How to get the best interest rates? Ask

You may think you’re getting the best interest rate on your savings account. But unless you keep checking to see if a higher rate comes along, you can be left behind.

You may think you’re getting the best interest rate on your savings account. But unless you keep checking to see if a higher rate comes along, you can be left behind.

Here’s a cautionary tale about Rob Young, who didn’t ask enough questions about his savings account at TD Canada Trust.

In July 2010, Young got a letter saying his TD Guaranteed Interest Account was being changed to an Everyday Savings Account. He would have the same account number and interest rate.

If this account no longer suited his needs, he could book a free assessment, he was told.

TD launched a new High Interest Savings Account at the same time, paying more than Young was getting. But he didn’t know about it until recently.

Why didn’t anyone say he could have boosted his savings rate? He had come into the branch many times to update his passbook or transfer money to his chequing account.

Young complained to the branch manager, who sent him charts showing the interest rates on both accounts for his $45,000 in savings.

On July 24, 2010, he was earning 0.85 per cent in annual interest with his Guaranteed Interest Account. His rate dropped to 0.75 per cent, 0.6 per cent and then to 0.5 per cent in April 2011, where it has stayed.

The High Interest Savings Account was paying 1.1 per cent in July 2010. The rate rose to 1.25 per cent in October 2010 — before going to 1.2 per cent in September 2011 and staying there.

Young was out one-quarter of a percentage point by staying with his original account. Later, he was out almost three-quarters of a percentage point.

“I made about $240 in interest last year, but could have made $540,” he told TD.

“Over the years, I’ve been asked about the $45,000. Would I like to make an appointment with a TD adviser for mutual funds? But I’ve never been told about the high interest savings account.

“Why do I need to hear about it on the street? How do you think this made me feel? Will TD make up the difference since the account’s inception?”

Young wrote to TD chairman Brian Levitt, who acknowledged his email but offered no reimbursement. The TD ombudsman also brushed him off.

“The decision to realign savings accounts was a bank-wide policy change implemented across the customer base and is therefore not within the mandate of the ombudsman’s office to review or change,” he was told.

TD said it was his responsibility to look for other savings opportunities or get a free assessment.

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I believe that large companies should treat loyal customers with respect. And when Young wrote to me, I asked if he had other accounts at the bank.

Yes, he had a mortgage, which he planned to move at renewal. He’s been a customer for 25 years, starting in the Canada Trust days when he used a Johnny Cash machine.

“I enjoyed getting a yearly Christmas card. I enjoyed the fact that many tellers have known my name, known that my Mom or Dad had died. That is what a good banking relationship should be all about,” he said.

Bingo. TD spends millions of dollars to show it cares for clients. How can it turn down a request for a few hundred dollars by a longtime client who feels the bank ignored his needs?

Spokeswoman Barbara Timmins said the details of the new account hadn’t been finalized when the letters of notification were sent to GIA customers.

“We train our branch and phone staff to have regular conversations with customers to ensure they’re in the right account for their needs. We also provide full information about account options on our website (as well as in branch) and have an account selector tool.

“Unfortunately, the customer did not benefit from either. In this case, we are prepared to make a goodwill gesture to compensate him for the interest rate differential between the two accounts.”

Here’s my advice: Never assume you’re getting the best deal. New plans come out all the time — and companies don’t always tell you about them.

But if you miss out on a deal you think you deserved, play the loyalty card. Say you plan to leave and take your friends and family with you. That alone can turn the odds in your favour.

Related: Why Canadians pay more for everything

Ellen Roseman writes about personal finance and consumer issues. You can reach her at eroseman@thestar.ca or www.ellenroseman.com

Image: RAFFI ANDERIAN.

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