Simplii Financial Review — 2020 Edition

It’s a time when everything’s online. Shopping, education, entertainment — you name it! The answers to most questions don’t need to be looked for further than your next Google search. Well, the banking sector is not one to be left behind, with online banking becoming one of the buzz phrases of the decade. 24/7 banking, crazy savings and substantial income on financial products — who wouldn’t want this? Gone are the days of long queues at the cash counter of your bank or the intimidating customer service that tends to judge your banking knowledge. Banks have embraced the online world, and how!

One of the key reasons for online banking’s popularity spurt is that these banks often offer “no-fee” chequing accounts and higher rates of interest on savings accounts than traditional banks. The lack of brick-and-mortar offices greatly reduces their cost of operations, enabling them to provide these high-interest rates. Additionally, these banks are accessible through any online medium, be it your laptop, smartphone or tablet, with a customer service that’s available 24/7 and a debit card that works like other normal debit cards do.

Though many banks decided to quit the old traditional system of banking and move online, Simplii is one of the latest to join the bandwagon, joining the ranks of Motive Financial, EQ Bank and Tangerine, to name a few. This new kid on the financial block isn’t actually new; it’s the rebranded version of the Canadian Imperial Bank of Commerce (CIBC) and Loblaw’s 20-year-old banking collaboration, President’s Choice Financial. This joint venture came to an end in 2017, resulting in CIBC taking the reins of the online bank completely (what eventually became Simplii Financial) and Loblaw bid adieu to everything except their PC Mastercard and PC Optimum (formerly PC Plus) loyalty program.

In today’s Simplii Financial review, we’ll give you a good look at the story behind Simplii, what the financial brand offers to customers and why you should or shouldn’t establish a banking relationship with them. Let’s get on with it, shall we?

First, a Little Bit about Online Banking!

Online banking is the management of bank accounts over an online, wireless medium, such as your computer at home or even your smartphone. It involves performing traditional banking actions such as depositing cheques, withdrawing cash, paying bills and transferring funds all over mobile applications or bank websites. Online banking revolutionized the banking industry, increasing the reach of banks and the accessibility of banking services around the world. Now, anyone in any remote corner of the world with an internet connection could access banking services (provided the bank of their choice is serviceable in their location). There are many pros to online banking:

  • Lower fees and higher interest rates due to the money saved on branch maintenance.
  • Super convenient and accessible 24/7 from anywhere.

  • Free access to ATMs.
  • Secure transactions due to measures such as encryption, fraud monitoring and Canadian Deposit Insurance Corporation (CDIC) insurance being in place
  • The speed of transactions is unparalleled and cannot be achieved with traditional banking.
  • The simplicity of online banking transactions is absent in traditional banking transactions as your information is stored in the device’s memory or records. Things can be achieved with the click of a button, as opposed to filling out long forms and waiting in line to get the job done.
  • Efficient and effective as all the information about your bank account is one easy-to-access platform/interface
  • Many banks provide tools and widgets to help you keep track of your funds and spending such as expenditure trackers, investment analyzers and fund management services.

However, not everything’s rosy. Online banking does it have its cons, such as:

  • Lack of personal assistance.
  • Limited options on chequing accounts.
  • Difficulty in cash deposit — you may have to use the ATM to deposit money, use a money order, or put money into a traditional bank account and have that transferred to your online account.
  • Online banking presents the challenge of a continuous learning curve as banks may continually update their websites and apps. Technology is one of the fastest things to grow obsolete, which means updating is a necessity and requirement, not an option. This can present challenges to those who find it hard to use technology, especially senior citizens who have grown comfortable with traditional banking.

  • Some banks have sites that are hard to navigate and user interfaces that are not too user-friendly.
  • The risk of identity theft and fraud due to which it can be hard to trust online banks

A Little Bit about Simplii

Simplii has its origins in the 1996 joint venture between CIBC and supermarket chain Loblaw Companies, when both giants decided to get together and provide low-fee banking services to the good people of Canada, very much the need of the hour given Canada’s expensive financial products market. This joint venture, under the brand name of President’s Choice, operated out of various Loblaw branches, without the establishment of physical branches. Customers were allowed to use CIBC and Loblaw services free of cost.

The financial co-venture ended on November 1st, 2017, and as mentioned earlier, Simplii Financial arose as the end of this 20-year partnership between CIBC and the Loblaw Companies. The break-up was as amicable as Jen An and Justin Theroux’s, with CIBC rebranding and offering Simplii Financial as their direct banking brand and Loblaw retaining control over the PC Mastercard and loyalty program. All of the 2 million accounts under the PC brand, along with investments, mortgages, and loans, became the property of Simplii, with the same account numbers and terms being retained.

After a few glitches in the system in the initial days (including getting hacked, a bug in the mobile banking app and widespread customer confusion), Simplii rose as the proverbial phoenix from the ashes of President’s Choice, going on to be named in Forbes’ list of the World’s Best Banks in 2019 and also achieving the position of the third-best bank in Canada.

