promotions | Financial Crooks

Instead of offering a good interest rate year round, many banks now offer short-term higher interest rates to try to win new customers. Tangerine and PC Financial often do this. For example, on September 1, 2014, Tangerine started offering an annual rate of 3% on new savings deposits made between September 1 and September 15. [UPDATE: On September 16 they extended the deadline to September 30.] The catch is the higher rate only lasts until November 30. And it only applies to new deposits, not to money you already had in your accounts which continues to earn only 1.3%. These kinds of offers have led some people to start transferring their cash savings between Tangerine or PC Financial depending on which bank currently has the highest promotional interest rate: are you one of them?

3% for a Daily Interest Savings Account Sounds Great! Is it?

If you could get 3% for a full year on a no-fee, no minimum balance, daily interest savings account it would be pretty sweet. Many savings accounts are offering 1% or less a year. So at first glance, the Tangerine promotion seems great.

The reality, though, is the rate is not being offered for a year, only for 92 days. And if you didn’t deposit your money September 1, it’s fewer than 92 days.

Say you deposited $1000 on September 1. It would earn about $7.50 if you kept it there until November 1. That’s good, but it’s not epic.

And remember, you already were earning some interest on that money. For example, say you had the $1000 originally in a BMO High Interest Smart Saver Account. According to the posted rate today, September 2, of 1.05% per year, you would have earned about $2.63 if you kept it there until November 1.

So the Tangerine promo is only offering you about an additional $4.88 in interest for hosting your savings for three months. That’s good, of course, but again not amazing.

Why Do People Transfer Cash Savings Back and Forth from Tangerine to PC Financial?

In general, these promotional high interest rates are only offered on “new” savings. When they are announced, they state that they are calculated based on how much you have in all of your savings accounts at the bank as of some DATE already PASSED. You don’t know what that date will be until they make the announcement.

They only pay the higher rate on any money in your savings which is above the amount you already had on that date.

For example, in the new promo, Tangerine picked a past date of August 31 2014. (The full rules for this promotion were at https://www.tangerine.ca/en/landing-page/backtoschool/termsandconditions.html.)

So if you had $2500 in your Tangerine savings account on August 31, you will only earn the 3% rate if you have $2501 or more in your account, and even then you will only earn it on the amount exceeding $2500. (For example, if you have $2501, you will earn 3% only on $1! The other $2500 continues to earn the regular 1.3% interest.)

The trick is that often PC Financial will come out with a competing offer a few days after Tangerine. (and vice versa)

If you have a savings account at each bank, you can literally move the money to take advantage of the newest promotional rate.

For example, say on August 31 you had $2500 in your Tangerine savings account and $10 in your PC Financial savings account. Now, if things follow the usual pattern, in a few days, PC Financial will offer a special savings account rate. You can then transfer your $2500 from Tangerine to PC Financial to start earning the new rate.

Yesterday, September 1, if you had a way to spy on PC Financial transfers, I’m sure you would have seen many requests go in electronically to move savings money to Tangerine.

Because transfers are free at both Tangerine and PC Financial and because neither bank requires a minimum balance in their savings accounts, this technique works.

When Might It be Worth All This Savings Account Transferring?

The actual interest earnings are not huge even with these higher promotional interest rates. If you only have a few hundred dollars in savings, they are not very interesting.

But if you have a large amount in cash savings, perhaps because you plan to buy a house in the next few months, or you have a major trip or renovation or tuition bill coming up soon, these rates can be more attractive.

For example, say you have $50 000 in cash which you need in 6 months but not now. Most short-term GICs are offering under 2% and you can’t get your money as simply as you can withdraw it from a cash bank account.

If you could put $50 000 in at 3% annually for a 3 month period, you could earn $375.

That would buy 2 new bicycles and helmets for your children. (Can you tell what we had to do recently?)

More Info on this New Tangerine 3% Promotion

Tangerine is also offering some incentives on new deposits to its TFSA, RRIF and RRSP cash savings accounts. You’d want to read the details of the promotion carefully to see if you would actually be eligible for this temporary higher rate.

What If I Don’t Have an Account with Tangerine? Can I Get This Rate?

Yes.

Just open a new account with Tangerine and write a cheque to deposit your savings.

If it’s like most promotions at Tangerine, they will start paying you interest from the day they receive your cheque.

