Confessions of a CFP: You may need an online bank
You may need an online bank this RRSP season. I probably shouldn’t be telling you this because I’m a financial planner and in order to keep my job I need people to invest their money with me, but it’s true. Before you completely dismiss the idea of banking online due to your fear of the internet, cyber space and anything online just take a few minutes and read all about the benefits of having an online bank.
Online banks go against everything I believe in when it comes to my professional life, but as an everyday consumer – who needs to invest in her RSP before the deadline – I have to tell you I’m a big fan.
The RSP deadline is March 2 – where will you be?
Hopefully you won’t be in line at your bank. As the RSP deadline quickly approaches Canadians all across the country are calling their financial planners and visiting their banks to find the best possible rate for their RRSP contributions.
What if you didn’t have to go through the trouble of spending your lunch hour waiting in line at your bank and what if you didn’t have to sneak out of work early to make it to your bank before they close?
With online banks you can literally bank anywhere, anytime. Even though the market closes at 4 p.m. and some banks close at 8 p.m. online banks are at your service 24 hours a day, 7 days a week. That’s the first major advantage of using an online bank for your RRSP contribution – it’s convenient.
You don’t have time to make an appointment
Tangerine is a financial institution whose mission is to help clients live better lives, they aim to provide Canadians with the ability to bank where they want, how they want, and when they want. Joe Snyder, Product Analyst, Tangerine Investments says “For the typical Canadian, the reality is that most of their banking needs can be done online, and better yet, on a mobile app. (But) there are some clients whose needs probably require that face-to-face interaction due to a certain amount of complexity.”
With an online bank you can access your accounts and perform transactions from absolutely anywhere at any time. This is especially convenient for people who work shifts or irregular hours. With an online bank there’s no need to rearrange your schedule, all you have to do is tap on your mobile phone or click on your computer. “I think the idea of having to physically fill out paperwork and visit a bank branch is one that will soon be outdated. That being said, many Canadians also have decades-old relationships with their bank and feel a certain degree of loyalty to their primary financial institution.” says Snyder.
You want the best possible interest rate
Superior interest rates is the main reason why I recommend online banks to my clients (don’t tell my employer) and it’s the second major advantage of having an online bank. When clients make an appointment with me they don’t always want my expert investment advice – sometimes they just want a good interest rate.
Andrew Schrage is an online entrepreneur and owner of the popular personal finance website Money Crashers.com. According to Schrage online banking does have several advantages. “(You) can save time over having to make trips to a traditional bank, there’s easier access to your accounts, and you might be able to find better interest rates as well.”
Are you convinced?
Two major reasons why all Canadians don’t have accounts with an online bank are lack of personal service and fear of cyber space, but Tangerine is overcoming those fears one client at a time. “I think the reality is that Canadians have indeed embraced online banking, as online functionality and mobile platforms continue to improve.” Today Tangerine proudly serves almost 2 million clients across Canada with over 500,000 downloads of Tangerine’s mobile banking app.
When making your RRSP contribution this year keep in mind It doesn’t have to be all or nothing. Just because you love your financial planner doesn’t mean you can’t also have an online bank and just because you made your RRSP contribution online to get the best interest rate doesn’t mean you still can’t have other accounts with another bank – or several other banks for that matter.
Tahnya Kristina, CFP
Photo from Flickr