Senior Bank Accounts
If you’ve ever visited a financial institution’s website, you’ve likely noticed that most offer unique products targeted at different types of customers. There are youth bank accounts, student bank accounts and a long list of business products. For the roughly 21% of Canadians aged 65 and older1 (though still young at heart!), many banks also offer a list of senior products. If you’re part of this demographic, here’s everything you need to know about senior bank accounts in Canada.
What are senior bank accounts?
Senior bank accounts are bank accounts only open to Canadians of a certain age – typically 65 years or older. With their presumed lower incomes, seniors get discounts when buying transit tickets, shopping at certain stores and going to the movies, so it makes sense that banks would be similarly inclined when it comes to serving this age group.
What are the advantages of using a senior bank account?
Once you get past the realization that, yes, you do indeed qualify for a senior account now, it’s time to look on the bright side: being 65 and over does have its advantages. Financial institutions in Canada reward seniors in a few different ways. Senior bank accounts include some or all of the following features:
- No fee chequing accounts, or discounts on the monthly fee(s)
- Unlimited transactions
- Free personal cheques
- Account plan available to spouse, even if they are below the qualifying age
- Discounts on the annual rental fee of a safety deposit box
- Commission-free travellers cheques
Full senior banking packages
Many of the features mentioned above will vary, depending on which senior bank account you choose. However, some banks offer full banking packages to seniors that encompass more than one bank account. To use the example of CIBC, their Advantage 65 Plus Account is a bundle of three accounts: their Everyday Chequing Account, Premium Growth Savings Account, and a U.S. Dollar Account as well.
If you are considering getting a full banking package, be sure to understand the terms and fees associated with each account in the package. And remember: if you don’t need all of the accounts that come with the package, you might be better off choosing one senior bank account instead.
Getting a senior bank account isn’t always automatic
Don’t assume that just because you’ve turned 65, your financial institution will move you over to their senior bank account; it’s often something you have to ask for. If you bank with BMO or RBC, once you turn 65, you will be automatically given a senior’s discount on your current bank account. However, for other banks, like CIBC and TD, you must apply in order to be moved to senior bank account.
How to choose the best senior bank account for you
There isn’t a one-size-fits-all answer to which financial institution is right for you. Before you open a senior bank account, ask yourself two main questions:
- Does the account meet my specific banking needs? The senior bank account must include the minimum number of transactions you need, and you should feel comfortable paying the monthly fee.
- Is the financial institution accessible for me? The best senior bank account at a bank that isn’t accessible isn’t ideal, particularly if you are elderly and have mobility issues. Conversely, a convenient ATM at a bank with a costly senior bank account is also not a great choice. The trick is to match your banking needs with your accessibility requirements, and make a decision based on these two factors.
Why seniors should also consider high-interest savings accounts
Banks offer accounts designed specifically for savings to children and young Canadians. By the time they are students, however, the product offerings are much less geared towards saving and more towards transactional accounts (debit purchases, ATM withdrawals, etc.).
Senior bank accounts are also geared towards transactional (or chequing) accounts. While some senior banking packages do have a savings account component, the overall package tends not to focus on earning interest as the prime motivation for the account holder.
If you are a senior looking to earn more interest than in a typical senior bank account, your best bet is to open a high-interest savings account that is available to depositors of all ages. This does not preclude you from also opening a seniors account for your chequing/transaction needs, but it does provide much more interest than you will receive in a senior bank account.
References and Notes
- Statistics Canada – Population by Age Group http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/demo10a-eng.htm