no fee chequing account | Financial Crooks

We have a chequing account at Tangerine but we rarely write a cheque against it because we also have a no-fee chequing account at PC Financial which comes with unlimited free paper cheques. So it costs me nothing to write yet another cheque for $16 to my child’s school, this time to pay for a field trip to the symphony, if I use my PC Financial account; Using a cheque from Tangerine would eventually cost me money as I would run out of paper cheques sometime and have to pay for another book. So this summer when ScotiaBank, the new-ish owners of Tangerine decided to cancel the Whoops! free overdraft protection program I didn’t really pay much attention: it’s time to check into it though and update my info on Tangerine.

Why Losing Whoops! Protection might be a Good Thing

Whenever a bank ends a free service it tends to get discussed at RedFlagDeals. One or two people on a chat about the cancellation of Whoops! Protection pointed out a benefit: It should help Tangerine save money to not offer this free service. Those savings could result in a higher interest rate offered to customers. Personally, I’m not counting on that!

What Overdraft Protection Is Tangerine Offering on Its No Fee Chequing Account?

Tangerine now lets you buy overdraft protection. It covers when your balance drops below 0 due to

cash withdrawals
pre-authorized payments
cheques, and
debit purchases.

You can get policies to cover from $250 to $5000 of overdraft. Tangerine will decide how much overdraft it will offer to you based on your history with them and/or your credit rating.

How Will I Know If My Tangerine Chequing Account is Over-drawn?

Tangerine will send an email if your account balance drops below 0 and your over-draft protection beings.

What If I Made a Mistake and Transfer In the Money to Cover the Over-draft Immediately?

It’s possible for anyone to make a payment by debit or make a withdrawal of cash and realize immediately that they used the wrong bank account. Tangerine is giving a “same business day” grace period: if you make up the shortfall to restore your account balance to a positive number before the end of the same business day that you dropped below 0, they will not charge any fee or interest charge. (WARNING: This probably only applies if you have purchased their Overdraft Protection! If you have no overdraft policy, you might be able to get them to waive fees and interest if you phone in immediately to ask for an exemption.)

How Much Do I Pay If My Tangerine Account is Over-drawn?

There are two things you pay if you owe Tangerine money: a monthly fee and a high daily interest rate.

At the end of the first business day after your account balance drops below 0, you will be charged a $5 fee. Then, on the first day of each month when your balance is below 0 you will be charged another $5.

On top of the $5 fees (which will be added to the amount you owe and interest will be charged on those fees too!) you will also be charged interest daily. The interest rate is 19.00% per year but calculated by them as a daily rate and applied to your end-of-day shortfall each and every day until the amount is paid back.

Given that they are paying you a measly 0.8% interest rate on your savings, an over-draft rate of 19% is astonishingly high. DON’T spend money you don’t have!

Will I Be Applying for Tangerine Overdraft Protection?

No. I can’t see any realistic scenario where I would need it.

If at all possible, I strongly recommend all customers of any banks do not allow their accounts to slip into over-draft. It’s an incredibly expensive mistake. Keep an eye on your transactions, balance your bank book before you write a cheque or make a debit withdrawal and if necessary, look for other better ways to borrow money.

Is Tangerine’s Overdraft Protection Better or Worse than Other Banks?

Some banks charge a fee every month for overdraft protection whether it is used or not. Tangerine’s offer is better than that because it costs nothing if you don’t use it.

The fee and interest rate charged by PC Financial for overdraft protection is about the same as that charged by Tangerine as of the time this was written. (November 9 2015) Both banks could change their fees and rates at any time so always check directly with the bank before you make any decisions.

Tangerine’s free Whoops! Protection used to make their chequing account a bit better than some others; now that it’s gone, it’s getting harder to find a big difference between it and some of the other no-fee chequing accounts available online.

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Did you ever use Whoops! Protection? Did it make you happy to know that it was there, at no cost, even if you didn’t use it? Please share your views with a comment.

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This week I dropped off some Christmas presents for the grandchildren to my parents and they paid me back the cost by writing me a cheque. This gave me the perfect opportunity to test the relatively new ability to deposit a cheque using a photo and the PC Financial Mobile Banking App.

The first thing I had to do was get the App for my husband’s iPad and install it. Then I cruised through all the deposit-specific legal conditions. Then I took a photo of my cheque and tried to deposit it. Here’s how it went.

What Kinds of Cheques Can I Deposit Using the PCF App?

