Paytm: Rewarding you for paying your bills

What is Paytm?

Bills are a fact of life.  Whether it’s credit card bills, rent, taxes, tuition, utilities.  Life costs money, and we have to pay this bills. Paytm is a cellphone-based free bill payment platform.  Through Paytm, you can make all (or almost all) your bill payments from one place.  You can set up alerts, reminders, and notifications to help you avoid any late fees.

Paytm Home Screen

How much does it cost to use?

There are no sign-up fees and no transaction fees of any kind.  And there is no fine print! Paytm costs you absolutely nothing to use.

How does it work?

You need to add both your billers and your payment methods.  Paytm advertises as having more than 5000 billers, and you can use your bank account or credit cards to pay these bills. You can also use Paytm to send money to friends and family. This isn’t a unique function though, and essentially replicated what you can do with PayPal or Interac email money transfers.

There are two different types of account balances on Paytm that can create value for you. Paytm Cash is essentially a cash reward balance that you can use towards bill payments or towards gift card purchases. Paytm Points is a second rewards system. You accumulate 1 Paytm Point for every dollar of bills that you’ve paid through Paytm. You can then redeem the Paytm Points to boost your Paytm Cash back rebates on gift card purchases.

Continue reading Paytm: Rewarding you for paying your bills

Tangerine Review

Disclaimer: I’m a Tangerine banking client, but I am not being compensated by Tangerine for writing this review.

What do you get with Tangerine?

Everything that you need for your everyday banking needs and more. There are only a couple physical Tangerine “branches” in Canada (2 “cafés” in Toronto and one each in Vancouver, Montreal and Calgary). You would think that such a limited number of physical locations would limit Tangerine’s ability to serve their client’s banking needs, but it doesn’t. Tangerine is my primary bank and I’ve never been to a physical Tangerine location! Tangerine has saved countless dollars on the costs of building and maintaining brick-and-mortar branches, and pass on those savings to you. Tangerine offers everyday banking services without any monthly account fees. There are unlimited transactions and no minimum balances. Most major banks will charge you between $10-16 a month or require that you maintain a minimum balance in your chequing account for unlimited debit transactions, but this is free with Tangerine.

It’s close to free banking but not completely free. For example, Interac e-Transfers cost your $1 each. Tangerine charges you $40 if your account has Non-Sufficient Funds, and there is an Overdraft fee of $5.

You also get great savings rates on your deposits. Even Tangerine’s chequing accounts have noticeable and quantifiable interest rates that rival some of the interests on big bank savings accounts! Up to $50,000, Tangerine offers 0.15%, increases it up to 0.55% on every dollar from $50,000 to a $100.000 and tops out at 0.65% on every additional dollar. The standard rate on savings account deposits is 1.1%, and is significantly higher than any savings account interest rates of the big banks. Periodically, Tangerine will offer short-term promotional interest rates on new deposits into your savings accounts.  You can maximize these promotional rates by moving your savings account deposits to your chequing account at the end of a promo period, so that you’re entire balance is eligible for the higher promotional interest rate. It does make a difference, as my most recent promotional interest rate bumped me up to 2.4%.

You also get worry-free banking. Tangerine is owned by Scotiabank so there is very little risk of Tangerine failing. And even if it were to fail, you won’t lose your money because up to $100,000 of your deposits are covered by CDIC.

If you intend to have accounts at more than one bank, Tangerine offers you the ability to “link” the accounts together. This gives you the ability to not only transfer money between your different accounts at Tangerine, but also between your accounts at Tangerine and accounts at other banks (for free as well).

You get MoreBang4YourBuck with Tangerine. You have minimal if not no practically no fees to bank plus you yield far more in interest than what you can get from a big bank.

What drew me to Tangerine?

I was tired of paying monthly account fees and earning negligible interest on my deposits. Once I discovered what Tangerine offers their clients, it didn’t take much for me to open up an account with Tangerine and make it my primary every day bank account.

My experience:

From what I’ve seen, Tangerine is quite aggressive in its pursuit of new clients and retention of existing clients.  I mentioned earlier the recurring promotional interest rate boosting the yield on savings accounts from 1.1% to 2.4%. I’ve also benefitted from a referral bonus, where existing Tangerine clients and new clients they have referred both receive a bonus worth $50. The third bonus I received was a welcome bonus from Tangerine worth $100, for setting up a direct deposit. Tangerine had one more bonus for new clients that had increasing rewards for the amount new clients contributed to their investment funds.  I didn’t qualify for this bonus because I manage my investment account using Questrade.

