It's an option. Even more so for people who need to have cash or perform transactions in USD that preclude credit cards.
The breakeven point for a brokerage charging $6.95/trade is less than $500. After that, it's just more money in your pocket.
Tangerine (ING Direct) has gone massively downhill.
- Thread starter Motorcycle Mike
- Start date
It's an option. Even more so for people who need to have cash or perform transactions in USD that preclude credit cards.
The breakeven point for a brokerage charging $6.95/trade is less than $500. After that, it's just more money in your pocket.
Dresden
Well-known member
I was explicitly told that I cannot do this (RBC). Also worthy of note, it is one of the most common techniques to "launder" money ... overpay/deposit the money into a credit card / line of credit.. then withdraw again. FINTRAC has cracked down on this hard since 9/11.
RBC is one that forbids it but CIBC allows it as does TD. If you have a CIBC loc (or TD?) there is no point in also having a chequing account as the loc has cheques as well and accepts direct deposit.
It is not illegal to overpay a credit card or loc. Many people do this if they are going on trips or making a purchase. They only care about where the funds are coming from for the most part. They do not care if you spend it at bars, their anti-money obligation is where is it coming from for you, not what you do with it. If you transfer from your chequing account to credit that is 100% fine because that is a clear and visible ownership trail especially if it is your own products. Deposits, if its an ETF usually they don't care because the origin is clear. If you're depositing cash then they are much more curious. Or if your credit card is being paid by people other than yourself. Etc. I actually do know about this subject.
It is not illegal to overpay a credit card or loc. Many people do this if they are going on trips or making a purchase. They only care about where the funds are coming from for the most part. They do not care if you spend it at bars, their anti-money obligation is where is it coming from for you, not what you do with it. If you transfer from your chequing account to credit that is 100% fine because that is a clear and visible ownership trail especially if it is your own products. Deposits, if its an ETF usually they don't care because the origin is clear. If you're depositing cash then they are much more curious. Or if your credit card is being paid by people other than yourself. Etc. I actually do know about this subject.
Companies should just stay off social media. In the end, it exacerbates customer dissatisfaction and creates more ill-will when word finally gets out that nothing got accomplished or resolved in the end.
"Your comments and experience will be forwarded to the right team for review."
LOL.
New social media policy should be: Free iPad for your inconvenience or GTFO.
Yeah I overpay my credit card before I go away in case I need to take cash out on the card.
For people who use credit cards to gamble with, making cash advances from the card and receiving deposits sometimes into the credit card sometimes into their chequing account, is not a prohibited activity for many Visas as casinos, horse racetracks, etc exist legally. What is looked for is are you losing money or making money? The house always wins. If you are a _regular_ gambler and you're making more than you lose, something is wrong. You should never be making money gambling.
Motorcycle Mike
Well-known member
Companies should just stay off social media. In the end, it exacerbates customer dissatisfaction and creates more ill-will when word finally gets out that nothing got accomplished or resolved in the end.
"Your comments and experience will be forwarded to the right team for review."
LOL.
New social media policy should be: Free iPad for your inconvenience or GTFO.
Yeah, I completely agree. Here is the latest response... one that I am not going to bother replying to.
At least I found out about this problem before it was a big issue. I would hate to ruin a trip over banking inconveniences.
I think I am going to try TD. They offer a lot of freebies if you maintain a balance, and they have a growing network in USA as well, so I should be able to cover my bases with them.
Diesel: For me I am happy to see Corrie's response because it is stated if you tell them in advance you are travelling then there is no problem.
As far as the TD goes, their premium all-inclusive package that you referenced is pretty great but you have to leave 5k in the account otherwise it is $30/mo. Good if you have no debt.
As far as the TD goes, their premium all-inclusive package that you referenced is pretty great but you have to leave 5k in the account otherwise it is $30/mo. Good if you have no debt.
Motorcycle Mike
Well-known member
Except expect to be on hold for 30 minutes to an hour just to tell them you'll be traveling only to get a rep who doesn't know how to safe flag your card and you get blocked anyway.
