Is TD Bank a Good Bank for You?

FT Contributor  | 

If you’re in the market for a new bank, you might be tempted to open an account at the nearest institution — or the bank that’s offering a generous new account bonus. Although either option could turn out to be perfectly fine for your needs, it’s a better idea to do some homework and compare your options before opening a new account. Every bank is different in terms of account terms, fees, interest rates, and more, and what seems like a great deal at first could end up costing you in the long term.

Consider, for example, that a 2012 report from the U.S. PIRG Education Fund found that in general, smaller banks and credit unions charged fewer and lower fees than large banks, and most offered free checking accounts without any stipulations. Large banks might offer generous sign-up bonuses, but that extra $100 to $300 can easily be eaten up by monthly maintenance, ATM, and other fees.

As one of the largest banks in the U.S., with locations up and down the East Coast, TD Bank’s major selling point is convenience. Depending on which account you choose, though, and how you use it, that convenience comes at a price. To help you determine if TD Bank is the right choice for you, we’ve compiled an overview of the account options and fees, and some points to consider before signing up.

TD Bank Financial Services

TD Bank offers a full complement of checking and savings accounts for individuals.

Checking Accounts

TD Bank offers four checking account options: TD Beyond Checking, TD Convenience Checking, TD Simple Checking, and TD Simple Plus Checking.

TD Beyond Checking: This interest-bearing account charges a $25 monthly maintenance fee, which can be waived if you make $5,000 or more in monthly direct deposits, maintain a daily balance of $2,500 or more, or have a combined total of $25,000 or more across all your TD accounts.

With this account,you receive automatic overdraft protection, your ATM fees are reimbursed, any overdraft fees are waived (up to twice a year), and you won’t pay any fees for rush bill payments. Money orders and bank checks are free as well. Beyond Checking customers also don’t pay any fees on savings or money market accounts, and you may open an additional Simple Checking account without a fee.

TD Convenience Checking: TD’s most popular checking account option, Convenience Checking does not charge a monthly maintenance fee as long as your average daily balance exceeds $100. Otherwise, the fee is $15. Paper statements cost an additional $1. This account does not earn interest, and you’ll pay fees to use non-TD Bank ATMs. You can connect the account to a TD savings account for overdraft protection.

The TD Convenience Checking account is also the bank’s offering for students. Students between the ages of 17 and 23 automatically have the monthly fee waived, regardless of balance.

TD Simple Checking: If you don’t want to worry about meeting balance minimums to waive monthly fees, TD’s Simple Checking account charges a $5.99 monthly fee regardless of balance. Paper statements are an additional $1. Otherwise, the account is identical to Convenience Checking.

TD 60Plus Checking: Customers aged 60 and older can open a TD 60Plus account. The monthly fee is $10, unless you maintain a daily balance of $250 or more. This interest-earning account includes free paper statements, as well as free bank checks and money orders. A linked savings account provides overdraft protection.

Savings Accounts

TD offers two savings account options: TD Simple Savings and TD Preferred Savings.

TD Simple Savings: This account pays 0.5% interest on all balances. The monthly fee is $5, unless you maintain a balance of $300. The fee is automatically waived for students and anyone under age 18 or over 62. If you make at least $25 in automatic transfers from your TD checking account each month for the first year, you won’t be charged a monthly fee either.

TD Preferred Savings: This account rewards higher balances with higher interest rates. All accounts earn a minimum of 0.15% interest, but as your balance grows, that rate can increase up to 0.75%. Preferred Savings accounts have a $15 monthly fee, which is waived if you maintain a balance of $20,000 or more or if you link the account to a Beyond Checking account.

Money Market Accounts

TD Bank offers the TD Growth Money Market account, which pays a maximum of 0.25% interest, with interest rates tied to your balance. The lowest rate is 0.03%. The monthly fee is $12, but that is waived if you’re over 62, keep a balance of $2,000 or more, or link the account to your TD Beyond Checking account.

Certificates of Deposit

TD Bank offers certificates of deposit for three, six, and 12-month terms. Three-month CDs pay 1% at maturity. Six-month CDs pay a maximum of 0.90%, while the 12-month option pays a maximum of 0.80%. Interest rates are compounded monthly.

The Pros and Cons of an Account With TD Bank

As with any bank, there are pros and cons to banking with TD Bank.

Pros

  • More than 1,300 locations along the East Coast from Maine to Florida.
  • Maintains longer hours than most banks, with some locations open on Sundays.
  • 24/7 access to your money via online banking and full-featured mobile app.
  • No minimum opening deposit requirements for checking accounts.
  • Low daily balance requirements for fee waiver on Convenience Checking.
  • Money market accounts reward consistent savers by increasing interest rates for regular transfers.
  • Receive relationship benefits for opening several different accounts.
  • Student checking account has no requirements for fee waivers, unlike other banks.

Cons

  • No physical presence in the Midwest or West Coast.
  • High monthly maintenance fees.
  • No option for maintenance fee waivers on Convenience Checking accounts for direct deposit.
  • Convenience Checking does not earn interest, and interest rates on Beyond Checking accounts are low.
  • Fees for using non-TD Bank ATMS are only reimbursed with Beyond Checking Accounts.
  • Overdraft fees are high ($35) and the bank charges up to $175 per day.
  • Savings account interest rates are lower than average.
  • High savings balance requirements for the highest interest rates.
  • CD interest rates are compounded monthly, not daily.

Is TD Bank Right for You?

If you live on the East Coast, TD Bank is a convenient banking option, given its extensive branch and ATM network and long opening hours. For those who prefer to bank in person, TD Bank rises above other banks in terms of access. And if you are diligent about meeting the requirements for fee waivers, the checking and savings accounts are affordable options. However, it’s important to use only TD Bank ATMs for cash (unless you have a Beyond Checking account), as unreimbursed ATM fees can take a big bite out of your balance.

That said, if you are looking for a bank with competitive interest rates, TD Bank may not be the best option. Most of the major online banks offer much higher interest rates on checking and savings accounts, and many have low or no fees and balance minimums. Most online banks also reimburse all or most ATM fees. So while opting for an online bank over TD Bank means you won’t have access to a physical branch whenever you need one, you will gain flexibility in terms of ATM access.


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