I have been really pleased with my experience with Tangerine so far.  It seems like Tangerine has done the little things well. Tangerine seems to have compensated for the absence of physical branches, by making it a easy for their clients to be able to contact them by phone or chat. I’ve only needed to contact Tangerine a couple times, but it was really easy to set up an instant messaging chat, and the wait times to talk on the phone have been all but immediate for me. You can also contact Tangerine 24 hours a day, 7 days a week. No complaints there.

Mobile Cheque Deposit Screen

Tangerine has also created a cheque deposit system that I feel quite secure with. First off, their app is quite easy to use. After declaring the cheque balance, you take a picture of the frontside and backside of a cheque. The app can also tell you if your pictures aren’t correct (i.e. you’ve taken two pictures of the front instead of one of the front and one of the back). Within a minute, you will get an email confirmation that the cheque has been received. The email lists the cheque total, the account it will be deposited into, the date you submitted the pictures and the cheque number and asks you to keep the cheque safe until Tangerine has had an opportunity to process and clear the cheque. Then, a couple days later, you will get another email with the same information (cheque balance, account it is destined for, submission date and cheque number), along with the instruction to destroy the cheque (preferably with a shredder). I’ve found the process to be really convenient. It is so fast to use – it’s way quicker than the amount of time it takes to get to a bank and have a teller deposit your cheques the old-fashioned way. – and the email system makes my quite comfortable that it is secure.

There are a couple features that to Tangerine that I have not used yet: the Tangerine MasterCard and the Tangerine Investment Funds. The MasterCard seems to be an excellent option for people looking for a no-fee cash back credit card, giving you 2% cash back on your choice of three categories. You can choose between Groceries, Furniture, Restaurants, Hotel/Motel, Gas, Recurring Payments, Drugstore, Home improvement, Entertainment, and Public Transportation and Parking. If you’re having trouble deciding on your categories, Tangerine will suggest the best options for you to pick based off of your spending habits. The ability to pick your 2% categories (with 0.5% cash back on the rest) allows you to personalize the rewards to match the categories you spend the most on, or, makes it a good secondary credit card giving you 2% cash back on the categories you don’t get on your primary credit card.

Tangerine also offers good (though not great) investment options with their Investment Funds, which you can hold in an RRSP, TFSA or non-registered account. The investment funds are index-based mutual funds that are perfect for the investors that are looking for an easy-to-use automatic investing solution. Investors can set up preauthorized contributions to the fund they pick and Tangerine does the rest. Tangerine has 5 different funds (Balanced Income Portfolio, Balanced Portfolio, Balanced Growth Portfolio, Dividend Portfolio, and Equity Growth Portfolio) that are varied to match a range of risk tolerances and asset allocations. They range from 100% equity and no fixed income in the “Dividend Portfolio” and “Equity Growth Portfolio” to 30% equity and 70% bonds in the “Balanced Income Portfolio.” All five of these funds have an MER of 1.07%, which is quite reasonable in comparison with the typical MERs that are higher than 2% on conventional actively-managed mutual funds. I mentioned that the Tangerine funds are good but not great, because the fees are a little higher than comparable options on the market, such as WealthSimple.

There are two things that I think would really add to Tangerine. The first thing that I would like to see, is for Tangerine to offer RESP accounts. As Tangerine is one of the few banks that do not offer Interac email eTransfers for free, that would be the only other thing that I would like to see from Tangerine.

I have not been with Tangerine for years yet, it’s only been a matter of months. That being said, I’m quite happy having made the switch and wish that I had moved my banking to Tangerine sooner. But, seeing as it’s been recent, I will write a follow-up on this review after I’ve been a client for a year.

The Case for Internet Banks

Disclaimer: I’m currently a Tangerine client but I am not being compensated by Tangerine for writing this.

What does it cost you to be a client of one of the big 5 banks? What are the potential savings of banking with an internet bank?

If you bank with one of the big 5 banks (TD, Scotiabank, RBC, BMO, or CIBC), odds are you’re paying either monthly account fees between $11-16, or, you’re maintaining a minimum balance of a couple thousand dollars to have that monthly fee waived.

With the developments of internet banking and smartphone banking apps the last 5-10 years especially, it is now possible to do all of your banking without ever needing the assistance of a teller or going into the bank. Today, the only find I find myself going to the bank is if I need cash, and even then, I find myself using a bank machine instead of a teller. I am able to regularly check my account balance, transfer money, pay my bills all from my computer or phone. In the last couple years, if not the last year, mobile banking apps have added and refined a cheque deposit feature integrated with phone cameras that is, in my opinion, now functional (My recollection is that my big bank app had the mobile cheque deposit feature but that there were enough bugs in the system that I had to fight with it to the point that it was no longer convenient.  The mobile cheque deposit function seems to work great now.) With a banking app, you can deposit cheques by taking pictures of the front and back of the cheque.

