Tuesday, May 06, 2008

Every little bit helps

I've gotta say, it's rare that one of the Big Banks comes up with a promotion that doesn't immediately make me raise my suspicious eyebrows, but I'm pretty impressed with Scotiabank's recent savings-incentive program, Bank the Rest.

Essentially, the program takes extra cash every time an enrolee makes a debit transaction from their chequing account and puts the difference into a high-interest savings account where it accrues a lot more interest that it would otherwise have done. The program can be set to round up to the nearest $1 or $5. If you spend $6.23 on lunch, for example, Scotia would take an extra 77 cents, round the transaction up to $7, and deposit the difference into a savings account for you. Best of all, it's free of charge. The net result? A banking customer who wouldn't otherwise have the discipline to save some rainy day funds gets an automatic savings account that build in tiny increments over time. In exchange, Scotiabank no doubt gets a few new members for its Money Master High Interest Savings account.

Obviously, this isn't the sort of program that a regular saver would find much use for. But I'm inclined to applaud Scotiabank's attempt to turn a few compulsive spenders into accidental savers.

If you find it difficult to find the will to put away a little excess cash every month, I'd encourage you to consider this program (especially if you're already a Scotiabank customer.) I promise, you won't notice the extra 90-odd cents every time you make a debit transaction. And you'll be amazed how quickly it can add up.


MG said...

Interesting concept...I agree with you.

tracyho said...

Great ideals , accumulate money with more sense ,

All the best ,

Tracy Ho

Jim Somerville said...

Yeah, by the end of the month all those extra pennies might help pay for all the service charge gouging. Also, what a great way for the bank to seem to be helping people to save, but in reality just be increasing the odds of tripping accounts into overdraft where the real juicy service charges come into play. People using this scheme to try to save money are the ones typically on the hairy edge of a zero balance.

Seriously though, if this is your primary savings plan then somebody should take you aside and fill in some of the gaps in your money sense.