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Chequing Bank Accounts In Residency


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Thank you.  Would this apply to banks where I don't have my LOC too? 

 

well I cannot say for all banks - but most do have full time student no fee policies and residents are full time students. 

 

Personally I have used that fact to have no fees at TD, even though my LOC is not there. I had some stuff with TD prior to the LOC - and I didn't like their LOC at the time. It is expense to move though so I just keep things there as long as it is free. 

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well I cannot say for all banks - but most do have full time student no fee policies and residents are full time students. 

 

Personally I have used that fact to have no fees at TD, even though my LOC is not there. I had some stuff with TD prior to the LOC - and I didn't like their LOC at the time. It is expense to move though so I just keep things there as long as it is free. 

Thanks !

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Slightly off-topic (but not entirely), but I hope the perspective of somebody who "made it through to the other side" is useful from time to time.

 

Before I started practicing, I arranged a meeting with the bank that held my LOC to say "hey, I'm almost done training and have a job lined up. Let's talk about next steps".  The first thing my banker did when we met, and I mean the very first thing, was say "ok, since you're not a student any more we'll need to put a service charge on your chequing account". 

 

Me: "I beg your pardon?"

Her: "It's not that much, only $15 a month"

Me: "That's over $150 a year.  If you think it's not that much, you should pay for it."

 

The conversation went downhill from there...

 

 

So I did something that was recommended at a CMA/MD Management seminar that I'd gone to.  I arranged a meeting with every one of the big banks in the place where I was going to be practicing.  I sent them a bunch of background information in advance, as well as an outline of what my short, medium and long-term goals are, and said I wanted to meet with them to see how they could help me.

 

The results were very interesting and enlightening.  Two of the banks were completely useless (including a different rep from same bank that had cheesed me off earlier, who seemed to take it for granted that my business wouldn't move from his institution. Their corporate culture needs some readjustment...).  One of them was lukewarm, and two of them clearly "got it" and wanted to win my business.  The bank that won out was one I already had a business relationship with, but by the number of times the two bankers and bank manager I met with said "we're going to waive that, no charge for you for that, here's how we can help you with that..." etc it was clear that they wanted to keep me.   I don't feel particularly warm and fuzzy towards them, but they were the best deal of the bunch.

 

So moral(s) of the story:

 

- everything is negotiable.  Banks will waive fees if you ask.

- as a medical student, resident, fellow, or staff, you're one of the best customers a bank will have and they want your business.

- the CMA/MD Management one-day seminar on setting up your practice and general financial stuff is useful.  It will likely be offered to you by your PGME office in the spring of your final year of residency.  Highly recommended.

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(as much as I do bash MD financial on their mutual funds and various fees, I don't want to come across like they are useless - in fact they have a lot of useful information with a key case in point above. They are very helpful in a variety ways. Take advantage of those opportunities - just avoid the pitfalls :)

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(as much as I do bash MD financial on their mutual funds and various fees, I don't want to come across like they are useless - in fact they have a lot of useful information with a key case in point above. They are very helpful in a variety ways. Take advantage of those opportunities - just avoid the pitfalls :)

 

Agreed.  They have a perspective on the needs of physicians and trainees that a generic "you need to buy an rrsp" financial advisor doesn't have.

 

Their high-level financial advice is solid.  Where they fall down is when it comes down to details like "you should invest in our mutual fund"...

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They do that a lot lol! Invest in our mutual funds to see what kind of financial risks you want to take in the future, and how it turns out!

While as med student, I have to pay my debts first!!! :P

Agreed.  They have a perspective on the needs of physicians and trainees that a generic "you need to buy an rrsp" financial advisor doesn't have.

 

Their high-level financial advice is solid.  Where they fall down is when it comes down to details like "you should invest in our mutual fund"...

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Kind of makes me think I should go to RBC and try to argue for prime minus.

 

So here's your script:

 

Don't go to RBC first.  Go to Scotia first (they're the ones offering prime minus, correct?).  Make an appointment with one of their med/dent bankers.  Be completely open and up-front about the reason the appointment: "I am in my second year of a five year residency.  Although I am banking with one of your competitors, I have heard from my friends that you are offering attractive rates and terms, including an interest rate on medical lines of credit that is below prime.  I am interested to know what you can offer me now, what the terms will be over the final years of my residency, and how you can help me when I am setting up my practice as a psychiatrist.  How difficult would it be to move my business over to your bank?" 

 

Let them make their pitch.  Take notes when they are talking, and ask for clarification if they start talking-really-fast-and-waving-their-hands.  The default answer to any high-pressure sales pitch from them is "Changing banks will be very disruptive for me, so I will need to think about what you are offering and if it fits with my overall goals."

 

Then talk to RBC.   Tell them "Scotia Bank offered me [blahblahblah].   I did not expect to be in this situation, but I am thinking about taking my business elsewhere.  I was happy with my relationship with RBC until I talked to Scotia, and changing where I do my banking will certainly be a pain in the neck for me.  But I feel like I'm not getting the best deal right now.  How can you help me?"

 

Then pick the deal that makes the most sense for you and your circumstances.

 

This might take 12-15 hours of your life by the time you back-and-forth with the bankers. It won't be settled on the first go-round.  But if you do the math on $$/hr, it's more profitable than watching Netflix and eating ice cream out of the tub on a post-call day.  And the absolute worst-case outcome will be that you have the same financial terms and conditions that you have now.