With internet banking and mobile banking apps, physical brick-and-mortar branches are no longer necessary the way they were even 5 years ago, and internet banks have become a much more viable option for everyday banking. Tangerine and Simplii are the two digital banking options out there for Canadians right now that this post is focused on. Continue reading The Case for Internet Banks

Investing Quick Reference Guide

This post is an introduction to some of the concepts and terms of investment that will appear on this website and throughout financial literature.

Investing is to use the money you have now, to create more money in the future.  You can invest by loaning money to someone using bonds, GICs, or savings accounts.  You can also purchase stocks or shares of a company for a share in their profits, or real estate for the income that it can generate.

Interest is the money that you would receive in exchange for lending someone or a bank your money.  Interest on deposits in savings accounts are usually paid once a month.  Interest is paid on GICs is periodical as well (it can be anywhere from monthly, to quarterly, to annually or at maturity).  You can also receive interest payments for lending your money to a company or government with a bond.

Dividends are payments that a company gives to its shareholders, sharing company profits with its investors.  Though every company is different, typically companies will pay out dividends once per quarter.

Capital Gains are realized when an investor sells shares for more than they had originally paid for them.  The opposite, when an investor sells shares for less than their initial investment, is called a capital loss.  Share prices tend to increase when there is a corresponding growth in the companies profits, and conversely, a reduction in profitability will often lead to a drop in share prices.  While interest and dividends can provide regular cash flow for your portfolio, portfolio growth through capital gains is unrealized (you won’t receive an increase or decrease in the cash balance of your account) until you close your position by selling your shares. Continue reading Investing Quick Reference Guide

Review: The RESP Book

The RESP Book: The Simple Guide to Registered Education Savings Plans for Canadians – Mike Holman

For parents wanting to save for their children’s education, there may be no better option than the Registered Education Savings Plan.  I’ve found that there is a TON of information on the internet about RESPs, but I’ve found very little of it to be useful.  The CRA’s website has the rules, but tells you little about how it would work for you.  And the rest that I’ve found on the internet are from financial institutions that are trying to sell you on their RESP products.  Naturally, I’m wary of these.

Who is this book for?

If you are looking for a guide on the RESP, with explanations that are simple enough for ordinary Canadians to understand, this is the book.  If you’re looking for unbiased information on RESP from someone who is not trying to sell you a product, this is the book.

Mike Holman filled-in all the gaps for me in my research.  He describes how the program works, the best way to use it and things to be careful of.  On specific strength of the book, is the number of ‘what-if’ scenarios that Holam presents.  I found that he did an effective job of presenting enough scenarios that every Canadian should be able to pick up the book and figure out how to best make the RESP work for them and their child.  Holman does a good job of explaining all the intricacies of the RESP.

The RESP Book: The Simple Guide to Registered Education Savings Plans for Canadians.  The title says it all.  It’s a book about RESPs.  Mike Holman has made the RESP program simple.  And, it’s a really effective guide.  

For parents (or really any family members) thinking about saving for their children’s education, The RESP Book is an excellent investment.


Review: Millionaire Teacher

Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School – Andrew Hallam

Andrew Hallam’s Millionaire Teacher, is my favorite personal finance book, period.  It is an entertaining read – I read the entire book the first time over a weekend (Who knew a finance book could be entertaining?).  Millionaire Teacher is informative.  Hallam even makes the world of investment seem simple!

Who is this book for?

If you’re a Canadian and you’ll only read one book about investing, this is the book.  If you are feeling like the world of investing is intimidating, and aren’t sure where to start, this is the book.  If you have money to invest and you’re not sure how to invest it, this is the book.  If you’re looking at an index investing approach, and are trying to wrap your mind around it, this is the book.  If you are feeling like you don’t have enough money to spare to think about saving or investing, this is the book (you can get the kindle version for $12).

Andrew Hallam shares his story, telling you how he managed to accumulate a million-dollar portfolio before the age of 40, on a modest school teacher’s salary.  Hallam demonstrates the value of maximizing savings and describes how he did it.  He explores the impact of investing early, the effect high-fee mutual funds can have on your investment returns and the benefits of using index funds as an alternative.  One aspect I really enjoyed, was his take on how an investor should think or react to large profits or losses in their portfolio.

This is the book I wish I had read, when I first started investing.  If I had found this book before I purchased my first mutual funds, even if I had gotten the worst deal on the book and it had cost me $100, it would still have been the best investment I could have made.