What Simplii Financial Offers to Customers

Simplii offers a range of financial products that have become highly successful and popular among the citizens of Canada. Broadly speaking, the bank offers the following products and services to its customers:

Let’s take a detailed look at each of these product lines.

The No-Fee Chequing Account

Jumping aboard the online banking bandwagon and leaving behind traditional banking must require good reason and the no-fee chequing account is one of the obvious ones. Simplii offers the following features on its no-fee accounts:

  • No requirement of a minimum balance amount
  • Personalized cheques free of cost
  • An interest rate ranging between 0.05-0.50% on the balance amount in your chequing account
  • Unlimited and free of cost withdrawals and bill payments
  • Unlimited and free of cost debit transactions using the Simplii debit card
  • Unlimited and free of cost access to over 3,400 ATMs belong to CIBC, in Canada

If you’re already impressed by this, you have every reason to be. Most banks charge a fortune in fees for every imaginable and unimaginable reason; given that scenario, so many free-of-cost options are a definite relief. No more worrisome moments calculating fees and transaction charges!

The High-Interest Savings Account

Most banks offer really low-interest rates when it comes to savings accounts, generally in the 0.50-0.90% range. If you think that this rate doesn’t sound that bad (probably because this is the standard rate and anything higher is rare to come by), consider the fact that Simplii offers 1.15-1.25% interest on its savings accounts. Though this is the standard rate, the bank even offers promotional rates for new accounts (such as 3.15% during the first quarter of 2019) that are valid for a few months post-account-opening. Along with the automatic savings plan, no need for monthly fees and no need for a minimum balance, Simplii’s high-interest savings accounts are advantageous like few other bank accounts can be.

The Simplii Financial Cash-Back Visa Credit Card

Considering that Loblaw took control over the PC Mastercard (eventually updating it to a no-fee PC Financial World Elite Mastercard), Simplii needed to introduce a new credit card scheme of its own. Cue entry to the Simplii Financial Cash-Back Visa card. Apart from the fact that you don’t have to pay an annual fee for the card, it comes with a whole range of other perks such as an insane amount of cash-back rewards on purchases (at select bars, cafes and restaurants), a 10% welcome offer (for the first $500 spent on dining) and decent cash-back offers on other purchases as well. Here’s a comprehensive list of the benefits of this card:

  • No annual fee (for the primary cardholder as well as 3 other cards)
  • 4% cash-back on $5000 spent annually at selects cafes, bars, and restaurants
  • An offer of 10% cash-back on the first $500 you spend on dining out (post-which it reverts the original 4% rate)
  • 1.5% cash-back on gas, groceries, purchases at pharmacies or drugstores and certain pre-authorized purchases (for up to $15,000 per annum)
  • 0.5% cash-back on all other purchases
  • A standard purchase interest rate of 19.99%
  • The option of adding the CIBC “Payment Protector Insurance” and “Emergency Travel Medical Insurance
  • Comes with Extended Protection Insurance and Purchase Security included

Highly similar to Tangerine’s credit card offering, this credit card still holds its own in a competitive market and for good reason. However, you require a minimum household income of $15,000 to be eligible for the card; considering that some cards require as much as $80,000 in individual income and $150,000 as household income, this amount shouldn’t be giving you any new worry lines.

Financial Mortgages

As mentioned earlier, Simplii offers both variable and fixed-rate mortgages. They offer some pretty competitive rates on these mortgages and if you’re transferring your mortgage from another bank, they guarantee your rate and cover your appraisal fee for 120 days.

Additionally, the bank provides tools and material on its website to help customers decide the right mortgage for them, such as home affordability and mortgage prepayment calculators. You can contact their customer care to get a mortgage rate that’s pre-approved.

Financial Loans

The bank provides a range of low-cost loan options to its customers, such as an all-purpose personal loan and the secured line of credit and personal line of credit:

  • Personal Line of Credit: With this option, customers can access funds with repayment options that are quite low-priced each month. Customers also get to enjoy unlimited Interac debit transactions free of cost, as well as unlimited and free withdrawals, cheques and bill payments.
  • Secured Line of Credit: Simplii’s secured line of credit allows customers to borrow the amount that they need, but pay interest only on what they have used. Repayment options are highly flexible and like the personal line of credit, customers can enjoy free and unlimited Interac debit transactions, cheques, withdrawals and bill payments. Bear in mind that the secured line of credit requires you to pay $150 as a one-time setup fee
  • Personal Loan: Customers can prepay some of the borrowed loan amount or all of it without the fear of any penalty.

Simplii provides some pretty competitive rates on all these borrowing options.

Global Money Transfer and Foreign Cash Service

Simplii lets you transfer money to 60 countries on planet Earth in as short a while as 1-3 business days and for minimal transfer fees. Customers can send up to $30,000 in a period of 24 hours. You can also use their foreign cash services if you need foreign currencies in their cash form. The bank offers the options of home delivery of said currency as well as picking it up from the closest Canada Post Office branch. You can pick between 65 currencies and receive cash up to $2,500 in a period of 24 hours.

