Ways to avoid Minimum Balance..??

[hhh]

I'm currently banking with TD (Value Account), and i don't want to go through the hassle switching to another bank since all my direct deposits are to this account. Are there any ways to avoid the $1000 minimum balance, because its useless just sitting there to avoid service fees, rather put it in GIC or something.

[shinichi]

$3.95 is the service charge if you go below $1000 is that right?

$3.95 * 12 = $47.4. So unless you can get a GIC / saving rate higher than 4.74% the money is better put there.

Another way to avoid paying chequing account fee is to open a line of credit. They are usually free of service charge and basically you setup all your payment against this account so you don't have to worry about late payment / not sufficient fund / overdraft etc. You can deposit some money from your saving account first to avoid interest if you want to.

[gman]

$3.95 is the service charge if you go below $1000 is that right?

$3.95 * 12 = $47.4. So unless you can get a GIC / saving rate higher than 4.74% the money is better put there.

In addition, the interest you earn from GIC is fully taxed. Depends on your tax bracket, 4.74% GIC is not good enough.

[T-Bone]

Do the comparison:

1. Put $1000 into ING ISA get $2.50 per month in interest which is taxable. (3%)
OR
2. Put $1000 into TD Value and save your $3.95 monthly fee, which isn't considered taxable. (4.74%)

Keeping that $1000 in your TD acct is a better value. Better yet, why not put that $3.95 you save every month at TD into a ING - ISA.

[pipolchap]

PC financial? Unless you're a heavy user of in-branch services...

[jerryhung]

Yeah, PCF is really the only no-fee good solution

At least you only have $1000 in TD
I need $5000 min. for Select Service (worthwhile for me though)

[Tharyn]

Yeah I have both PC Financial, and a TD Value account, I just keep 1000 and change in my TD Value to avoid fees. I think of it as "emergency" cash should anything ever happen.

Gets the job done.

--Mark

[sparkplug]

The problem is you're not retaining exactly $1000 or $5000 in your account. Your actual floating balance is more like $1764.38 or $6212.78. So TD is earning money off your balance that's always going to be greater than the minimum balance.

I have the TD Select account that gives me excellent perks. I'm still assessing whether it's worth retaining $5000+ in the account every month.

[T-Bone]

Humm...I wonder if the bank would allow you to keep the min. balance in your checking account to aviod monthly fees and then have a no-fee savings account setup to carry your "float" amount, which would automatically transfer to the checking account when you withdraw funds, like when you use your debit card at a store.

That way you could get free banking but also have your float money making you money as well.

Anyone have this setup? I would assume that it wasn't in the banks best interest to do this.

[sunnybono]

I'm currently banking with TD (Value Account), and i don't want to go through the hassle switching to another bank since all my direct deposits are to this account. Are there any ways to avoid the $1000 minimum balance, because its useless just sitting there to avoid service fees, rather put it in GIC or something.

If you are so concerned about the $1000 minimum balance, then just ask the bank to put a permanent partial hold of $1000. Thus you will never go below $1000. However just remember if you write a cheque or have an automatic withdrawal, the item(s) will bounce and I beleive they, if they haven't already, will be raising their NSF fee. :)

[ayeung]

I also have $1000 sitting in TD chequing doing nothing just to avoid the service fees, which amount to about $40+ a year. It's a bit annoying, but I sometimes do need some in branch service, like bank draft when I buy a new house, acting as a hub - doing lump sum payment to TDmortgage and tranfering in and out money to TDwaterhouse ...These things can't be done easily and quickly with PCfinancial/ING.

[ALsat]

Once the monthly interest you receive on that $1000 exceeds your service fee, then screw keeping the minimum amount. Load everything into your savings account and pocket the difference.

Until then, keep the min. amount - because you're saving more that way. :)

[lesnar]

what happens if you have $0 in your account...how will they deduct the fee?

[arnyk]

Once the monthly interest you receive on that $1000 exceeds your service fee, then screw keeping the minimum amount. Load everything into your savings account and pocket the difference.

Interest earned is taxed as regular income, service fees could (actually not sure here so don't beat it up, I've never paid a fee in my life) be considered a carrying charge and be tax deductible. So that's probably the most inefficient way to do it.

[gqbluez]

Interest earned is taxed as regular income, service fees could (actually not sure here so don't beat it up, I've never paid a fee in my life) be considered a carrying charge and be tax deductible. So that's probably the most inefficient way to do it.

The bottom line is though if you keeping your money in TD is only helping you to avoid the service fees whereas you could take that 1000 and say dump it into a high interest savings account, after tax deductions if youre balance is still higher than what you would have to pay for the TD service fee's it may still be worth going for since youre still up either way be it a dollar or more. Everyone's situation is going to be different. Sure there are ways to maximize your return but if youre just looking to get a positive instead of a neutral the way the other poster suggested could work, especially if the tax bracket you are in exempts you from having to pay heavy taxes on your interest.

[Lyrrad0]

If you only occasionally need the select service services from TD (eg free cheques), it's possible to just keep the $1000 value account most of the time, then put in the extra $4000 when you need it, order the cheques, switch back to value, and take the extra money out. This can be done electronically through easyweb.

Though, if you need something more, then this might not be a good idea.

[napoleonz]

Humm...I wonder if the bank would allow you to keep the min. balance in your checking account to aviod monthly fees and then have a no-fee savings account setup to carry your "float" amount, which would automatically transfer to the checking account when you withdraw funds, like when you use your debit card at a store.

That way you could get free banking but also have your float money making you money as well.

Anyone have this setup? I would assume that it wasn't in the banks best interest to do this.

Don't think you are getting any advantage by keeping just $1000 and nothing more. The bank easily get an APR of 6-7% and up from investments/mortgage/LOC loans...easily covering the waived cost. So spare no mercy, if it work for you....by all means. ;)

[jeeva86]

I have the TD Select account that gives me excellent perks. I'm still assessing whether it's worth retaining $5000+ in the account every month.

I got TD Select Service too, but what excellent perks are you getting? I can't even get a single cheque and have to order in bulks of 50s. I don't pay any fees basically but am I missing out on some other things?

[techwiz]

I had a youth account which was converted to the Value one recently and TD took $3.95 out of my account which had a balance of $10. Sigh... oh well I only used it for PayPal anyways.

[nolookingca]

I got TD Select Service too, but what excellent perks are you getting? I can't even get a single cheque and have to order in bulks of 50s. I don't pay any fees basically but am I missing out on some other things?

But aren't cheques free with the Select Service account? Besides, I think the minimum order (with TD at least) is 50 regardless of account.

[Bullseye]

But aren't cheques free with the Select Service account? Besides, I think the minimum order (with TD at least) is 50 regardless of account.

With a TD LOC, you can order LOC cheques for free, that's what I do.

[dealhunt]

Althougn I despise RBC and switched to PC Financial from them, I still maintain a Signature Plus Pay As You Go (http://www.rbcroyalbank.com/RBC:RNFsAY71A8cAARIeLxQ/products/deposits/signature-plus.html) chequing account with them. I keep a small balance in there as a backup if PCF's network be interrupted. Also, it allows me to have in branch services the very few times I need it. I get dinged on every transaction I make with this account, but there is no monthly fee.

[simms]

what happens if you have $0 in your account...how will they deduct the fee?

I like how you brought this thread from the graveyard.. if you have 0, they will deduct and you'll have -ve balance.