The poor Vancouverite (Part 1)- saving money in Canada & while travelling

I like reading travel blogs, especially on how to save money to go travelling. However, I find most of these blogs cater to residents down south. (Americans) so here are a few tips and pointers I use in order to not let big companies steal my money. I will cover as many topics as I can think of.

This post will cover financial institutions and their various products (except credit cards covered later)


Day to Day Banking

I spent 2 years working in a large financial institution in Canada from being a teller to drawing up mortgage contracts. So I know first hand how banks gouge you for fees and how limited of a choice Canadians have for banking services. While USA has thousands of little banks, in Canada we have 5 big banks, a bunch of credit unions and thats about it.

To my knowledge, very few banks in Canada have free day-to-day chequing accounts with no minimum balance. The three I can come up with are :

PC Financial, ING Direct and Coast Capital Credit Union. I personally use ING Direct and have a generally positive experience with them. Setting up is easy, their ATM network (EXCHANGE) is large, the first 2 books of cheques are free and they frequently have promotions where if you change your payroll deposit account to ING they will give you $50. As well, as they are 100% on-line banking only, I find that they are much more flexible when you are required to speak to a representative than if you were to go through online banking at a bank with branches. An example would be when I lost/misplaced my debit card: In a bank with branches, I would have to find a way to visit the branch during opening hours, wait in line for 20 mins, get a temporary replacement card and then wait for my  real card to come. Whereas for a on-line branch, I do not need to physically show myself to a representative. Of course, the downside to this is that you have to wait for a card to be mailed to you, but this is why I advocate to have a savings account of some sort at a large bank in emergencies such as this.

Larger banks have free chequing accounts if you have a certain minimum deposit, they will even set it so that there is unlimited transactions per month. (O lala !). However, I find that they will ‘ding’ you for anything such as visiting the teller, cashing a cheque, asking for transaction history and is generally not worth the hassle of waiting in line. However, there is one account that I think is great and am about to get it before I set off on my travels: the TD select account.

The TD select account allows for withdrawals outside of Canada WITHOUT service charge in any ATM. No other Canadian bank accounts do this. Not Scotia , not HSBC, not ING. I believe Scotiabank has free withdrawals for certain affiliate banks, HSBC has free withdrawals for its worldwide ATMs. ING charges the 2nd lowest rate at a $2 per transaction service charge. HSBC I believe charges $3 while other banks including TD other accounts charges $5! Imagine you are withdrawing cash once a day while travelling around the world, on top of the 3%spread the bank charges you for exchange to a foreign currency, the foreign ATM machines own service charge fees (watch out for those!) , you have to pay another $5. $5×365 is $1825 , that’s a lot of money to give away. So there you have it, TD Select is the way to go, IF you have $5000 in your chequing account at all times. If you plan to drop below that amount even for one day, don’t do it because you will get a lovely $30/month service charge. If you will drop below $5000, use ING, at least $2×365 is only $730 you are giving away.

Of course it is always important to have a account in one of the big banks in Canada. I suggest just having a savings account as you are often allowed 1 free transaction a month, you get interest and it acts as an emergency fund in times when you have lost your online bank debit card. As well, in times when you need a Draft or to Wire money overseas, an account in the big banks will prove to be hassel fee (though you will sob over the fees).

Overseas ATM and exchange rates

Having covered ATM service charge fees for your own bank in the above section, I will now cover the foreign bank section. Foreign banks also charge an arm and a leg for the ‘service’ of letting you use their ATM. Luckily, they tell you in advance how much the fee is and you can always just walk away. I always run around a few banks if I have to choice to compare prices. The difference in prices are starteling! So charge upwards of $20 while others charge much less.

Before you go on a trip, unless you think you will not survive without the destination country currency before you leave customs, don’t exchange it at home! The rate is terrible, I know, I use to be the one that ordered the cash for the customers at the bank.  An interesting side note is that the bank that orders currency  from Thomas Cook is getting an even worse rate than they are giving you as on top of the exchange rate they also have to pay for courier fees. I have always seen ATMs right after customs at the airport and never have felt the need to exchange cash in advance.

(On the point of interesting side notes, Thomas Cook actually has a lower exchange rate for the Scottish Pound than the British Pound, even though they are the same currency. So use those Scottish Pounds or exchange them for British Pounds while you are still in the UK!)

Loans, Debt and the stuff no one wants to think about

A lot of people in Canada have debt. A lot a lot a lot. Young people, middle aged people, old people. When I was at the bank, part of my job was to accept/reject loan applications that came from online applications throughout Canada. On average, we rejected 50% of applicants (from loans, LOC to mortgages) because their TDSR (Total Debt Servicing Ratio) was so terrible already.

So what do you do if you have too much debt. Well, obviously pay off the ones with the highest interest first such as the credit cards. But if you can’t pay it off all at once, do apply for a ‘consolidated loan’  at a bank. This is a loan where you ask the bank to pay off all your outstanding high interest debts such as multiple credit cards and replace it with one low interest one , hence, consolidating your debt. After that, cut up your credit cards. If you don’t know how to use one properly, don’t use it.

And if you are even deeper into the hole such as taking out cash advances, using payday loans. I am sorry, there is no help for you (at least from me). You need real help, call an expert.


Hong Kong. Travel. Climb. In that order.

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