Motus has launched | Page 7 | motusbank | Discussion forum

Loonie said
Yes, the insurance may pay, but you know what it's like dealing with insurance companies. They may decide you were negligent. I'm no lawyer, but I don't consider insurance as giving me licence.
Life insurance is the one I understand best, as it's pretty clear whether you're alive or dead, not much wiggle room!

Something else to consider: Someone in some bureaucracy somewhere could decide that I must deplete my savings before qualifying for something-or-other, since I am in my 70s and may need something. wouldn't likely happen to me personally but could happen to someone.  

I think they'd ultimately have to pay, but you're right in the sense that you may have to pay out of your savings (and then you lose interest on those depleted savings, even if temporarily) until the insurance company pays out.

Insurance companies will always stall and delay until the last possible moment. It's probably written into their operating model and Code of Ethics. "All employees shall create needless bureaucratic obstacles and stall tactics for our policyholders, wherever and whenever possible," for example. It happened, two or three times, with my grandma and grandpa in Prince Albert. Once relating to their home which had some ice damming problems, so they had to dip into their RRIFs and non-registered savings to complete the home repairs (they also did some home renovations, which, obviously, wouldn't be reimbursed) until the insurance company, The Cooperators, paid out a couple years later. Similar story when they each, in separate summers in Arizona, The Cooperators decided to stall and delay on reimbursing them from their travel medical insurance claims. Took a year or two to ultimately be paid out. And, The Cooperators is one of those mutual insurance companies supposedly "owned" by its policyholders yet they sure make it tough on their "owners" (kinda like credit unions, so I do see your point about credit unions playing up the ownership aspect).

Cheers,
Doug

Briguy said

I haven't opened up a Motus account yet, but may consider it in the future. I just don't see why Loonie thinks it's safer from a probate point of view vs another online bank like Motive Financial, as everything is online or through the post office with Motus. ( I think someone on RFD mentioned they showed their identity at the post office when they first signed up ). There's no branch you can march into, and I don't think having an Ontario head office matters.  

Now that I think about it some more, I will have to say I respectfully disagree with Loonie on the probate thing. There could be an issue with provincially-regulated credit unions with no branch offices in other provinces, but think about it, if banks required western Canadian residents to probate their wills in multiple provinces but not Ontario or Quebec residents, don't you think we'd have heard about it by now? Sure, Motive Financial (part of Canadian Western Bank) is based in Edmonton, but they, through CWB, has branches from coast-to-coast.

Plus, I can say, categorically and emphatically, that HSBC Bank Canada, based in Vancouver, B.C., did not require a B.C. court to probate the Ontario client's will (client was based on Ontario). We even permitted the estate trustee, named by the Ontario court, to transact at our B.C. branch and forwarded copies of all vouchers to the Ontario branch for their estate file. Estate trustee, as you might've guessed, was B.C. based.

So, bottom line: if you're happy with Motive Financial and Meridian Credit Union, there really isn't any advantage to opening a Motus Bank account. You already have the Sweep feature with Meridian Credit Union, so that'd be about it (aside from the GIC rates, which are, admittedly, slightly higher than Motive).

Meridian is aggressively marketing Motus; they're spending a lot of money into making a go of it. I'd say, if you already have a Motive acount and love them, stick with them. Support the little guy (and they are the little guy, at least when you assess them individually, which you should do).

As for Canada Post ID validation, I sure as heck hope that Motus Bank just has that as an alternate ID validation method, like Simplii and Tangerine, when your credit bureau doesn't match up with the validation check or you don't have a cheque to deposit. I much prefer the cheque validation method!

Cheers,
Doug

Briguy said
^^^Totally agree with above
I think I'll stick with Hubert for RRSP and RRIF ( plus I have some Saskatchewan Pension Plan for eventual annuity ) .

Which annuity option do you like, and why? Have you looked into how much you'd receive, at age 65, under either option in comparison to taking your investment contributions + growth elsewhere and transferring it into a RRIF? It's really too bad the SPP didn't offer a RRIF directly. 🙁

I have my TFSA in Achieva plus a TFSA in Itrade but might eventually switch Achieva to Steinbach for the 2.85% rate they give to TFSA HISA.

Do you do any trading? You must have at least some equities or ETFs, no? I like Steinbach and the fact they don't need a separate virtual banking brand, but do wish their savings account paid monthly instead of annually.

Cash accounts- maybe I'll eventually be like Bill and have 35 accounts to shuffle my money around and just keep the bulk in 2 or 3 of them 🙂 Right now I have accounts in Scotiabank,Motive, Meridian ( good for GICs ), Access, Steinbach,Peoples Trust. I also have an account in Desjardins because I eventually want to get one of their credit cards and you get extra benefits if you have an account there.  