Remember, though, that the bonus rate only applies to funds deposited between September 1 and September 15, 2014 [UPDATE: now September 30], and it only lasts until November 30. So you’d have to move pretty fast to make any money.

What Am I Doing?

As you may know, we have savings accounts at both Tangerine and PC Financial. Right now, ironically, most of our money is at Tangerine. So we’ll be hoping for a matching promotion from PC Financial. But since we don’t have $50 000 just sitting around, we won’t be devastated if PCF ignores this latest round in the rate wars.

UPDATE: The matching promo has launched!

Our TFSAs and RRSPs are already maxed out, so there’s no way to take advantage of the higher rates there, either.

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What about you? Do you have some cash savings that you intend to shift around to take advantage of this short-term promotional rate? Please share your ideas with a comment.
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What is Tangerine.ca?

As I mentioned Tangerine is the new name for what used to be called ING Direct. They recently changed their website address to tangerine.ca. They also “refreshed” their website’s look. Personally, I don’t think they improved it much but it’s not significantly different in a good or bad way, which is good, right?

It Matters That ING Direct has Changed Its Name to Tangerine If You Have a Mortgage or Unmortgage

Because your home insurance policy and your municipal (property) tax department may have the name of the company owning your mortgage on their files, you need to tell them that your bank’s (mortgage’s) name has changed from ING Direct to Tangerine.
The name “unmortgage” has been changed to “Tangerine Mortgage.”

What Happened to my THRiVE Chequing Account?

Nothing has changed with anyone’s existing ING Direct THRiVE chequing account, except the name. They are now called Tangerine chequing accounts. (Which is easier to spell, admittedly.) You can still use your existing paper cheques and transfers will go through the same as they did before this change to the name used for advertising the accounts.

Cheques ordered in May 2014 and later will have the Tangerine name.

The savings account name has also been changed from the ING Direct investment Savings Account to a Tangerine Savings Account.

What Happened to the Streetwise Funds?

Similarly, the name has changed for the ING Direct mutual funds now they belong to Tangerine.

The word “Streetwise” in the title has been changed to “Tangerine.” For example, the Streetwise Balanced Fund is now called the Tangerine Balanced Fund, as of May 2014.

ING Streetwise Portfolios have been renamed Tangerine Investment Funds.

Where Can I Get Cash or Make a Deposit to my Tangerine Account?

Although they have updated their website and changed their URL, Tangerine/ING Direct are still working on changing which Automated Bank Machines you can use for free.

Tangerine (formerly ING Direct) customers have access to ABMs to make deposits and withdrawals to and from their Tangerine chequing accounts.

Tangerine customers who only have a savings account generally make their deposits to a bank account linked to Tangerine, then transfer the money into the account electronically. (In the past, I personally have mailed cheques in to ING Direct to be deposited in my savings account. I’m not clear if that is still an option because now I have a Tangerine chequing account, and I can deposit my cheques by taking a photo of them with my tablet and using the Cheque-In deposit app.)

Right now until September 29, 2014, customers can still use ABMs that belong to the Exchange Network for free. These machines are usually in credit unions or National Bank branches. You can find the location of these ABMS using the Tangerine website. https://secure.tangerine.ca/web/InitialTangerine.html?locale=en_CA&device=web&command=goToAbmLocator

You can, of course, also just use cash back when making a debit purchase at a store. Debit transactions are no-fee with Tangerine.

As of September 30, 2014, however, the ABMs customers can use will be switching. At that time, customers will have to use machines belonging to the Scotiabank ABM Network. For cash withdrawals, these include the ones at Scotiabank branches but also include some at Shell stations, 7-Eleven’s, Quickie convenience stores, Cineplex Theatres and Couche-Tard’s. For deposits including cheques customers will probably have to go to a Scotiabank branch ABM. In fact, customers should be able to start using these Scotiabank ABMs starting in June.

This switch in ABMs is annoying many customers in B.C. where the Exchange network is larger than the Scotiabank network. Tangerine is therefore still trying to find a way to improve what they offer.

Using International Bank Machines, ABMs. with Tangerine

Scotiabank belongs to the Global ATM Alliance. This means that Tangerine will not charge you a surcharge or access fee when you withdraw cash from nearly 50,000 machines in over 40 countries. There are sometimes fees charged by the international ABM’s bank, though, so check the details with Tangerine before you travel.

Withdrawing US Dollars from Tangerine

If you can get to a Tangerine ABM (there aren’t very many) you can withdraw US dollars from your US dollar Tangerine account.