Financial Instruments

As mentioned earlier, Simplii provides financial instruments for investment, such as Tax-Free Savings Accounts (TFSA), Guaranteed Investment Certificates (GIC), Registered Retirement Income Fund (RRIF), Registered Education Savings Plan (RESP) and Registered Retirement Savings Plan (RRSP).

Simplii offers customers the option of 7 different index mutual funds that they can invest in online, whether they hold registered or non-registered investment accounts. These funds cater to a range of risk tolerances and investment objectives (conservative income, income plus, income, balanced, balanced growth, aggressive growth, and growth) and are available through CIBC Securities. Customers get a 10-basis-point discount on their fund management fees (MER) and can start their investment journey with as little as $25 a month.

With regard to GICs, Simplii offers different rates and maturities, generally better than traditional banks. These risk-free instruments need a minimum investment of $100, with the GIC being protected by the Canada Deposit Insurance Corporation (CDIC) up to $100,000.

How Much Does Simplii Charge?

Though Simplii does offer no-fee chequing accounts and high-interest savings accounts, they are a financial venture and income generation is a necessity. Therefore, Simplii charges the following fees:

  • $7.50 on bank drafts and money orders
  • $45 as Non-Sufficient Funds (NSF) fees
  • $3.50 to stop Interac e-Transfers
  • A minimum of $4.97 as overdraft fees
  • Anywhere between $10-16.50 to stop payments
  • 2.5% for conversion of foreign currencies
  • $20 per annum for account inactivity
  • $1.50 for withdrawal from non-CIBC ATMs within Canada
  • $3 or higher for withdrawal from non-CIBC ATMs outside Canada
  • $50 per transfer of RRSP or TFSA accounts

Why You Should Choose Simplii Financial

Apart from the fortune that customers can save on their banking transactions, Simplii is also super convenient to use. You can send and receive funds through Interac free of cost, all without having to get out of your pajamas and the four walls of your comfy home. Cheques can be deposited, ATMs accessed and customer care contacted all from your smartphone. This also means easy monitoring and tracking of funds.

Additionally, Simplii provides security to customers, with all its funds being CDIC-protected up to $100,000, as CIBC is a member of the insurance organization. Lastly, the bank provides several promotional offers to new customers, such as a higher interest rate on savings accounts for the first few months, $200 cash on signing up and additional perks and benefits for accounts transferred from other banks or institutes.

The Cons of Using Simplii

Though Simplii presents a world of convenience due to its online mode of operations, there are some things that an online bank cannot offer that a traditional brick-and-mortar bank can offer, which is why many banks still choose to retain the latter form. Some of the downsides to using Simplii (or any online bank, actually) are:

Lack of Face-to-Face Interactions

While Simplii was still PC Financial, the company used Loblaw stores to set up stalls where they could interact with customers and offer help on any issues. Since the rebranding in 2017, these stalls have disappeared.

If you’ve ever been a fan of Michael Scott on The Office, you probably know the immortal relevance of good customer care and its importance. In an increasingly automated world, there are still customers who feel a certain sense of security and reassurance when talking directly to financial representatives of the institute. Additionally, for those who aren’t exactly the most tech-savvy on the planet, it may be easier to clear doubts and have their issues addressed through face-to-face interactions. For the company itself, face-to-face interactions could help establish trust in relationships with customers as well as increase their customer base and loyalty. After all, it isn’t for nothing that Jim Rohn said that “one customer well taken care of could be more valuable than $10,000 worth of advertising”.

Daily Limits and Cash Deposits

Since Simplii is more or less completely automated, that means depositing money through ATMs. This can be a hassle if there are no CIBC ATMs close to you both in terms of effort as well as expenses, as using a non-CIBC ATM results in a transaction fee. Additionally, there are limits on withdrawing cash from ATMs that are much higher when you withdraw from a traditional bank.

The Final Verdict

There’s no doubt about the fact that online banking has made the whole process of banking a whole lot easier. Banks like Simplii Financial are growing in popularity with each passing day and it’s honestly easy to see why! In a world where speed is of utmost importance and convenience is a defining factor in most decisions, online banking is the perfect solution. Additionally, when you throw in the interest rates and great products, it’s not a hard call to make at all!

Simplii justifies the recognition it has received with its diverse product offerings and competitive interest rates on all its financial products. Switching to Simplii is a no brainer because there’s so much the bank has to offer, including a super approachable customer care service that won’t let you miss the face-to-face interactions that come with traditional banking. Apart from the easy monitoring and tracking, you can also spend worry-free days without having to bother about how much of your funds are being spent on fees; instead, save up and splurge on a nice vacation!

So there you have it — a complete review of Simplii Financial, with all that the bank has to offer, as well as why you should or shouldn’t consider it. However, from a totally unbiased viewpoint, Simplii manages to hold its ground rather firmly and impressively. Even if you should change your mind halfway and decide to withdraw all your funds from the online bank, you won’t be beggared for it given the really low charges.

However, don’t get carried away with everything the internet has to say. Ensure you do your research, scope out all your options, and read the fine print carefully before you make a decision.