If you’re up for a bribe, it’s a great time to open a chequing account with one of the big banks.

Royal Bank of Canada will give you an iPad that appears to have a retail value of more than $400 if you open one of two types of chequing accounts. Toronto-Dominion Bank and Bank of Montreal are offering $300 cash, while Bank of Nova Scotia is putting up 10,000 Scene points or Scotia Rewards points.

Canadian Imperial Bank of Commerce’s deal is worth up to $179.40 – that’s how much you’d save if you qualified to have fees on the CIBC Smart Account waived for a year. Fees on this account max out at $14.95 a month.

Some insight behind these offers can be found in a recent report from the consulting firm McVay and Associates that discusses the importance of “primary customers” who consider their bank or credit union to be their main financial provider. The report says these people typically comprise 20 per cent of customers, yet contribute 70 per cent or more of total personal deposit, loan and investment balances.

Chequing accounts are the foundation of a relationship with a bank, and it’s not usual for banks to run promotions to attract new sign-ups. But the offers available today are a cut above in both quantity and quality.

Bank shareholders, you have to wonder if this is a sign that growth in retail banking is slowing, and whether alternative online banks are finally starting to be a factor. Customers, you should be asking yourself whether these offers are just banks fronting you money they will later claw back through:

  • High service fees.
  • High mutual funds fees.
  • Deposit rates on the low side.
  • Borrowing rates on the high side.

Do not be so naive as to think you get free cash or swag from a big bank just by opening any random chequing account. The accounts tied to these offers are either unlimited accounts, with all common types of transactions covered by a set monthly fee, or premium accounts with extra features and much higher costs. You’ll also need to establish the kind of banking routine that makes it difficult to move to yet another bank after collecting your presents.

RBC’s iPad offer requires you to sign up for RBC Signature No Limit Banking (monthly fee of $15.95) or RBC VIP Banking (monthly fee of $30), by Sept. 3. You then have until Nov. 29 to do two of the following – add your payroll as a direct deposit, add two preauthorized monthly payments or add two bill payments to a service provider. Instructions on how to order your iPad will be mailed to you shortly after you qualify, RBC says. If you’re interested, that’s a 9.7-inch, 32GB iPad WiFi in silver, gold or space grey. Best Buy Canada’s website lists this iPad at $429.99.

BMO’s offer of $300, with an additional bonus interest rate on savings, requires you to open a Performance Plan (monthly fee of $15.95) or Premium Plan (monthly fee of $30) online and make a deposit by Oct. 31. You then have until Dec. 31 to set up recurring direct deposits (such as your paycheque) and do some online bill payments.

Don’t make any spending plans for your $300 just yet. “If you meet the eligibility criteria, cash bonus will be credited to your chequing account by Jan. 31, 2020,” the BMO website says.

These bonuses suggest the banks need to stir things up in the retail banking side of their business. It was hard enough for BMO or CIBC to lure away an RBC, Scotiabank or TD client. Now, there’s a growing competition from credit unions and a cohort of online alternative banks offering no-cost chequing accounts along with savings accounts that pay at least a semi-decent level of interest in today’s low-rate world.

If you’re tempted to jump to a bank offering cash, points or electronics, give these alternative banks a look. Some names to research – Alterna Bank, Motive Financial, Motus Bank, Simplii Financial and Tangerine. Manulife Bank’s new All-in Banking Package is free if you add $100 a month to a linked savings account. Also consult your local credit unions for no-fee chequing options.

A no-fee chequing account would earn you $300 in savings in 20 months if you previously had a $15-a-month chequing account. And the savings continue on from there. You could say that no-fee chequing accounts are a gift that keeps on giving, unlike cash or points. That iPad is tempting, though.

The Globe and Mail, August 8, 2019