts are running late.)

So this part is based on the information listed on the respective websites for Tangerine and PC Financial.

First, why are you bouncing a cheque? If it’s because of a miscalculation of a few dollars, then the following info may be useful. If it’s because you don’t have enough money to pay your bills and you’re bouncing a cheque for hundreds of dollars, you probably aren’t going to find a solution here.

The Tangerine Chequing Account Whoops Protection Plan

UPDATE: As of August 2015, Tangerine no longer offers free Whoops! overdraft protection. They do offer a for-fee and for-high-interest-charges overdraft protection but it is essentially the same as that offered by PC Financial. This article has more details about the new Tangerine overdraft protection.

If you pass a credit check when opening your Tangerine chequing account, you can qualify for free Whoops protection overdraft protection that costs a fee and costs a high-interest daily charge for each day you owe them money.

The Whoops plan covers an overdraft of up to $250. In other words, they will let the cheque clear your account so you won’t get in trouble with the person you paid or the other bank.

Next, they will email you a notice right away stating you are overdrawn.

You have 30 days from when the account balance dropped below 0 to pay the overdraft.
After that 30 days, you will be charged a $2.50 fee for every 30 days that the account balance is under $0.

Once the account balance is under $0 no new cheques or payments will be allowed to clear.

Whoops covers “future dated bill payments and email money transfers, pre-authorized debits, and cheques” as of December 2013. They can change these features, though, so check every so often that they still apply. [They still do as of June 14, 2014.]

PC Financial’s No Fee Chequing Account Offers Optional Overdraft ProtectioN

PC Financial’s No Fee account does not offer free overdraft protection.

When you open your account, you can apply for Overdraft Protection. The maximum protection available is for $5 000. Not all applicants will qualify for the maximum. We were told by the agent when we opened our account that a credit check would be necessary to apply for overdraft protection.

For clients with overdraft, the account balance must be brought above $0 at least once a month.

If you use the overdraft service, you will incur a charge and a fixed interest rate on the overdraft balance. In December 2015 2013, the charge is $4.97 each month that you have an overdraft. The interest rate charged on the overdraft is 19% per annum. Ouch! [This is still the posted rate on November 9, 2105 and June 14, 2014 and December 17 2015.]

As I described in Part One Moving Money, Transfers and Holds, it takes a full business day to get money from your PC Financial savings account to your PC Financial chequing account. That makes it much easier to bounce a cheque accidentally. Tangerine, however, lets you transfer money instantly from your ING investment savings account to your chequing account. That can help reduce the risk of a bounce. (Some customers have told me that if you telephone PC Financial you can actually get money moved instantly to your chequing account from your savings account if there is a really good reason; I have not personally tried this approach.)

Can I View My Used Cheques Online for Free?

With both the Tangerine Chequing and the PCF No Fee account you can look at a scan of your cashed cheques online for free. This is great for joint accounts where you can’t remember who wrote a specific cheque and what it paid for.

Can I Pay My Bills Online for Free?

With both the Tangerine Chequing and the PCF No Fee account you can pay bills online for free.

Can I Pay by Debit for Free?

With both the Tangerine Chequing and the PCF No Fee account you can pay by debit at stores for free.

Paying by debit with the No Fee account at a Loblaws or affiliate store will also earn you PC Points which can be redeemed for groceries.

What ABMs Can I Use for Free?

For PC Financial No Fee accounts, you can use the banking machines at PC Financial kiosks, and the banking machines owned by CIBC, for free.

For Tangerine Chequing accounts, you can use ABM machines that belong to the Scotiabank ABM Network for free. As of September 30, 2014, you will NOT be able to continue to use the Exchange network machines for free for Tangerine chequing accounts.

UPDATE December 2015
For a withdrawal from another bank’s ABM machines in Canada, Tangerine charges a fee. The bank that owns that ABM will probably charge another additional fee, often $3-7 so be careful!

Similarly, PC Financial will charge a fee for withdrawals from a non-PCF, non-CIBC terminal in Canada. There will be another additional fee charged by the bank that owns the ATM.

For a withdrawal from another bank’s ABM machine in the US and other countries, Tangerine charges a fee. The bank that owns that ABM will likely charge another additional fee and it may be quite high. Some ABMs belonging to the Global ATM Alliance will not charge a fee but you’d have to check with Tangerine about exceptions.

Similarly PC Financial will charge a fee for withdrawals in the US or other countries in addition to the fee charged by the bank that owns the ATM.

