Street Cents

Bank accounts

Which bank offers the best account for teens?

Student accounts

President's Choice No Fee Bank Account and Interest First Savings Account

The President's Choice No Fee bank account is a chequing account that's available to anyone of legal age in the province.

The account came out on top for student accounts. Technically, the President's Choice accounts aren't classified as "student accounts". But, they are the best deal for students.

The upside:

The reason President's Choice came out on top is because this account is free. There are no monthly service charges and all transactions are free of charge. That includes all banking machine transactions (at President's Choice and CIBC bank machines), all phone and Internet transactions and all Interac transactions. It also includes pre-authorized payments and bill and credit card payments.

This is an awesome account for anyone who makes a lot of transactions each month. We end up paying nothing for the services.

This is also a great account for anyone who wants to earn a lot of interest. President's Choice Financial pays higher interest rates than most other basic accounts. It can range from 0.25% to 3.25%, depending on how much money you have in the account. This is quite high compared to the minimum 0.05% interest most banks pay.

The no fee bank account is also a great option for people who write a lot of cheques. We get free, unlimited amounts of personalized cheques. Whenever we run out, we call the customer service line and ask for more.

President's Choice also offers free grocery money and points for certain banking transactions. For example, anyone who starts a direct deposit gets $20 in grocery money. Gotta love free food.

Also, people who want to earn great interest can open the President's Choice Interest First Savings Account. It pays 3.25% interest, regardless of how much money is in the account.

The main difference between the "no fee bank account" and the "savings account" is interest rates and accessibility to money.

The "no fee banking account" is a chequing account. It is an account that's used to pay bills and to withdrawal cash. Users have unlimited access to their money in this chequing account via bank machines and Interac.

The savings account is just that - a place to save money. We can't get money directly from the savings account. We have to transfer the money to our chequing account before we can spend the money. It takes 24 hours for the money to transfer from the savings account to the chequing account. But the transfers are free of charge.

The flip side:

First, there are no in-bank services available through President's Choice. That means we can't go to a teller for help. All transactions must be done online, via phone, at a bank machine or through Interac. So, anyone who likes teller-assistance may not like this account. There is customer service via telephone and there are President's Choice Financial representatives in pavilions at grocery stores. These people can help answer any questions we may have.

Also, we have to be the legal age in our province to open an account with President's Choice. That's a bummer for those of use who aren't 18 or older.

Finally, President's Choice companies will target us bank users for direct marketing. The companies will send us information about products and special promotions in their stores. They will send this information via mail, telephone or other means. We have to tell the company if we don't want to receive this information.

Some other notes:

The President's Choice Financial system is affiliated with CIBC. While President's Choice provides the customer service and other bonuses, CIBC provides the financial services. That means we can go to CIBC banking machines to do our banking. But that's it. We can't go to CIBC banks for teller-assistance. We don't get the same advantages we would get with a CIBC account. Think of it as two different banks under one company.

Scotiabank Student Banking Advantage Plan

The Student Banking Advantage Plan is available to any full-time student attending a Canadian university, community college, CEGEP or other post-secondary school.

The upside:

This is a great deal for anyone who can guarantee they'll have at least $2,000 in their account at all times. With a $2,000 balance, we'll have unlimited free transactions, plus no monthly maintenance fees. We'll also have access to online and telephone banking and we can write cheques on this account.

But, how many students have $2,000 floating around in their account year-round?

The flip side:

If our account balance falls below $2,000, we end up paying a monthly fee of $1.25. This monthly fee covers the cost of our 12 most expensive transactions. After that, transaction fees are 50% less than the cost of transactions in general accounts at Scotiabank. But, the cost could still add up.

Transactions will cost between $0.20 and $0.40 per action.

The interest rate for this account bites too. We don't get any interest if our balance is below $3,000. When we do manage to save $3,000, we'll get 0.05% interest. It goes up to 0.1% when we manage to save more than $5,000. And, if we're some rich student who manages to have $10,000 lying around, we can earn a whopping 0.15% interest. In the grand scheme of things, this is lousy pay.

Some advantages to this account:

Students who have this account have easier approval for a Scotiabank Classic VISA and will receive a $500 credit limit (subject to credit approval), and no annual fee for as long as they are students.

Students also get easier approval for auto loans and lines of credit at Scotiabank

CIBC waive account with reduced fees for students

The CIBC waive account with reduced fees for students is available to any college or university student.

This account is similar to the President Choice "no bank fee" account. It is a chequing account that gives customers unlimited monthly transactions, free of charge. The difference between this account and the President's Choice account is that we have to keep a balance of $1,000 to get these free services.

The upside:

If we use this account with a CIBC Premium Growth account, it'll be similar to using the two President's Choice accounts.

The Premium Growth Account is a savings account. It pays higher interest rates - at least 1.5%. However, there is a $0.50 charge for every transaction made with the Premium Growth account. But, transfers are free of charge. So, just like President's Choice, we can save money in the Premium Growth Account to earn high interest. When we need to spend the money, transfer it into the waive account (free of charge) and spend it out of the Waive account.