According to their legal stuff, you can deposit

cheques
bank money orders
bank drafts
convenience cheques, and
certified cheques

They all have to be written based on a financial institution that’s in Canada. So if you get a cheque from a US bank or company you will still have to go to the bank to deposit it.

You can only deposit a cheque made payable to more than one person into an account held jointly by all of those people.

Can I Deposit a Post-Dated Cheque Using the PC Financial App?

No.

How Is It Different from Depositing a Cheque to Tangerine?

Well, according to the Legal info, you have to write on the back of the cheque: “For deposit only, account # ______” and signing your name. I’m not thrilled about this because if the cheque gets rejected by PC Financial’s photo deposit team I now have extra stuff written on my cheque and I’d have to take it to a CIBC machine or a PC Financial machine.

You also, theoretically, are supposed to *immediately* write “paid” or “void” or draw parallel lines across the front of the cheque immediately after transmission of an image of the cheque. That one I doubt anyone will comply with. What if the image transmission fails? How are you supposed to deposit a cheque marked Void or Paid or scratched out?! I want some kind of confirmation that the cheque has been properly accepted before I deface my cheque.

This is particularly important given their own terms go on to say:

“…the paying financial institution [may] determine[s] the item …. is illegible, or is otherwise unacceptable. We are not responsible for images that are corrupted or not fully received during transmission.” And “You are responsible for any and all costs associated with obtaining a replacement negotiable item in the event that we request you re-transmit an image, and the original item was destroyed or lost.”

How Secure is Sending a Photo of a Cheque to PC Financial?

Well it’s a bit disquieting to read in their Legal section

“You accept the risk that an item may be intercepted or misdirected during transmission. We have no liability to you or others for any such intercepted or misdirected item or information disclosed through such errors.”

Call me “Danger-Seeking” but I’m still going to try it…..

How to Get the PC Financial Mobile Banking App for iPads and iPhones

Go to the Apps Store.
Look for the PC Financial Mobile Banking app.
Tap on the Get button.
Tap on the Install button.
Type in your iTunes password and tap on OK.
Tap on the Open button.

The seriously ugly PC Financial Mobile Banking App sign in screen will open. If you’re like me, it will open sideways instead of properly oriented on my screen. Not sure what’s up with that.

Next I wanted to try to deposit the cheque into our joint PC Financial no fee chequing account.

How to Deposit a Cheque Using the PC Financial Banking App

Find your actual bank account number, not your bank card number, for the account into which you want to deposit the money.
Tap on the PCF Banking icon.
In the Card number field, type your PC Financial banking card number.
In the Password field, type the password you use for online banking.
On the next screen, look for the tab “Deposit” across the top of the page.
Tap on Deposit.
Tap on the Info link at the top right side of the Step 1 Deposit Details section. Read through the info.
And there it is again:
“Prior to deposit, you should endorse the back of the item by writing or stamping ‘For deposit only, account # _______’ and signing your name.”
So I wrote the required information and endorsed the cheque.

After going back to the Step 1 Deposit Details page

Front of Cheque

Under the heading Front of Cheque, tap on the Take Photo button.
Tap OK.
Tap on the Camera icon.
If it’s ok, tap on Use.

Back of Cheque

Under the heading Back of Cheque, tap on the Take Photo button.
Tap OK.
Tap on the Camera icon.
If it’s ok, tap on Use.
If not, tape on Retake until you get an image for which you can tap on Use.
In the Amount: $ field, type the amount for the cheque.
In the To: field, select the account to deposit the cheque into from the drop-down list.
Tap on Continue.
Tap on Deposit.

If It Works

You will receive a message similar to this one:
You’re Finished!
Your cheque for $999 999.99 will be deposited to your no fee bank account (12345678910) on Dec 1, 2014.
Reference # ABC123
Make some kind of secure note of the Reference # in case the process fails!
Tap on Deposit More or View Accounts.
Tap on Sign Out.
Tap on OK.
Turn off your iPad.

When Can I Get Rid of the Original Paper Cheque?

You must hold on to the paper cheque for at least 5 business days according to PC Financial’s Legal page.

What Did I Think of the PC Financial Online Banking App Photo Cheque Deposit?

Like with the Tangerine App, I found it a bit slow to compose a photo with no shadows, no distortion, no anything using a heavy iPad camera.

I was very annoyed when the PCF App suddenly signed me out for “inactivity” while I was trying to retake the photo of the back of the cheque! I had to sign in and start all over again.

Overall, it seems fine, but let’s wait and see if the cheque gets properly deposited and clears my parents’ bank ok. I’ll add an update when it does.