Email Money Transfers and Interac e-Transfer EMTs

I don’t understand the email money transfer system well enough yet to comment much on it. Tangerine says it offers no-fee free email money transfers for Chequing accounts. I’ll have to test what that means for another article.

It costs $1.00 to send an Interac e-Transfer EMT from your Tangerine chequing account. It is free to receive transfers in to your account. Again, I don’t understand these enough yet to comment.

PC Financial has Interac e-Transfer EMTs. It costs $1.50 to send an Interac e-Transfer EMT. (It’s not clear whether there is any charge to receive a transfer.)

Can I Get a Bank Draft?

At Tangerine you can order a bank draft but there is a fee. It will be couriered to you, not to the person you want to pay, nor can you pick it up except at one of their very few locations/Cafes. The Cafes cannot issue drafts: you can have a draft couriered to the Café for pickup though. In December 2013 [June 14, 2014] they quote a price of $10 for a draft and a requirement of 2-3 business days to courier it to most locations.

At PC Financial you can get a Bank Draft for $7.50 [Dec 2015 June 14, 2014] plus any required courier charges.

What Kind of Statements Can I Get for my Chequing Account

You can view and print your bank statements online for both Tangerine Chequing and PC Financial No Fee accounts.

For a fee you can also have a paper statement mailed to you for a No Fee account.

A Surprising Fee

OK this may just be surprising to me, but PC Financial charges a fee to negotiate a cheque written in US dollars or any other foreign currency. This is in addition to the fee built into the exchange rate for the foreign funds. The fee is $7.50 for a cheque for under $1000 and $15 for a cheque for over $1000.

I believe this means if you write on a cheque you issue that it is payable in, say, US dollars, they will charge this fee. I don’t think this fees applies to when you try to cash a cheque in US dollars payable to you. I’ve sent an email to ask for clarification.

So Which is Better: Tangerine’s Chequing or PC Financial’s No Fee Chequing Account?

Obviously, this one will depend on how you use your chequing account.

For us, I would say the Tangerine account is best except for one problem: they don’t offer free cheques. Until my kids outgrow the school system, this is a deal breaker.

Tangerine otherwise suits us best because

  • I like the bill payment on screen layout
  • it allows us to instantaneously transfer money from our investment savings account to our chequing account (and back!)
  • a Scotiabank branch with an ABM is closer to us than a CIBC or PCF ABM
  • we keep a fairly low balance in our chequing account and it does pay some interest
  • we can deposit cheques online using their photo submission app but we can now do that at PC Financial too

PC Financial might suit others best who

  • want lots of free paper cheques
  • keep a very high balance (between $30 000 to $60 000)
  • can reach a CIBC or PCF ABM easier than a ScotiaBank ABM
  • need overdraft protection up to $5 000 and are prepared to pay for it (but you can get some overdraft protection for a fee from Tangerine too)
  • would like to collect PC Points for paying by debit at Loblaws and affiliated stores

Of course since these are both no fee accounts with no minimum balances, you can even be like us and try one of each!

Be aware that both banks will charge a high fee if you have no activity in your account for 1 year (Tangerine) or 2 years (PC Financial). An easy way to keep an account active is to set up an automatic transfer of $1 in to or out of an account each six months.

Related Reading

Join In
Do you cheque with PC Financial’s No Fee account or do you use Tangerine? Please share your experiences with other readers by leaving a comment.
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Yes, we bank with Tangerine.ca among other places. If you open your first account ever with Tangerine (or ING Direct) using our Orange Key below, and deposit $100 before January 31, 2018, you and we will both get a cash bonus of $50 each. (Yes, they did extend the promotion for another few months!) All you have to do is enter the Orange Key 46470587S1 when you are opening your Account, and you’re set to go.

Just copy our Orange Key, then click on this Tangerine link to see the details and apply for an account. (Note: it only applies to people with no existing or previous accounts with Tangerine or ING Direct.)
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10 thoughts on “Which is Better ING Direct or PC Financial: Part Two Cheques, Interest, Overdrafts and Chequing

  1. Interesting comparison. Almost everything looks better than what you’d get with one of the big banks. When you say “Interest is actually calculated daily and paid monthly which means it will compound so these numbers are just approximations,” you’re right that the exact calculation would come out a little different. The interest paid on all bank accounts I’ve looked at in Canada are compounded semi-annually. This means that if interest is paid monthly, the actual monthly rate is calculated by taking the nominal yearly rate (r) and calculating the monthly rate as follows: (1+r/2)^(1/6)-1. So a nominal yearly rate of 2% is actually 1% per half-year, which is 0.16598% per month. Most people assume that if interest is paid monthly, the interest rate would be r/12 (0.167% in this case), but I’ve never seen it done this way. With loans, the compounding is usually monthly, except for most Canadian mortgages which are compounded semi-annually. The whole mess just reeks to me. It should be illegal to take any yearly rate and divide it by 2 to get a half-year rate or divide it by 12 to get a monthly rate. All rate calculations should be done based on compound interest rather than simple interest.