There are a few advantages to using CIBC over President's Choice:

We don't have to be the provincial legal age to open an account. These accounts are designed especially for students.
There are bank tellers and branches available to help us with our banking.

The flip side:

If an account balance falls below $1,000, we end up paying $2.00 for the first 12 transactions. That's about $0.16 per transaction. After that there's a cost of $0.25 for each transaction. That's still a 50% discount off the regular transaction fees on CIBC accounts. And it's still competitive with other banks' transaction fees. But, it is a cost we can avoid if we stick with President's Choice.

The interest rate is minimal with this account. We only receive about 0.5% interest when we have $3,000 or more in our account. But that's still better than the interest paid at other banks for the same balance.

Other disadvantages to these accounts, compared to President's Choice are:

If we have the Premium Growth Account for youth, the free services will expire on our 18th birthday. There's no expiry date with President's Choice Financial.
With the waive accounts, we have to keep a balance of at least $1,000 to get free transactions. There's no balance limit for President's Choice.
We don't get the grocery rewards.

Royal Bank Student Signature Plus Banking

The student banking account is available to any full-time student in Canada.

The upside:

Online telephone and banking access is free of charge.

We also get cheque writing privileges and no maintenance or record-keeping fees for these cheques.

There are some additional advantages to the Royal Bank account:

At the time this article was written, the interest rate at Royal Bank was better than at other banks:

Any balance under $1,000 = 0.05%
$1,000 - $3,000 = 0.1%
To $5,000 = 0.15%
Above $5,000 = 0.2%

There are also bonuses when we open a Royal Bank student account. Everyone who opens an account gets free enrollment in the Student Price Card program, which provides discounts at over 1,500 retail outlets.

We also get free purchase insurance on anything we buy with our bankcard.

And, we have better access to Royal Bank student loans and credit cards. Students with this account can be eligible for a waived annual fee Royal Bank Student Visa* Classic II Card (upon credit approval, must have reached the age of majority).

The flip side:

The Royal Bank student account costs $3.50 a month. For this price, we get 25 free transactions, teller-assisted or self-serve. That's about $0.14 per transaction. If we exceed this limit, we pay $0.50 a transaction.

Bank of Montreal's saving and chequing accounts with student Instabanking plan

The Bank of Montreal offers special discounts to students who open savings or chequing accounts. But it is age discriminatory. These savings and chequing accounts are for any full-time student between 21 and 26.

These accounts are identical to the young adult plan at Bank of Montreal.

When we open a savings account, we'll get interest. But, the interest rate for these accounts is minimal. It ranges from 0.1% to 1%. Anyone who has one of these accounts and wants to be eligible for better interest can open an additional account called the Premium Rate Savings Account. We must have one of the above basic accounts before we can open a Premium Rate account. At the time we wrote this article, the Premium Rate account paid 1.25% interest for a balance below $5,000 and 3.85% interest for a balance above $5,000.

Anyone considering one of these accounts should also be cautious and choose an account that's suitable for them. That's because we can choose a chequing account or savings account with these plans. People who choose the savings account can't write cheques, but will earn interest (as minimal as it is.) Also, if these people go beyond 20 transactions, they will have to pay $0.75 per self-serve transaction and $1.25 per teller-assisted transaction.

With the chequing account, users can write cheques, but they won't earn interest. However, they'll only pay $0.50 per self-serve transaction and $1.00 per teller-assisted transaction after they've used their 20 free ones.

TD Bank/Canada Trust Student Discount Self-Serve Account

The Student Self-Serve Account is available to students enrolled in a Canadian full-time post-secondary university program.

The upside:

Anyone who can maintain a monthly balance above $1,500 will pay no monthly maintenance fees.

This account is similar to the regular TD self-serve account but gives students a 50% discount on monthly fees and transaction costs.

We'll also have access to telephone and online banking. And, we can write cheques on this account.

The flip side:

There's a monthly fee for this account: $3.45. This includes 20 self-serve transactions for free. (Banking machines, Interac, etc.) That's like paying $0.17 per transaction.

If we go to a teller, expect to pay a $1.00 teller-assisted transaction fee. Any self-serve transactions above the free 20 will cost $0.50 each.

The interest rate is minimal. We won't start earning anything until we have $3,000 in the bank. Even then, the interest is only %0.05

<< back

original air date: November 5, 2001

Page 01: Viewer Letter & Responce
Page 02: Account type and details part 1
Page 03: Account types and detail part 2

Back: to Episode 04

Street Cents rates student accounts

Here they are, in order of best to worst:

President's Choice No fee bank account and Interest First Savings Account (This is not a student account, but is still the best deal.)
Scotiabank Student Banking Advantage Plan
CIBC Waive Account with reduced fees for students
Royal Bank Student Banking
Bank of Montreal's chequing and savings accounts with Instabanking student plan
TD Bank Student discount self-serve account