What is the best bank account for a Canadian to have on a round-the-world trip?

| July 1, 2009 | 25 Comments
moneyglobe What is the best bank account for a Canadian to have on a round the world trip?

What is the best bank account for Canadian travellers?

Update (August 6, 2009) Bad news for Canadian independent travelers—Citizens Bank has just announced it is exiting the retail banking business. Citizens Bank announced today that it will be leaving the personal banking space. Citizen’s CEO Jason Farris, said that the company is converting to a non-deposit taking bank. In a message to members, Mr Farris relayed that Citizens, “in a national, online market, (was) unable to achieve the necessary size and scale to succeed.” For more information, check out our post: “Canadians Bid Goodbye to Truly Global Chequing Account“. Thanks to Neil Carey (of 2wanderers.ca) for bringing this news to our attention.

While there is a lot of healthy competition south of the border, with many US players offering global chequing accounts with attractive fees and features, Citizens Bankis pretty much the only Canadian game in town if you want a truly global no-fee chequing account.

Citizens Bank is an online national bank formed by Vancity, and it is the first Canadian bank to offer a no-fee, easy to use account with no ATM fees worldwide (it’s called the ‘Citizens Bank Global Chequing account’). At other banks, you might be required to pay as much as C$5 per transaction when you use your ATM card outside the country. With a Citizens Bank Global Chequing Account, however, that fee is zero. Well almost.

Is the fee truly zero? Well, yes and no. In order to avoid a bank surcharge in Canada, look for ATMs that are part of the EXCHANGE or ACCULINK networks (check out this page for an online locator). Out of the country, if you use the EXCHANGE ATM locator you’ll find over one million ATMs worldwide that you can access with your Citizens Bank ATM card for free (for an online locator for ATMs in the US, click here; for the rest of the world, click here).

Keep in mind, however, that Citizens Bank is on the Visa/PLUS interbank network (global ATM locator here). In some of the countries that you may visit, ATMs might only accept banks that are part of the MasterCard/Cirrus interbank network (MasterCard Global ATM locator here).

A further caveat—for any given debit card transaction, there are two other possible places where you can get hit for foreign exchange fees. Those are:

  • By the merchant/ATM-owner
  • By whoever calculates the actual exchange rate underlying everything

So, while Citizens Bank will reduce the hit on your wallet, you are still likely to incur transaction fees and currency exchange fees. Compared with the big banks, Citizens Bank’s exchange rate is likely not as advantageous (ie comparing the Citizens Bank Global Chequing account to the prevailing market rate to determine the exchange fee). This is offset, however, by the fact that they are not ‘double dipping’ into your transaction at the ATM—provided you are using an EXCHANGE ATM.

There were rumours that Citizens Bank was charging a much higher exchange rate to compensate for their ‘free’ global ATM withdrawals. However, these turned out to be only rumours. A representative from Citizens Bank explained it thusly:

Please note that Citizens Bank currently only manage rates on the ATM withdrawals for USD, EUR and GBP. For all other currencies, we are at the mercy of the ATM service provider and the rate they use. We do not aim to make a return on these transactions, merely to cover our costs. We’ve decided to go one step further and not only offer no-fee day-to-day chequing but also not charge ATM withdrawal fees worldwide. It was never our intention to recoup the loss fee income through exchange rates.

From what I’ve experienced, however, you’re likely to still come out ahead with Citizens Bank. This account offers all the benefits of a regular chequing account, but with none of the extra charges.

Some additional features:

  • no monthly fees or minimum balances
  • no fees for debit card purchases in Canada or US
  • no fees for direct deposits, account transfers, balance inquiries, bill
  • payments and pre-authorized payments
  • no fees for cheque books or cheque images that have cleared your account

Everything for free? While I insist that there is no free lunch in life, it appears that Citizens is offering a fairly costly product for free at large? Does this sound too good to be true? Well, it should. But, with no shareholders and no branch network to support, Citizens Bank has built a model that allows them to provide these services for free.

Great value is a good way for a smaller bank to attract customers. And as Citizens is essentially an online-only bank, in order to win over new customers, the benefit to the customer has to be clear.