Cool! I'm kind of surprised Desjardins doesn't try and at least welcome virtual members from around the country into the Desjardins fold. Sure, they're winding down Zag Bank, but why not try and build out a digital customer base within Desjardins? 😉

I like all of those FIs. I don't bank with Motive or Steinbach, but they're small (in comparison to Meridian and the "Big 5") and scrappy. I like that.

35 accounts would be a bit excessive if you're like me and want to save copies of every bank e-Statement PDF. It's a lot to manage. Nothing saying you couldn't close some accounts, but make note of your membership number before you close them, and then re-open those memberships at some point.

Cheers,
Doug

Briguy said
I will take the Refund Life Annuity, since my wife is same age as me, and this one is the most flexible for getting your money's worth if you die early.

Receive the assurance of a death benefit to your beneficiary in the event you do not receive your account balance at retirement in pension payments. If you name your spouse as beneficiary of your account, CRA allows death benefits to be transferred, tax-deferred, directly to his/her SPP non-retired account or to an RRSP, RRIF or guaranteed Life Annuity. Tax-deferred transfer options are also available if the beneficiary is a financially dependent child or grandchild. You may change your beneficiary any time before your death.

Key thing with Steinbach is that with their HISA , you get interest on the lowest balance of the month, so you have to transfer money in on the first of the month, and take it out on the last day of the month to maximize your interest. Also, if you plan to transfer the TFSA to another FI, you have to transfer the TFSA to your Steinbach HISA on Dec.31, and then on Jan 1 or later pull the money out from another bank.

Only thing with having so many bank accounts is that most of them have a dormancy fee, so you have to make sure you do some small transaction once every year or every 2 years.  

Yeah, I looked into that Refund Life Annuity, but wondered if you'd bothered to contact the SPP administration team for a payment comparison based on your account value at age 65. It does seem to be the better of the two options. I just think...it's a pretty decent DC pension, they should not be so tied to the whole annuity game, and should offer a RRIF otherwise I can see a lot of people keeping their pension plan assets with SPP to their age 60-65 and then transferring out as a lump sum.

Thanks for clarifying that re: Steinbach's HISA - that's not so bad then. It's more or less like the discount brokerage HISAs whereby you have to make sure you don't withdraw from the HISA until after the last business day of the month so you get paid your interest for that month. Way back in the day, like the '80s or earlier, I think a lot of "Big 5" savings account used to be like this.

If you get a chance and like Steinbach for their service, feel free to +1 this thread. We've got the support of a couple people to add it to the comparison chart, but Peter's waiting for a bit more appetite and support before it gets added to the general HISA "comparison chart".

Personally, I do think we could add it, but just add those caveats to its "profile" page.

Cheers,
Doug

Briguy said

They charge a fee to transfer out your money to a prescribed RRIF (=locked in RRIF) or an annuity at another FI, not sure how much it is. I didn't ask them for annuity monthly payout rates to compare to RRIF rates somewhere else, since the whole reason I'm using Saskatchewan Pension is that they will be my annuity component of my retirement since they supposedly give an annuity with less fees going to sales people .  

I suspect the fee to transfer out to a RRIF, which I suspect may be able to be unlocked at a certain age, is not especially significant and likely ranges from a low of $25-150 on the absolute high end. In most cases, so long as your asset value is at least $15,000, you can get a self-directed discount brokerage or mutual fund dealer to rebate any fee charged to a maximum of $150.

Yeah, you're wanting an annuity and that's fine. I think the SPP is likely a good route to go, if you want an annuity, since there's no commissions paid to insurance sales representatives.

It's just...I understood that when interest rates are low like this, annuities are much, much more costly.

Cheers,
Doug

Briguy said

YOu are right about annuities being a bad deal right now since interest rates are so low, unless you live an extraordinarily long time. Hopefully the interest rates will be better when I ask for the annuity- maybe 10 years from now.  

Yeah, and you've always got that optionality to transfer out, too. Supposedly, I see in their newsletter that SPP is working on improving their back-end processes and technologies to offer a third option besides the two annuities that would essentially be like a RRIF of sorts, from the sounds of it.