As for the TD account, I'm thinking that I currently keep around $5k in a TFSA savings account (I know that is redundant with that acronym, but I also have a TFSA mutual fund account) as an emergency resource that only earns about $60 a year interest. I could move it to People's Trust or something and make up to $120 a year off it, but then it would be less accessible and less of an emergency resource. Now I am thinking just keep that $5k in the chequing account, don't make interest but also don't pay fees, and it is easily accessible if needed. So it would 'cost' me $60 a year or $5 a month to have this premium account, but I would get a lot of benefit over and above a PC or Tangerine account (such as free drafts, traveler cheques, etc).
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I see it as a good thing to manage the taxes separately from the bank!
Fair enough. There are advantages and disadvantages to both ways. I gave the bank way a try and it was working well for me, now I'll try the other way and see how things go.
I see it as a good thing to have the choice to manage the taxes separately from the bank or not to.
If there are other companies in your industry offering more flexibility and choice than you do, you're going to lose customers, despite retaining what little customer base that prefers doing things in the rigid fashion that you impose on them.
The reason the bank doesn't mind dealing with taxes often is because if you don't pay the taxes the city comes after you and the bank can't stop them and the property is sold for taxes owing and the bank gets whatever is left. If the bank handles your taxes for you for a fee+interest, they don't have to worry about the city coming after you for nonpayment and they get paid to protect their own interests.
If you miss a city payment the city will fee you but the fee is small. If you miss a bank payment and they're also handling taxes I imagine the fees/interest are more than if you just missed a mortgage payment.
Do the taxes yourself.
Edit: Also, if not a separate account billed separately, if it gets tacked onto your compounding principal over 25 years that erroneously perceived convenience could add up to a pretty penny because if your taxes are 6k a year and it gets plunked on top of your mortgage but you are only paying 1k a month you are now paying extra long term interest.
If you miss a city payment the city will fee you but the fee is small. If you miss a bank payment and they're also handling taxes I imagine the fees/interest are more than if you just missed a mortgage payment.
Do the taxes yourself.
Edit: Also, if not a separate account billed separately, if it gets tacked onto your compounding principal over 25 years that erroneously perceived convenience could add up to a pretty penny because if your taxes are 6k a year and it gets plunked on top of your mortgage but you are only paying 1k a month you are now paying extra long term interest.
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There were no fees or interest associated with the taxes. They collected $xxx per mortgage payment and kept it in a tax fund (this money is on top of the money required to pay the mortgage). Sometimes the fund had a positive balance, sometimes it had a negative balance, interest was neither collected nor paid on the tax fund. When reviewed over a year, the money collected for tax was all transferred to the city.
I luckily never missed a payment, so I can't comment on fees associated.
From a cash flow perspective, steady withdrawals throughout the year are preferable to a few large transactions. I could setup a similar plan with a separate tax account on my own, but my main account charges me for every transaction over 10, so I would end up paying extra service charges.
My two cents is back stop yourself with two of everything, maintain two charge cards or three, have a debit card with two different financial institutions if you travel a lot. We have only had a debit card and charge card shut down locally , but sitting in PangoPango on hold to get a Visa card back online sounds very unappealing. Sadly for those looking at TD, I was told they are a separate institution in the US and TD Canada and TD US has no cross functionality, may be no gain there.
Motorcycle Mike
Well-known member
I went to TD yesterday, and while that is true that TD USA is separate from TD Canada, they still make it very easy to open a TD USA account and link it to your existing TD Canada account. They handed me a passport shaped booklet titled Your Passport to Cross Border Banking or something like that that outlines the benefits and process. I have yet to look into it.
I also asked what would happen in the scenario that I posted above with TD. This adviser claimed that I would not have to return to Canada to unblock a TD debit card, and I while a separate institution I could use a TD USA branch to verify my identity and help me out in a worse case scenario debit card malfunction.