The trump card for me, however, is that Citizens Bank also has a clear ethical policy. And to that end, they appeal to me even more. For example, they are carbon neutral. They offer term deposits for micro-credit lending in developing countries. They give back a percentage of their profits to organizations nominated and voted upon by their customers.

To those wondering whether Citizens is safe, they are registered under the CDIC (Canada Deposit Insurance Corporation). Hence, your chequing/savings account is insured in the event of bankruptcy up to $100,000.00.

While there is significant lead time before we leave on our round-the-world trip, I have opened a Citizens Bank Global Chequing Account. Why not? It’s free!

For more information, check out their website here. BootsnAll has a discussion on the go over here.

Handy links:

Related Posts

Tags: , ,

Category: Articles

About the Author ()

For nearly ten years now, Daniel of Two Go Round-The-World has explored how travel captures our imagination and engages our deepest emotions. One half of the duo that maintains the widely read Two Go Round-The-World blog, Daniel treats his subjects not only as works of art but also as symbols of the cultural and political forces that inspire them. Check him out on Google+.

Comments (25)

Trackback URL | Comments RSS Feed

  1. David Hawke says:

    Just a note on citizens bank; they refused to open an account for me as my address was at “mail boxes” a perfectly legal address that I use income tax, drivers license & passport.

    • Daniel says:

      I’ve heard that complaint before, David. It’s ridiculous. If I recall they cite an anti-terrorism money laundering law passed a few years ago as the reason for it. What alternatives have you considered? I’m going to continue my reasearch, so if I come across anything compelling, I will let you know.

  2. My recommendation is TD Canada Trust. This is what we are using in our RTW trip. If you have the Select Account, they don’t change anything for international withdrawls (given that you maintain a minimum balance).

  3. Dave and Deb says:

    We have always used TD ourselves. It has turned out well for us in even the most remote destinations. But good to know of other banks too. Thanks for the info.

  4. Scott says:

    We opened up a citizens bank account in May of this year for our RTW trip and so far have been very happy with them. Good service at the branch, no problems overseas and good exchange rate. I recommend them!

    • Daniel says:

      Ah, you must be from out on the left coast! Wish we had branches in Southern Ontario! But, am a fan of the bank, too, regardless!

  5. Neil says:

    Sadly, the Global Chequing account is no more, as Citizen’s bank is getting out of the retail banking business. Those of us who already have one have until December to move our banking elsewhere, and those of you who don’t will be unable to open one.

    Currently researching other options…

    • Daniel says:

      Thanks, Neil, for the heads up on this news—I just updated the post with the information that you pointed us toward and blogged about it. Will be looking at other options, too. Please let us know if you come across anything. We’ll try to put together a post as soon as possible!

  6. Francois says:

    I’m really disappointed with the handling of Citizens Bank of Canada closure. A few months ago I had lot of assets with TD bank than I move all these to Citizens Bank because they better match my values. I mean mostly because they are a credit union bank and they give more back to the community to improve both my and everybody quality of life and they’re more open to members feedback. Now Citizens Bank & Vancity are saying they move all my Citizens Bank assets to TD. That’s not going to happen. Over my dead body ;) I’m now shopping for another credit union bank in Vancouver area. Any suggestions for another credit union bank that would match my values?

  7. Molly says:

    Is there any other financial institution offering a ‘global account’like Citizens Bank had?

  8. twowander says:

    Any more news on low fee international banking for us Canucks?

    Best i have found is RCB @ 3$ a transaction
    PC bank looks promising on the outside but the site is very vague on details.

  9. holeyboot says:

    The difference between HSBC and Vancity for CDN to SGD (Singaporean dollars) is about 4%, which would be a difference of $20 on every $500.

    Of course, if I was in Singapore, Vancity wouldn’t be managing the rate for the ATM, and Singapore’s banks seem to be very international, but suppose I did find a small, regional bank in Singapore. Or a small, regional bank in Malaysia, or anywhere outside the USD/GBP/EUR countries. Perhaps the rate disadvantage would be the same or worse?

    twowander: Vancity charges $3 as well.

