What's your loss threshold for opening a new account?

[ALsat]

When you compare and calculate your potential gains/income from various savings accounts, perhaps at times you feel at bit ticked off that such and such institution is offering 4.5% whereas your institution is only giving you 4% etc.

At one point do you say enough is enough and open a new account at an institution offering a higher rate?

Another way of asking the same question would be:
Would you open a new account at another institution for

$50?
$100?
$200?
$500?

or do you not bother unless your loss is in the thousands?

There's no correct answer to this question BTW. It's purely a personal thing.

Where does your personal threshold lie?

[felinusz]

I have no particular amount in $ which I look to gain from an account switch.

I am concerned with:

~ the interest rate % increase I get
~ the convenience / ease of use with the specific specific institution's interface
~ the bank's reputation
~ the difficulty and hassle of opening yet another account

Calculating an amount $ you will "make" by switching accounts is not really a particularly logical way to judge whether it is worth switching or not, because it assumes not only a commitment on your part to the new account, but also a fixed interest rate % on the part of the institution providing the account.

I take all of the above mentioned factors into consideration when moving my savings around.



For example, I refuse to use ICICI's savings account, because of my earlier firsthand experience of their web interface, and inadequate (by my standards) support. CDIC insurance is great, but I question how long a payout would take. I can easily imagine my money locked away for at least a month, possibly longer, earning no interest, should something happen to a bank such as ICICI Canada. It took them almost a week to correct a double transaction which their system erroneously made, that spoiled my personal confidence in them.

I prefer ING Direct and PCF for their fantastic support, brilliant web interface, and ease of use. I actually find myself preferring ING over PCF, even with their substantially lower rate, due to their web interface, which is the second best I have come across thus far (second only to TD - but TD is my main bank, and I have several different accounts with them).

Currently however, I use TD's savings account, on account of a high promotional rate, the convenience of a physical branch, and the easy interface with my other TD accounts. I don't personally need more than 1 free transaction of course.


I'll be ditching TD in April 2008, of course ;).

[xlfe]

Shouldn't it be potential gain threshold?

I'm sticking with ICICI for now because of the interest rate but sooner or later i'll be making my jump to outlook. It makes the most logical sense for me because it's a fixed rate for a 5 year GIC and I don't want to play the stocks. I'm a person that would check my stocks everyday if I had it and would probably get stressed over dips and losses.

This is all before I got into financial management. While I was a student I just wanted all my money in one spot, it was like paying my bank to hold my money, and that's exactly what they did. I seriously hate scotiabank now, long line ups, rates aren't that great; actually I didn't even get interest on my account..., fees for so many things... I try to deposit my government tax check and it's put on hold for 5 days... If I had known sooner that i didn't have to put up with their **** i would have switched much earlier. It wasn't until after i switched they introduced their "money master" account where u could actually get decent interest and it was free to make transfers. Before I left i attempted to get a student account twice but they never actually changed it. I would have switched to a better bank for free, and i did to PCF. Looking back I had to keep over 2k locked away in a checking account to avoid service fees. Did that for about 7 years... Assuming 4% interest (bad assumption i know) that would be $360 I could have made.

As felinusz said though he refers to savings accounts you can't assume the rate will last very long. However that being said I would change accounts for 0.25% more interest with no reasonable doubt that it's a promotional rate only.

[jackieskwong]

at least $500 and even than i want to look at the 'fixed rates' account, not those promotional accounts where i get X% until April 2008.

[ALsat]

Interesting thoughts and perspectives. Yes I agree; there's of course no guarantee that an institution's advertised rates won't change the next day.

When I come to think of it, without having specified yes I also consider most of the factors mentioned such as

- the bank's reputation,
- ease of use,
- what they're offering,
- how much hassles, expenses, and restrictions are built into their plan,
- and feedback from others,

before focusing on how much I stand to gain by switching to them.

However in the end even if I like everything I see, I would not switch or open a new account, if my potential gain is any less than $200.

So if there's a 0.25% of difference, would I open a new account then?
Currently, I'd say no.

But if I had a min. of $80,000 (which means I'd be getting $200 more at the end of the year), then I would.

[cadave]

I was pretty mad when PCF dropped their interest rates on their savings account and my initial knee jerk reaction was "Screw this, I'm moving all my money to my HSBC account."

But then when I really thought about it, I enjoy the fact that my savings and chequings are both at PCF and it only takes 1 day to transfer from savings to chequing. I don't keep very much money in my CHQ so I can generate as much interest as possible.

Like you ALsat, I consider

- Bank's reputation (CDIC protection?); and
- Ease of use and banking interface

But I also consider

- Availability/Access to funds (proximity of bank machines, banking/atm network, customer service)
- Account features (how many times can I withdraw each month? etc.)

With regards to opening a new account at an institution, it depends on how much they offering based on how much I have to invest.

For example, I opened an HSBC account because they gave me $50 for only investing $100.... good return.

However, if it was $50 to close my current savings account and transfer all my funds, I wouldn't do it. It'd have to be around $200 for me to consider that... and then I'd still consider the factors listed above.

[felinusz]

For example, I opened an HSBC account because they gave me $50 for only investing $100.... good return.

However, if it was $50 to close my current savings account and transfer all my funds, I wouldn't do it. It'd have to be around $200 for me to consider that... and then I'd still consider the factors listed above.


Good point. Deals like that shouldn't be passed up :)

[brunes]

When you compare and calculate your potential gains/income from various savings accounts, perhaps at times you feel at bit ticked off that such and such institution is offering 4.5% whereas your institution is only giving you 4% etc.

At one point do you say enough is enough and open a new account at an institution offering a higher rate?

Another way of asking the same question would be:
Would you open a new account at another institution for

$50?
$100?
$200?
$500?

or do you not bother unless your loss is in the thousands?

There's no correct answer to this question BTW. It's purely a personal thing.

Where does your personal threshold lie?

Really the question is what is your free time worth. If you consider that you're likely going to spend at least 3-4 hours total to open the account, set up things, call the banks, transfer the money, etc etc, then you have to ask what is that 3-4 hours worth.

To me I consider my free time valuable and if something takes me an hour of extra effort out and about it damn well be saving me at least $25. So for me, it would be $100.