I’ve often written about financial products in the past, reviewing various offerings and comparing the competition. However, I’ve never written a summary post of what I think are the best financial products out there for Canadians.
Mind you, I realize that everyone has different needs, but for me, low cost and high value are the keys to my wallet.
Best Free Banking
PC Financial – For the basic free chequing account, this is the best offering in Canada. With no minimum balance, free cheques, free ATM withdrawals from PC and CIBC machines. I still have an account with them that I opened when they started their service.
Their closest competition is ING Thrive, here is my ING Thrive vs PC Financial post.
Best High End Banking
TD Select Service – After a review of high end chequing accounts a little while ago, I came to the conclusion that the TD Select Service account was the best bang for your buck. The regular fee is $24.95/month, but can be avoided if you keep a $5,000 balance throughout the month.
What do you get? Unlimited transactions, free cheques, no fees when withdrawing from non TD ATM’s (even outside Canada), free USD bank account with preferred currency exchange rates, safety deposit box, and the $120 fee waived for the TD Visa Infinite travel card. If you count the benefits of the infinite VISA, the TD Select Service includes a comprehensive insurance coverage like trip cancellation/interruption, car rental collision (CDW), baggage delay, purchase assurance and extended warranty. Or, if you were to choose the TD Gold Visa instead, it offers road side assistance for free along with 1% cash back.
Best Small Business Bank Account
After a review of small business bank accounts, it appeared that most small biz accounts had high fees and charges wherever they could fit them in. However, there are a couple that stand out from which I chose my own small business account. My favorite worked out to be BMO’s offering which offered no fees providing that the account maintains a balance of $4,000. There is a new small business banking product offered by HSBC that promises to have no fees, but the lack of teller and ATM access (around these parts) is a big minus for me.
Best Cash Back Credit Card
If you’ve been reading this blog for a while, you’ll likely know that my favorite credit card for the past couple of years has been the MBNA Smart Cash card. This is my “go to” credit card in my wallet for the bulk of my spending. Why do I like it so much? They have no annual fee, offer 3% cash back on gas/groceries, 1% on everything else (with no tiers), and all the essential credit card insurances. You can see my comparison of cash back cards here.
Best Rewards Credit Card
It’s tough to narrow down this category as there are numerous “types” of rewards out there such as travel, consumer loyalty points, roadside assistance, electronics, groceries etc. However, there are only a couple of cards that offer the most value. Most of the top contenders offer no fee, 1% return on your spending and a good selection of insurance.
For a free travel card, I prefer a rewards program that is able to be applied to multiple forms of travel. In this case, the Capital One Aspire Gold card offers 1% on your spending towards travel of your choice. The real competitive advantage of card is the included insurance package which is extremely generous for a free credit card. It features price protection, double theft/extended warranty insurance, baggage delay and car rental insurance.You can read how this card stacks up against other top rewards credit cards in Canada.
I don’t typically recommend fee based cards, but the Capital One World card is worth mentioning. The World card has all the benefits of the Gold card, but with 2% return on your spending and added insurance of trip delay/interruption/cancellation which can be expensive to purchase separately. Although this is a paid card, I would probably choose this one over the Gold card due to the residual bonus points every year which almost pays for the annual fee. Another perk is that they offer $350 worth of travel as a sign up bonus.
Best Low Cost Discount Brokerage for Buy and Hold
I mentioned Questrade in Rob Carricks “best deals for investors” article, as it provides a low cost discount broker solution for Canadians. Questrade offers trading accounts with no annual fee, no minimum balance, and $0.01/share trading ($4.95 min, $9.95 max), which is extremely competitive. Check out my Questrade review, but make sure to check out the comments as well. Some users have reported a few client service issues.
Otherwise, most of the big banks now offer low cost trading with larger balances. For example, TD Waterhouse is known to have a great platform, but expensive unless you have over a $50k balance at which point the trade cost reduces to $9.99. CIBC offers $6.95 trading for household assets above $100k.
Best Discount Brokerage for Traders
For frequent traders that need direct access to the market, Interactive Brokers provides low cost commissions. For high volume traders however, note that IB does not have a ceiling on their commissions per trade. The max commission is 0.05% of the trade value, but can add up if you are trading in high volumes.
However, if you’re the type to trade 100 or 200 shares at a time, trades will only be $1 or $2. See my Interactive Brokers Review for more details.
Best High Interest Savings Account
I have high interest savings accounts with PC Financial and ING Direct, and both offer satisfactory services, but they do not typically stand out in terms of interest rates. For a couple basis points, I do not typically switch banks as they are all pretty close. Currently the best rates are offered by EQ Bank.
Best Mutual Funds
In this case, when I say best, it means the lowest cost index mutual funds available. In Canada, there are very limited “low cost” mutual funds so the TD e-Series is in a league of their own. With MERS ranging from 0.31% to 0.48%, they are in the same price range as iShares index ETF’s, but with the advantage of purchasing in smaller increments without paying any commissions/fees.
Best Exchange Traded Funds
The past couple years has been good to ETF investors with a number of new products introduced to the market. However, I like to stick to the popular ETFs that have higher trading volumes and low fees. That leaves me with picks from Claymore, iShares and Vanguard. Here is a simple low cost ETF portfolio that includes my favorites.
Back to you, what are some of your favorite financial products?If you would like to read more articles like this, you can sign up for my free weekly money tips newsletter below (we will never spam you).