  10. Most major banks in Canada have a plan of ~$24.95 a month and you don’t pay the fees associated with taking $$$ out overseas.

    Flip side is, if you go to the machine less and take more you can get under that sum. Flip side again is if you get robbed you’d wish you had less on you…

  11. Neil says:

    Quick update on my further research for good options. I ended up opening a bank with my local credit union (Servus), which charges $4/month + $2.50 for international withdrawals. This wasn’t the best deal I could find, but I went with them because I know they won’t put me through the same forced change again. I did, however, find another free option, for those who are interested.

    ICICI Bank of Canada is the Canadian subsidiary of a Mumbai-based mega-bank. They offer online services similar to what Citizens Bank had, including a chequing account with a $5 monthly fee and free unlimited transactions anywhere in the world. The monthly fee is waived with minimum balance ($500), or by having at least one paycheque direct deposited each month.

    Their target market is clearly Indian immigrants who transfer money home, or visit home occasionally, but the service should be beneficial for travelers as well.

  12. Online classes many times offer electronic certificates, which can be relayed online as soon as you submit the results of your driving test.
    When you have decided the location and fully done you work on the distance and point out
    the exact place of the location for long distance you need to call the long distance movers
    company. Several times people don’t want to shift their
    entire stuffs at once and need storage services to preserve their goods for
    some limited time period.

    My website: Miami movers quotes

  13. Adriana says:

    If you’re educated (or seeking an education) you will probably find a ton of opportunity in a small
    town. Platforms: Android, Blackberry, i – Phone, i – Pad, Windows
    Phone. Selling the same things, to the same market, in the same way.

  14. Banner ads typically include graphics and text which entice Internet users to click on the advertisement.
    If, on the other hand, you are not successful in paying your loans back,
    you are going to develop “bad credit. What you give away doesn’t have to be costly, but it must be valuable.

  15. If you’re educated (or seeking an education) you will probably find a ton of
    opportunity in a small town. You can know all the
    ins and outs of business and can run a restaurant without fail; but would you know the first thing about installing the kitchen grills.
    Typically, this works well if we are involved in a solid networking and we reciprocate,
    by referring clients to those other businesses.

  16. backstreet says:

    Or, perhaps you’re one of those students who desires a challenge, or
    even a good addition to your résumé for Grad school. Further,
    amount of loan must be need-based, subject to ceiling of Rs 25,000 per borrower for purchase of machinery or equipment etc,
    and meeting working capital requirement of one operating cycle.

    Two: Increase in income – When you are able to increase
    your traffic to the business, you will easily be
    able to also increase your income.

  17. Islamorada tarpon fishing involves the fishing of an prehistoric
    rare fish tarpon through the scientific name Magalops Atlanticus which is a prehistoric
    fish considered to be one in every of the diverse &
    interesting creatures across the country which can be present in both side of Atlantic also referred to as as the tarpum tarpon or else the
    silver king due to it’s majestic appearance & colour which
    Players doing solo or non-healing players benefit most from this profession as they can replenish
    themselves with food.

    My web-site – deck ideas for a two story house

  18. retrica pc says:

    First of all the adjustment brushes. Through its innovative graphical user interface and instant random
    effect button, Repligator makes the layer containing the rectangles we created in the button below.
    You can see this palette, click on the background so convert it to your images to
    get overwhelmed by your choices! Then we’re going to add. The event was a lot of fun to see what you can add the fishing line was tied to the Layers

  19. Aw, this was an exceptionally nice post. Taking a few minutes
    and actual effort to create a superb article…
    but what can I say… I put things off a lot and never manage
    to get nearly anything done.

  20. I absolutely love your blog and find many of
    your post’s to be what precisely I’m looking for. Does one offer guest writers to write
    content available for you? I wouldn’t mind creating a post or elaborating
    on most of the subjects you write related to here. Again, awesome web log!

  21. hi!,I love your writing very so much! percentage we keep up a correspondence extra about your article on AOL?
    I need a specialist in this space to resolve my problem.
    May be that’s you! Looking forward to see you.

Leave a Reply