Banking on financial flexibility


Resources are readily available for students but they often forgo shopping around at various banks, instead choosing to bank wherever their parents do.

For those students who aren’t finance majors, talking about interest rates, debit card options and student banking plans can be a nightmare.

The fact is, a simple Google search or quick chat with a financial adviser can provide the information students need to decide what banking plan suits them.

But even with resources readily available, many students forgo shopping around at various banks, instead choosing to bank wherever their parents do.

According to a Canadian StudentAwards survey conducted last year, 38 per cent of young people bank where their parents initially set up their account.

John Cruz, financial services manager at BMO, says he sees a lot of young people mimicking their parents’ banking decisions.

“If they see their parents are financially stable and not having any trouble with the bank, it encourages them to model after that. Choosing a bank is a big financial decision in their financial lives and a lot of the time parents are sitting in with their kids, opening the accounts with them.”

This was the case for first-year business technology management student Jake Fernandes, whose parents were in the meeting when he opened an account with the family bank.
“It’s simple. I chose TD because my parents chose it,” he says.


How student-friendly is your bank?

Ruby Dhaliwal, a fourth-year aerospace engineering major, says choosing the family bank was an easy decision. “I think it was just comfortable. They are already comfortable with that bank so I just went with it too.”

This go-with-the-flow attitude isn’t always the best way to go about banking, according to associate professor Coleen Clark, who teaches a personal finance course at Ryerson. “Students need to look at not only their needs right now, but also what their needs will be down the road. They need to have a sense of where that (bank) will take them when they graduate.”

The big five banks are: CIBC, TD, RBC, BMO and Scotiabank.

Banks have a lot to offer young people and it’s worth spending the time to shop around.Each bank offers a unique student plan with a range of debit, credit and savings options.

Debit Features

If students know they are going to use their debit cards daily, CIBC and Scotiabank are ideal choices. They offer unlimited debit transactions for no monthly fee.

BMO on the other hand, charges students $4 a month for something called the “performance plan,” which offers unlimited banking. For students who need unlimited transactions only a few months during the year, BMO allows them to go between the regular and “performance plan” from month to month.

RBC also offers unlimited transactions through its “no limit banking for students” plan, but it comes at a whopping $10.95 per month.

Credit Card Plans

CIBC offers a “classic Visa” credit card with a low $500 balance. For students, the plan has no minimum annual income for the cardholder. Unfortunately, they don’t get a break from the card’s interest rate, which is the same for both students and regular customers at 19.99 per cent.

A seemingly better option is the TD cash back MasterCard, which has no annual fee and collects 0.75 per cent cash back on all purchases. Students can redeem this money through their checking account every year.

Scotiabank’s Visa helps students keep their savings account active with the “bank the rest” option, which rounds up all Visa purchases by the dollar or five dollars and puts that “loose change” into their savings account.

Clark suggests while this plan may get more money into the savings account, students need to learn about saving by actively putting money away, rather than have the bank do it for them.


TD Bank has an interactive student page on its website, with features such as a loan calculator, credit card tips and post-grad advice. The bank also promotes the TD music access program which offers customers special deals on concert tickets and VIP music experiences.

BMO customers enjoy student discounts on products at select stores and restaurants with their Student Price Card (SPC) MasterCard. BMO’s student plan also includes two free Interac e-transfers each month, something no other bank offers.

Scotiabank undoubtedly reigns as king when it comes to extras, offering a free Scene membership for anyone who signs up for a debit or Visa card. Students can receive up to six free movies just from opening an account, and everyday purchases earn points that go toward Cineplex movies.

Every $1,000 the cardholder spends earns enough points for a free movie. The cost seems steep, but for those who pay tuition with their debit card, it can mean up to seven movies gratis every school year.

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