Tips and Tricks: How to handle regular banking with an online bank

I’ve been with online banks since I was 19 (like President’s Choice (PC) Financial or Tangerine in Canada).

I basically hate paying bank fees, don’t like leaving money as a balance in there just to waive the fees (sometimes I use more than I need and I don’t want to think about that) and have run the gamut in learning how to handle online banking.

1. HOW TO AVOID THE DREADED BOUNCED CHEQUE / NSF FEE

So I am an idiot.

I like to keep zero dollar balances in accounts and I move money all over the place to try and get the best interest rate.

In doing so, sometimes I totally, utterly EFF UP and end up putting in a transfer for MORE than what is available in my account and I get charged a NSF (insufficient funds) fee of $45.

The trick to avoid this is simply to EMAIL THE MONEY TO YOURSELF.

It only costs $1 and you can email however much you need to yourself and deposit it at your other bank account to avoid this fee. It’s instant, super fast, and $1 is way cheaper than $45 especially if you KNOW you don’t have enough and you can see the collision happening.

Example scenario:

$1000 in my PC Financial account

I ask Tangerine to debit $1500 from PC to move into Tangerine

OOPS! I realize I only have $1000 to debit because I had already moved $500 the day before and screwed up.

Enter: Email money transfer $500 to myself, and deposit it into PC

Wait for Tangerine to debit the money which is now $1500

Avoid: $45 NSF charge.

*dusts off hands*

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2. HOW TO GET A BANK DRAFT

When I bought my car, it was around $9000. I needed a bank draft / certified cheque or else I couldn’t buy the car, but what’s a girl to do when you have the cash sitting in your online bank account to buy said car, but you can’t get a bank draft from an online bank like Tangerine or PC?

Solution: You have an account at a standard bank like TD Bank, and you have a LINE OF CREDIT you can draw upon (who cares what the interest rate is), and use the money, then pay it off with a cheque from your online bank.

Example scenario:

I have to get a bank draft for $9000.

I go to TD Bank. I get a bank draft for $9000 from my line of credit and pay the $7.50 draft fee.

On the spot, I write a cheque to myself from PC Financial for the entire amount of $9007.50

I deposit that amount into my line of credit.

The debit cancels out the credit, and I end up with a balance of $0.

To icing on the cake is I didn’t pay a SINGLE CENT in interest for using the line of credit, because I paid it off THAT DAY. If I had paid it off the next day, I’d have been charged 8% annual interest on the $9000 (compounded daily).

3. HOW TO GET U.S. DOLLARS

Have a USD account with a standard bank like TD. This is what I do, and I deposit all my USD cheques in there that don’t come via Paypal, and I convert it to CAD or keep it in USD and transfer it to Questrade to buy stocks.

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Any other tips and tricks to share?