Are Tangerine’s Fees Changing?

So far, Tangerine has not announced or admitted to any plans to increase any fees. To stay competitive with other e-banks such as President’s Choice Financial, they may decide to continue to offer many no-fee services.

NOTE: As of January 2015 Tangerine now charges a fee if you transfer your RRSP, RRIF or TFSA money to another financial institution. (You can still withdraw cash from your TFSA for free but remember not to contribute it/deposit it again until the next January 1 to avoid over-contributing and having to pay the CRA a fine.)

As of May 4, 2014, Tangerine.ca offers

unlimited free debit transactions
unlimited free cash withdrawals
unlimited free deposits
unlimited free transfers between an external linked bank account and your Tangerine account
unlimited free bill payments
no charges for using a cheque with your Tangerine chequing account but you have to buy the paper cheques

Is Tangerine Offering Any Bonuses or Promotions Right Now?

Today, May 4, 2014, Tangerine.ca is offering the following promotions and bonuses:

If you make a deposit into your existing

Savings account
RRSP investment savings account
TFSA investment savings account
RRIF investment savings account

which increases your total balance above what it was on April 7, then the amount that is above that April 7 total will earn interest at a rate of 2.5% per year, calculated on the balance at the end of each day, and paid monthly. The higher interest rate will only be paid until July 31, 2014.

UPDATE: In January 2015, Tangerine.ca is offering a similar deal for deposits made. The higher rate will only last until March 31 2015. Check their website for the details.

To try to make this clearer, if you have a TFSA, a Tangerine chequing account and 3 savings accounts at Tangerine, they will add up how much money in total was in all 5 accounts on April 7. They will then add the totals every day from April 8 to July 31. Every day where the daily total exceeds the daily total on April 7, they will pay bonus interest on the amount above the starting April 7 amount.

They had to make it that complicated because people love to game the system. They love to transfer money from one account to another to try to get bonus interest. Many people will even transfer money from one bank to another to try to get bonus interest.

For most of us, this bonus interest offer is not that important.

For example, if you could increase your total account balance at Tangerine by $1000 over the total on April 7, the most bonus interest you could earn, if you deposited the $1000 on April 8 and left it there till August 1, would be about
$1000 x (2.5/365)(23+31+30+31)= $7.88
(That’s just approximate. It’s not exactly how they calculate the interest but it’s close.)

So if you just sold your boat or got a major tax refund, it may be worth depositing the amount in your account. Of if you have $40 000 saved up for your next car at a different bank, and you were going to open a Tangerine account anyway now might be a good time to do that. But it’s not a huge incentive.

New Savings, TFSA, RRSP, and RRIF Account Bonus

~~There’s more money to be made if you decide to open a new Savings account at Tangerine before June 30 2014.~~

This only works if you have *never* had a savings account at ING Direct/Tangerine. They keep track even if you’ve closed an account there years ago. They include TFSA, RRSP and RRIF accounts as “savings” accounts. So if you had a TFSA account, and even if you’ve closed it years ago, you still can’t get a bonus for opening a new savings account today at Tangerine.

~~If you open your first Savings account with Tangerine.ca and if you put in at least $250, they will pay you a bonus of $50 within 30 days after you opened the account.~~

You can only get one bonus regardless of how many types of savings accounts you open.
E.g. you can get a bonus for opening one of

a Savings account
a TFSA account
a RRSP account
a RRIF savings account

but you can not get 4 bonuses for opening one of each.

New Tangerine Chequing Account Bonus

~~If you open your first chequing account ever, and if you put it at least $250, they will pay you a bonus of $50.~~

They keep track of whether you had a chequing account and closed it so you can’t get a bonus if you used to have a chequing account even if you closed it.

If you have a savings account only, though, you still can get a bonus for opening a chequing account. (That’s a bit unusual for Tangerine.ca promotions.)

NOTE that chequing accounts do not qualify for the 2.5% bonus interest rate promotion.

Direct Payroll Deposit Bonus

If you complete the paperwork to have your pay cheque deposited directly to your Tangerine Chequing Account by July 31, 2014, they will pay you a $50 cash bonus. You should read the details on this because they are a bit complicated.

Various people have tried to get this bonus for direct deposit on non-payroll money, such as an automated payment in from another bank account. It doesn’t work. They are only interested in paying the bonus for a real pay cheque being deposited regularly from an employer.