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CAF Banking and Financial health [merged]

Hello all,

I wanted to create this thread about personal finance so that current and prospective members of the CF could create a discussion regarding the topics of bank accounts, credit cards, loans, investing, etc. I have noticed that in general people do not possess a great deal of financial education, which is no fault of their own, since it is not taught in schools and generally people have to fend for themselves with regards to their own money.

Anyways, I wanted to start things off with what I believe to be the best (read: optimal) bank account setup for me as of the time of writing. Hopefully it will help you save some money as well. I do not pay any bank fees, have unlimited transactions as well as some of the highest interest rates offered by a big bank. How?

I use two banks: Tangerine and RBC. Both serve their purpose. My Tangerine chequing account is my daily driver so to speak – that’s where my direct deposit goes. It’s completely free, with unlimited transactions, and, to my knowledge, has the highest interest rate for a chequing account. If you need an ATM, you can use any of Scotiabank’s. If you’re interested in getting an account you can message me privately, I have a referral code that will get you $50 for signing up for an account online.

As for my RBC chequing account, it’s like my backup. I use RBC when I really need a physical bank location where I can walk in and talk to someone (I find it necessary from time to time). Also, they don’t charge any fees when using e-Transfer!

The trick is making the RBC account free. If you already have a RBC chequing account that you’re paying a monthly fee for, the first thing to do is change your account type to what they call “Day to Day Banking”. You can do this through online banking or in a branch. If you’re setting up a new account then just ask for the “Day to Day Banking” chequing account. This is RBC’s most basic chequing account. It doesn’t give you much, but it’s enough (as a backup to your Tangerine account). It’s $4 per month, but luckily RBC has something called the MultiProduct Rebate (MPR). They offer you a rebate each month (on your chequing account’s monthly fee) if you have a couple of ‘products’ with RBC (ie. a credit card and an investment account).

In order to qualify for the MPR, you need: (1) an active credit card or a credit card with an annual fee, and (2) a pre-authorized monthly contribution to a RBC TFSA (or investment account) or a minimum of $500 in a RBC TFSA (or investment account). If you have both of those things, RBC will rebate you the $4 each month and the chequing account will be completely free.

What I do regarding RBC’s MPR is I have a no-fee RBC Cash Back MasterCard that I use once every couple of months or so to buy a coffee (to keep it active) and I also set up an automatic transfer of $25 per month (the minimum amount required) from my RBC chequing account to my RBC TFSA.

If you don’t like RBC for some reason, you could always replace that with BMO’s Performance Plan account. As a CF member they will waive the monthly fee and it looks like they have also removed the need to carry a minimum balance, which is great.

Minimum balances actually have an inherent cost simply due to the fact that the money left in the account IOT satisfy the minimum balance requirement is not being invested and thus not generating a return. These returns compounded over an investment lifetime ends up being incredibly expensive.
 
Good topic for discussion. See also,

Entering the CF and YOUR Money.... 
https://army.ca/forums/threads/26093.0
10 pages.

Banking in the Canadian Armed Forces
https://army.ca/forums/threads/113920.25
3 pages.

Separate from the above,
Banking in the CF!
https://army.ca/forums/threads/80216.50.html
3 pages.

Investing SISIP vs Big Banks vs Credit Unions vs Private Firms 
https://army.ca/forums/threads/123701.0

etc...
 
One very nice thing about the recent backpay was the ability to hammer my Visa Bill down to zero balance, which I've maintained at zero since early July.

The last time I had it paid to zero was well over 2 years ago.  In the two years of statements I looked at, the lowest it got was about $1800....and it seemed to float around $3-4K most of the time.  It hit a high last December of $9600 when we did a family trip to Quebec, Ontario, and then Florida.

The $9600 was my wake-up.  I cut my spending on frivolous (ie gun stuff) to practically nil, and hammered away at the payments.  I got it down to less than $4K by April, which is pretty good all considering.

It hung at that level (due to some summer costs/travel/spending) until the backpay came in and let me zap it down to zero at last. 

I am continuing to maintain the 'forced frugality' that I self-imposed in the spring to pay things down, and my goal is now not to spend anything on the Visa which I do not have in cash to pay off immediately. 

I looked at the cost of carrying that average of $4K visa bill for 2+ years, and it was about $80 a month in interest.  Multiply that by 24 months, and that's damn near $2000 wasted on interest.

If there is one thing you can do for yourself, it's not to waste that $80 a month on interest charges. 

I know that the 'silly incidental' costs are going to creep back in on me, but I'm intent on spending more intelligently going forward.  Looking at my career, I see a path of a bit over 7 years.  It'd be nice to have some money to play with at the end of that instead of a load of debt.

NS
 
That's great that you were able to pay all of that off. Credit cards can be very beneficial (I use my credit cards for virtually everything that I can), but yeah, you really have to make sure that you can pay it off in full every single month. If you ever find yourself in that situation again, you could consider doing a balance transfer. For example, you could transfer that outstanding credit card balance to another credit card and it would be 0% interest for 12 months vs. probably 20% interest for your Visa. That way you'd be able to make payments while not accumulating interest charges for an entire year.
 
Let's not forget that the Bank of Montreal is now our DND banking group and they offer some pretty sweet deals. We had them come in to work recently to brief us on things. The Mortgage rate we were quoted was a good .5% lower than others. They have free options as well including e-transfers.

I'd look into that.
 
Here is the BMO info for easier reference:
https://www.bmo.com/main/personal/canadian-defence-community-banking#getting-established
 
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