Scotiabank has a unique savings program, called Bank The Rest, that rounds up your purchase to your choice of either the nearest $1 or $5. The extra amount is automatically transferred to a savings account for you.
While this might sound like an easy way to save, the total savings may not be that much. If you use your debit card 30 times a month, on average your savings would be either $15 or $75, depending on the option you chose. This would be $180 or $900 a year. As you can see, the $1 option does not build up a very large balance in your savings account. The $5 option could lead you to a significant balance in your savings account, but it might have been at the expense of your chequing account.
It’s the encouraged spending that concerns me about this program. The marketing is geared towards telling their clients that to save, they should spend their money. Here are two quotes from the Scotiabank website that caught my attention:
“Use your Scotiabank debit card to buy lunch, gas, groceries, or just about anything you want, and your purchase will be automatically rounded up.”
“The more often you use your debit card to make everyday purchases, the more you’ll save.”
If you are looking for a way to save money automatically, consider setting up an automatic withdrawl from your chequing account to your savings account. If your a Scotiabank customer, their TFSA would be a good choice. You could have it set up to automatically save $75 a month and still have $900 in a year, but you wouldn’t have made unnessesary purchases to get there.
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