How to Choose a Canadian Bank

Which Financial Institution is Best for You?

Canada certainly has a fair number of banks, and choosing the right one can be a very daunting prospect. Contrary to popular belief, the largest and most popular is not always the best. For example, President's Choice Financial, a subsidiary of the large nationwide bank CIBC, offers online banking only, which has both its advantages and disadvantages.

Advantages of President's Choice Financial

• Higher interest rates than top 5 banks (0.75% with an Interest Plus Savings account).
• Good customer service.
• Simple to use online banking.
• CIBC banking machines can be used at no charge.

Disadvantages to Online Banking with President's Choice

• Customers are unable to speak to tellers in person -- banking is done online only, though help can be accessed over the phone.
• Few President's Choice Financial locations -- they are only located in Superstores.

Now compare this to a larger bank, such as TD Canada Trust.

Advantages to TD Canada Trust

• Tellers are easily available at nearly all TD Canada Trust locations.
• Locations are available all over Canada.
• Offers elements of online banking, but not as intricate as President's Choice Financial.

Disadvantages of Banking with TD

• Low interest rates when compared to PC Financial.
• Charges for various transactions, including debit (after the first two monthly free ones), cheques and bill paying.

These features hold true to each of Big Five Banks (CIBC, TD, BMO, RBC and SB).

If you're willing to sacrifice large scale real-world availability and tellers, then you should definitely go for PC Financial. You make the most money long term, especially when you have under $5,000 (a necessity for reasonably high interest rates with the big banks). In addition to PC Financial, there is ING Direct, another online banking option that has many of the same features and comparable interest rates.

PC Financial is a great online bank with no fees and high interest rates. It does have some sales associates in Superstores all over Canada -- they can answer most of your basic questions if you prefer in-person access rather than the phone.