All of the major financial institutions in Canada have now launched some type of "online" banking services. This article explores what each bank is offering in their "package" of services, how much it will cost you, and the advantages and limitations of each service.
There is one major difference between the type of virtual banking being offered amongst the major banks and trust companies. This difference requires you to make a decision on how you want to conduct your online business, and it lies in the type of "online" access you wish to use. Except for the Bank of Nova Scotia who offer only Internet access, all banks are providing access via a private, dial-up network operated by the bank. A private dial-up network means a direct modem-to-modem link between your computer and the bank's computer. This is generally known as "PC Banking". With your computer and modem, you will dial the bank's private network and conduct your business on that computer system only. Most of the banks also offer the same variety of services via their public access Internet web site. You connect to the Internet, type the URL (the address) into your browser, login, and perform your banking transactions. Their is usually a higher monthly fee (if any) to access the private dial-up network compared to access via the Internet. This is mostly due to the maintenance of the private networks and the cost of direct long-distance telephone connections that the banks are required to have.
Over time, you will see the private dial-up networks become less common as the internet, with its cheaper connection costs, becomes more popular.
Security remains a key issue when performing any virtual banking, hence the use of private dial-up networks. Some people will never feel comfortable sending information in the public domain of the Internet. However, there have been great strides in developing new, sophisticated encryption procedures that will scramble the stream of information eminating from your computer. This does not make any system 100% foolproof, but it does mean that anyone with thoughts of trying to eavesdrop on your banking would need such extensive computer power to break the encryption coding that the likelihood of anyone succeeding is virtually none.
In addition to encryption, systems of account numbers and passwords are in place on all networks as a first line of defence against tampering.
Not all banks are offering access to all services normally transacted at a branch or automated teller. Generally, though, viewing detailed transactions, paying bills and making transfers between accounts are a minimum. Some banks though, provide purchases of GIC's and access to your RRSP accounts as part of their virtual package.
Besides the differing services, and the fees involved, there are two other points to consider when choosing between PC Banking and Internet banking. First, is your phone line. For those without a dedicated modem line in their home or office, using Internet banking means tying up your phone line for the entire time you are examining your accounts. Generally, with PC Banking, you tell the software what you want to accomplish first, then you connect to the system, and in a matter of a few minutes, you have executed your transactions.
The advantage of Internet banking however, is that you do not need to be sitting at your personal computer to use it. Any computer with Internet access will do.
Now if someone will just pickup our bank deposits and hand deliver our cash to us.....
Services
Royal Direct PC Banking gives access to personal and business accounts and operates over a private dial-up network. Bill paying, typical banking transactions, automatic statement reconciliation, planning and general investment advice. Includes PC Action, Royal's discount brokerage software. Internet banking is also available.
Current Limitations
No direct link for brokerage transactions. Cannot buy GIC's, RRSP's or mutual funds. Cannot view RRSP accounts.
Advantages
Royal Direct PC Banking comes with "Managing Your Money", a financial software package.
Costs
maximum $4.95 a month for personal accounts, currently no activation fee, first three months are free.
$8.50 a month for business accounts, bill payments are 0.69 each over the Internet, and 0.69 for each "batch" of bills paid via PC Banking.
Services
TD Access:PCgives access to personal and business accounts and operates over a private dial-up network. Bill paying and typical banking transactions as well as discount brokerage transactions are available.
Current Limitations
No Internet banking service as yet. Cannot buy GIC's, RRSP's. Cannot view RRSP accounts.
Advantages
Access to all accounts is provided in one package. Green Line discount brokerage customers can obtain quotes and enter orders for stocks and funds.
Costs
$3.00 a month for personal accounts.
$10.00 a month for business accounts.
Free with $1,000 minimum balance.
Services
Gives access to personal and business accounts for all typical banking transactions through the Internet. This service is provided via the Bank of Montreal's "mbanx" online service. You must be registered for the Bank's telephone banking service to use the Net Banking.
Current Limitations
Investments cannot be made. Cannot view RRSP accounts. No access to BMO's Investorline discount brokerage service. Personal financial manager software not available yet.
Advantages
Can reorder cheques online. Access to Mastercard and personal line of credit, including cash advances.
Costs
$3.00 a month for personal accounts.
Services
Gives access to personal and business accounts for all typical banking transactions through either a private dial-up network or the Internet.
Current Limitations
Investments cannot be made. Cannot view RRSP accounts. mbanx is not connected to BMO's Investorline discount brokerage service.
Advantages
Only bank to offer software for the Macintosh.
Costs
$13.00 a month for personal accounts, offset by rewards.
$10.00 a month for business accounts.
Services
CIBC PC Banking gives access to personal and business accounts for all typical banking transactions either through a private dial-up network or via the Internet. Also included is the Investor's Edge discount brokerage service for conducting brokerage transactions.
Current Limitations
No investments can be made outside a brokerage account. Cannot view RRSP accounts.
Advantages
Access to all accounts is provided in one package. Integration with Microsoft Money 97 is planned. Access to CIBC Travel Medical Insurance.
Costs
Free!
Services
Scotia OnLine gives access to personal accounts through the Internet only, for all typical banking transactions.
Current Limitations
Services not available for business accounts. Cannot view RRSP accounts.
Advantages
Online banking services integrated with on-line discount brokerage services. Service offered in English, French and Chinese.
Costs
Free!
Services
CTConnect gives access to personal and business accounts through a private dial-up network. EasyWeb service gives access to personal and business accounts through the Internet. Both services provide all typical banking transactions.
Current Limitations
No connection to CT's EasyLine brokerage service. No investments can be made. Personal and business accounts need separate codes.
Advantages
You can view your RRSP porfolio on-screen. EasyWeb has a connection to Canada Trust's web site which will give current information on mortage and other product rates.
Costs
EasyWeb is Free!
CTConnect is free for the first three month, then $7.95 a month.
Services
Personal CompuTeller gives access to personal accounts through a private dial-up network. Self Starter and ClickFinance provides access to business accounts through a private dial-up network. Both services provide all typical banking transactions.
Current Limitations
Internet service not available. No investments can be made. Personal and business accounts need separate codes. Cannot view your RRSP accounts. Services are only available from 6am to midnight, Monday through Saturday, 9am to midnight Sundays.
Advantages
The ClickFinance software allows small businesses to sort account data and reconcile cheques.
Costs
Starter Software is free. ClickFinance is $50.
Personal CompuTeller is free for the first three months, then $4.00 a month.
Self Starter is $6.95 a month.
ClickFinance is $18.00 a month.
Services
Citizens PC gives access to personal accounts through a private dial-up network. All typical banking transactions are provided.
Current Limitations
Internet service not available. Business bank accounts are not available at this institution.
Advantages
Citizens PC software includes being able to view transactions for up to six months, and a search feature. Access to investment accounts is available, including purchasing RRSP's.
Costs
$8.00 per month flat fee covers all services. With a Minimum $1,000 balance, the service is free.
So which bank should you choose? Or, should you switch to another bank for better service. We believe that over the next year, all banks will offer pretty much the same services as each scrambles to keep up with its competition. Eventually, they will all offer the same services and prices so it is probably not worth your while to switch banks.
The big difference however, lies in how all the services are packaged together. Look at the value of the extras, and their complexity, then decide.
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