    • I think you might be unpleasantly surprised how many people get trapped in the “limited time only” interest rates offered by ING and PCF as well. They will advertise, say, “2.5% for 3 months.” The fine print says that’s an annual rate, but people don’t read the fine print. They think they’ll get 2.5% if they keep their money in the account for only the 3 months. Still it beats the 0% our Big Bank currently pays on a chequing account.

  2. Totally use both.
    Have been with PC financial for a while now, but just opened an ING Thrive in November (wink).
    It was the cheques that I need most from PCF, but email money transfer for ING is of value to me.

    The limited time offer interest rates, are on deposits above the balance at the beginning or something, so was planning on using the two accounts to transfer a balance around. Not sure how well it will work though.

    • Thanks!
      Many people do transfer money back and forth between PCF and ING to take advantage of the short term rate offers. It’s easy to link two chequing accounts to permit e-transfers and both banks don’t charge for those transfers.
      Just to be clear it’s only email money transfers that are free from ING. The Interac e-transfers (formerly called email money transfers by some) are not free. I’m going to try one fairly soon just to see how it works.

  3. Thanks for sharing this information! I didn’t know Tangerine gives higher interest rate for chequing account with low balance. Now, I am thinking of moving to Tangerine; although, I am a loyal client of PC Financial cause of their free chequing.

    • Thanks for reminding me to check today’s interest rates offered by both banks. The rates are still higher for very low balances at Tangerine than at PCF.

      Personally, we have a chequing account at both Tangerine and PCF but I understand that may be too complicated for some people to bother.

      I do like the free paper cheques from PCF which is why we’re keeping that account for now.

  4. This year Burnaby Schools are using [an internet company] to collect money. It is really nice not having to send money into the schools in either cheques or cash. I don’t know where you are located, but encouraging your school district to use this or similar system would be valuable. The ease of use from the school’s point of view should be a draw too – they cannot enjoy dealing with all those cheques and cash transactions for every little thing each school year.

    • That’s an interesting approach. As you say, it could be more convenient for the school than rolling coins or depositing cheques. It wouldn’t totally ease the burden though as someone at the school would have to verify that each child’s family had paid and the family would still have to sign and return the various permission and order forms. Depending on how much the online service charges it might or might not be worth it.

      The schools my children attend cater to a large number of families who are new to Canada and are in extremely tight financial situations while they look for work. I don’t think an online collection service would work for them as most of them do not have credit cards and some of them don’t even have Canadian bank accounts yet. They tend to pay in cash.

      Still, it’s an interesting service I had not realized was available.

  5. Thank you for this informative post! Its nice to see a detailed comparison from a consumer’s point of view.
    I would like to say that ING was a wonderful bank and I had zero complaints. The switch to Tangerine, however, has been quite the reverse. For some reason, I have had nothing but problems it seems.
    I referred a friend to take advantage of a short term promotion they had. My friend tried signing up for a Tangerine Chequing account but was firmly told he needed a letter from a lawyer or family doctor stating that he was who he claimed he was. Whaaat? Apparently due to increase fraud cases and security issues, this is why they needed him to have proof. If the words “fraud” and “security issues” don’t throw up red flags for you to reconsider where you put your hard earned dollars, I’m not sure what will.
    About a month later, I tried using my debit card to access funds at a Scotiabank. It did not work. I called Tangerine and “unfortunately due to a system update, all Tangerine debit cards won’t work for the next half hour” Hmmm.
    Lastly, I tried to use the “Cheque in” feature with Tangerine. After depositing my cheque, not an hour later it was reversed. I called and they stated they don’t deposit post-dated cheques. My cheque was not post dated. They simply read the date wrong – which makes me question how carefully they handle their client’s money.
    This unfortunate series of events spans a mere 4 months. I am in the process of opening a PC account.

    • Interesting series of events. I’m not sure what the account opening concern was but it’s possible that unfortunately your friend’s name is similar to someone with a poor credit history. We have accounts at both Tangerine and PC Financial and the two institutions are fairly similar. I haven’t experienced anything unusual with Tangerine yet although if I do, I will write about it, just like I’ve written about some of the oddities at PCF. Thanks for sharing your views!

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