I wouldn't hold my breath for interest rates to go up more than 2% in the next 10 years. They'll probably meander their way down again, about 1%, and then rise a couple percent (about 1% above where they are now) in the next 5-6 years. It all depends on economic and population growth and I just don't see it. I said in 2009, possibly on these forums, that Canada is destined to mimic Japan of the 1990s and 2000s for the next 10-20 years, and I don't think I was that far off. 😉

I was reading about another type of annuity whereby a company essentially maintains the investment risk of their pension plan but buys an annuity of sorts for the longevity risk. If the pensioner lives beyond age 85-86 or something, then the insurance company takes over the payments. Bell Canada Enterprises and another company, a smaller one I can't remember its name, did separate deals with an insurance company (Sun Life, I think). I wonder if those type of annuities are sold individually?

Edit: It's called a longevity insurance agreement/contract. Here's the press release between Bell Canada Enterprises and Sun Life, which is reinsuring a portion with Royal + Sun Alliance Group and SCOR Global Life.

Edit #2: That's it...the small company that did such a deal was Canadian Bank Note Company, Ltd., a privately-held concern which prints our money under contract for the Royal Canadian Mint and which also prints Canadian Tire paper money.

Cheers,
Doug

Loonie said

The key difference between you and i on this is your last clause. I DO think that having a head office in Ontario could matter, and don't want my folks to find out that it does the hard way. As I've said before, rules and laws can change between now and then.
Generally, they move in only one direction - to the more complicated. Those of you of a certain age will remember how easy it used to be to open a bank account... Now, the assumption is that you might be a terrorist or a money launderer. Well, I exaggerate, but you get the idea, I hope.

I think it's wise too to consider the abilities and so on of the people who are going to be acting for you. I don't want to annoy them by making it too difficult. They are likely to be perturbed at the number of different FIs they have to deal with as it is, never mind places in far-off lands that they've never heard of.  

Yeah, on that basis, I wouldn't want to be Bill's executor with, according to Briguy, his reported 35 active accounts and potentially having to deal with the Bank of Canada or provincial governments that hold unclaimed, small balances from accounts that went dormant and were transferred that. So, I think simplicity is best in terms of reducing the number of different FIs you deal with (not accounts) to one hand or less. I think there's some merit to the concern with provincial credit unions in a different province (though, apparently, that's a strategy at minimizing probate by holding assets in low probate fee provinces like Alberta and requesting to have your will probated separately in that province for those assets). However, if the bank or credit union is (a) federally-regulated and (b) has an office in your home province, I don't think there's an issue. You did see my attestation about HSBC Bank Canada not requiring a will be probated in a B.C. court, for an Ontario customer, despite HSBC having its head office in Vancouver, right?

Cheers,
Doug

Loonie said
I wouldn't have a problem with HSBC or any of the Big Banks or National etc., as I think I said. They have a substantial presence in Ontario and likely regional offices. ON the ohter hand, I wouldn't do business with them anyway! Those regional offices must be some expensive to run!

From what Bill has reported before, he figures there is so little in the accounts that he isn't actively using that they can easily be abandoned with no significant detrimental effect upon his death. I's not worth the effort to run around providing death certs to close them - or, probably, the cost. I think he has a good point.  

On what basis do you require "regional offices," though? To my mind, I don't think it makes a difference whether a branch or an "executive regional office" is maintained. Canadian Western Bank has a substantial presence on Ontario, so just wondering why they, and by extension, Motive Financial (their virtual bank branch) would seem to escape your methodology?

Cheers,
Doug

Loonie said
Honestly, I've never heard of Canadian Western Bank in Ontario., so I don't know what that substantial presence looks like and they might as well not exist here, if they do, which I doubt.  

In terms of bank branches, it looks like Canadian Western Bank has yet to move into Ontario, but their Maxium Financial subsidiary, which provides alternative mortgage and commercial lending, is headquartered in Richmond Hill, Ontario. As well, Canadian Western Bank has various equipment finance (CWB Equipment Finance and National Leasing), their mortgage broker division Optimum Mortgage, and various other subsidiaries with what I would call a substantial presence in Ontario. As well, their Canadian Western Trust and Valiant Trust (federally-regulated) subsidiaries have offices in Ontario.

Cheers,
Doug

On a historical note Loonie, I read a thread from 2017 about whether an Ontario power of attorney would be accepted at a Manitoba credit union since POAs are subject to provincial legislation. That could be an issue too if your spouse passed away, since your account would no longer be a joint account, and if you became incapacitated your POA might have to go through some hoops to release funds from your account. In that thread they mentioned that Hubert would require a note from your doctor saying you were incapacitated as well as the POA in order to release funds.
https://www.highinterestsavings.ca/forum/hubert-financial/hubert-power-of-attorney-not-accepted/

I'm of the same thought process with POA's that I was with an estate, that federally regulated banks that are out of province such as Motive would not have an issue with a POA from any province.