 

 

 

Edit:  Oh, and an addendum that should be intuitively obvious.  There is threatening to leave, and then there is threatening to leave.  There is a big difference between "I'm thinking about taking my business elsewhere, how can you help me?" and "I have no choice but to close my accounts here and start dealing with your competitor because you and your colleagues are all a bunch of thieves and idiots".  

 

Both statements have their place, but your banker should be able to parse out whether your unspoken message is "just lookin' for a good deal here" vs "take no prisoners, kill the women and children first".   If in the course of your back-and-forth with your bankers you find yourself ready to invoke the nuclear option, be darn sure you're comfortable backing it up and following through.

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They do that a lot lol! Invest in our mutual funds to see what kind of financial risks you want to take in the future, and how it turns out!

While as med student, I have to pay my debts first!!! :P

 

even once you pay those off - you STILL shouldn't buy their mutual funds ha :) 

 

but seriously they do know practice setup, insurance needs, wealth transfer, tax management etc. 

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Slightly off-topic (but not entirely), but I hope the perspective of somebody who "made it through to the other side" is useful from time to time.

 

Before I started practicing, I arranged a meeting with the bank that held my LOC to say "hey, I'm almost done training and have a job lined up. Let's talk about next steps".  The first thing my banker did when we met, and I mean the very first thing, was say "ok, since you're not a student any more we'll need to put a service charge on your chequing account". 

 

Me: "I beg your pardon?"

Her: "It's not that much, only $15 a month"

Me: "That's over $150 a year.  If you think it's not that much, you should pay for it."

 

The conversation went downhill from there...

 

 

So I did something that was recommended at a CMA/MD Management seminar that I'd gone to.  I arranged a meeting with every one of the big banks in the place where I was going to be practicing.  I sent them a bunch of background information in advance, as well as an outline of what my short, medium and long-term goals are, and said I wanted to meet with them to see how they could help me.

 

The results were very interesting and enlightening.  Two of the banks were completely useless (including a different rep from same bank that had cheesed me off earlier, who seemed to take it for granted that my business wouldn't move from his institution. Their corporate culture needs some readjustment...).  One of them was lukewarm, and two of them clearly "got it" and wanted to win my business.  The bank that won out was one I already had a business relationship with, but by the number of times the two bankers and bank manager I met with said "we're going to waive that, no charge for you for that, here's how we can help you with that..." etc it was clear that they wanted to keep me.   I don't feel particularly warm and fuzzy towards them, but they were the best deal of the bunch.

 

So moral(s) of the story:

 

- everything is negotiable.  Banks will waive fees if you ask.

- as a medical student, resident, fellow, or staff, you're one of the best customers a bank will have and they want your business.

- the CMA/MD Management one-day seminar on setting up your practice and general financial stuff is useful.  It will likely be offered to you by your PGME office in the spring of your final year of residency.  Highly recommended.

 

Thanks for the advice! 

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even once you pay those off - you STILL shouldn't buy their mutual funds ha :)

 

but seriously they do know practice setup, insurance needs, wealth transfer, tax management etc. 

 

Exactly....I advise people to take advantage of the MD Financial free personal financial advisor. THey have great, commission free advise and are very friendly. I just told my advisor right away that I do all my own investing at a discount brokerage myself and that is not going tom change, specially not for some expensive high MER mutual funds. He was totally understanding that and it has made no impact on our advisor-advisee relationship. 

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Exactly....I advise people to take advantage of the MD Financial free personal financial advisor. THey have great, commission free advise and are very friendly. I just told my advisor right away that I do all my own investing at a discount brokerage myself and that is not going tom change, specially not for some expensive high MER mutual funds. He was totally understanding that and it has made no impact on our advisor-advisee relationship. 

 

It will be interesting if everyone actually followed our advice - they probably will have to start being not free and charge a reasonable rate for services - and that fee would be one that I would strong consider paying despite whatever research I have done on my own. 

 

This is a long term problem the financial industry is going to have - they for good reason hate index funds etc as they lose out big time. They are catching more and more on as time progresses. Still that isn't your problem - your problem is avoiding paying insanely high fees for no reason (1.5-2.0% <- mutual funds vs 0.05-0.25% <- index funds. I happen to be at 0.05% which is roughly 30 to 40 times lower than MD financial.)

 

I actually had bankers complain to me about that cost difference and how the switch will effectively destroy parts of their industry. I get that but to quote Dr. Cox:

 

So, what you’re saying is that you have a problem that is totally your problem, but you’d like to find a way to make that problem my problem. But here’s the problem, Newbie: it’s not my problem.

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It will be interesting if everyone actually followed our advice - they probably will have to start being not free and charge a reasonable rate for services - and that fee would be one that I would strong consider paying despite whatever research I have done on my own. 

 

This is a long term problem the financial industry is going to have - they for good reason hate index funds etc as they lose out big time. They are catching more and more on as time progresses. Still that isn't your problem - your problem is avoiding paying insanely high fees for no reason (1.5-2.0% <- mutual funds vs 0.05-0.25% <- index funds. I happen to be at 0.05% which is roughly 30 to 40 times lower than MD financial.)

 

I actually had bankers complain to me about that cost difference and how the switch will effectively destroy parts of their industry. I get that but to quote Dr. Cox:

 

So, what you’re saying is that you have a problem that is totally your problem, but you’d like to find a way to make that problem my problem. But here’s the problem, Newbie: it’s not my problem.

 

 

Haha, yup, perfect quote in this situation. If the trend continues, the industry will indeed need to have a major shift in how they make money. 

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