Financial Technology Companies are shaking up the banking industry – especially for Millennials and entrepreneurs. Managing your money smartly can help you build up your savings – despite the expenses that can occur in the form of fees and charges from banks and other financial institutions. These charges usually go unnoticed but they drain your account balance.
To help you save smartly without giving up any of the services you’re receiving, here are few tips and alternatives:
- No Fee Chequing Account: All the major banks have a monthly fee to a chequing account accompanying them; even if you go with lowest account type you still get dinged at least $4/month. If this is something that turns you off, maybe it’s time to switch to Tangerine or PC Financial chequing accounts – as both of these are free. These online-based banks can also help you save in fees in other banking needs and not only chequing accounts.
- Robo Investing: The average portfolio management fees in Canada are 2.5% of your investment, meaning you pay 2.5% of your investment to your Financial Advisor or Portfolio Manager just to manage your money, with no guarantee of how your portfolio performs. This has changed with Fintech companies like Wealthsimple, who only charges 0.5% in management fees. That is a lot of savings for marginally the same outcome.
- Online Financing: Since the financial crisis, North Americans no longer consider loans under $250,000 profitable; this means higher fees and interest charges and a greater need for collateral security to get financing. Toronto based Fintech Company, FundThrough solves this lending problem by connecting perspective borrowers to investors, promising lower interest rates.
- Smart Spending: Vancouver’s Koho brings in several smart financial services – such as an account that lets you deposit money and track what you are spending in real time, by transaction as well as by categories; it also lets you create and track savings budgets for buying big-ticket items.
Beginning to wonder how these companies can afford to be giving you services for dirt cheap prices compared to traditional financial institutions? It’s because they are eliminating unnecessary costs and then passing the benefits to us. There is no hidden asterisk or any such term or conditions – it’s time we stop paying unnecessary fee charges and increase our savings.