Dumping a chartered bank for a credit union

Earlier in the year, I received an email message from my bank stating that I had a “secure” message to read. This was unusual because they usually only contacted me by snail mail. I was suspicious, so I logged into my account to look at this “secure” message. Sneaky TD bank had decided that my fees were going up substantially, and they were giving me just under 60 days before the change took place. No wonder they didn’t bother sending me a letter! Amazingly, their email didn’t end up in my spam folder.

I called TD and had an extremely frustrating conversation with a branch manager. You see, I signed up with Canada Trust when I was 16 years old and had a great relationship with the bank for many years. After TD bought them though, service had been declining, slowly at first, but then with a rapid acceleration in their contempt for their customers.

Even though I’ve had an account with TD for over 30 years, they were completely inflexible in their policy change. I used to be able to have unlimited transactions for free with Canada Trust, then I was required to have a minimum balance of $1000 with TD Canada Trust, and then it was a minimum balance of $2000. As of June 1, they wanted me to have a minimum balance of $5000!

How ridiculous. Who would have the money to keep such a large balance, and then if they had that much money, why would they leave it in a chequing account? Not likely.

If I did nothing and slipped below $5000 even once during the month, I’d be dinged $30 for that month PLUS $2 for all my debits (outgoing transactions). Ha! Not going to happen.

Thankfully I had a ready-made solution to jump to. I had set up a joint chequing account with First Calgary years ago, but only used it for e-transfers and minor internet purchases. However, this credit union was a pleasure to deal with, and they had great perks. Here are a few: free transactions (no minimum balance required), free cheques, three free e-transfers per month, and most importantly, a friendly staff in-person at the branch or over the phone.

I was nervous about switching due to pre-authorized payments set up with TD, and a bit of inertia, given that I’d been with TD for so long. I’m pleased to say that the entire process of switching went smoothly, and I should have done the switch years earlier. You only need a month to safely ensure that all pre-authorized payments and incoming money is processed correctly, and then you can cancel your old account. I hope more people switch away from the big chartered banks. They are a pain to deal with and their arrogance is breathtaking.

I realize that over time, I had dramatically switched business away from TD including auto & home insurance, all investments, credit cards, and now chequing accounts. I knew things were headed in the wrong direction when my financial advisor told me he was thinking of leaving the company. When I asked why he stated that the CEO was pressuring all advisors to only sell TD products regardless of their performance on the market. In addition, they were pushing a “robo-advisor” model so that advisors could handle many more clients and aggressively push TD products. This way, the bank’s profit margin would increase, and they could employ less-educated advisors because a computer algorithm would do the majority of the financial “planning”. I really appreciated my advisor’s honesty, and I’m happy to say that I followed him to his new company and retained him as my financial advisor.

While I don’t usually wish for a company to be punished, in TD’s case, I’ll make an exception. They are a despicable company to deal with, and I’d smile with relief when they lose a significant number of clients. It would be icing on the cake if the CEO was stripped of his job unceremoniously, but that’s probably too much to hope for. In any case, Canadians should look at credit unions to get far better value for money from their banking provider.

Update: I came across an interesting article about TD’s lack of record-keeping and abysmal communication. I pray that the client in the story that sued, gets the compensation he is seeking.