There is an HSBC Canada branch opposite the building where the Ottawa office of The Globe and Mail is located. Working in the office, I used to occasionally stop in the branch to use the ATM. I was not an HSBC customer, but the bank was part of an ATM network that I had access to for free a few years ago.
It’s the closest I’ve ever had to dealing with HSBC, but I will always miss the bank’s quietly important role in Canadian banking. Earlier this week, Royal Bank of Canada launched a $13.5 billion bid to buy HSBC Bank Canada.
Our mortgage specialist, Robert McLister, has already detailed how HSBC has helped keep the mortgage market competitive. “For six years, HSBC has advertised rates typically 20 basis points or more lower than the so-called ‘special offer’ rates promoted by the big banks,” he wrote. A basis point is one hundredth of a percentage point.
HSBC, with only 130 locations in Canada, offers a unique global perspective in its customer service. On its website, you will find a mention of savings accounts available in Hong Kong dollars and renminbi, the official currency of China. There are also savings accounts in US dollars, British pounds and Euros.
Like all major banks in Canada, HSBC offered an online brokerage division. I’ve followed online brokers for decades and never considered HSBC InvestDirect a top pick. But InvesDirect has long been a leader in one area: providing its clients with access to global equity markets. Customers have access to 30 domestic and international markets and can access the North American, Hong Kong, French and German markets on a mobile device.
Many brokers offer accounts denominated in Canadian and US dollars. HSBC InvestDirect allows you to open accounts in up to 10 foreign currencies, including US Dollar, British Pound, Japanese Yen, Swiss Franc and Australian Dollar. Having a foreign currency account can save you money on exchange fees. For example, you can sell a US stock and keep the proceeds in US dollars instead of paying the cost of a Canadian currency conversion.
RBC’s purchase of HSBC will be reviewed by regulators and may not be finalized until late next year. But we already have a reminder of how difficult it is for small banks to compete with the Big Six. Size matters in Canadian banking. Unfortunately, it is often the smaller players who compete the most.
Subscribe to Carrick on Money
Do you read this newsletter on the web or did someone email you the version? If so, you can sign up for Carrick on Money here.
Rob’s Personal Finance Reading List
He struggles to become a homeowner
A financial planner and blogger explains why he has no interest in becoming a homeowner. He and his partner are selling their current home before moving into a newly built home next year. He was repeatedly asked if they were going to rent out their current home. “After I stop laughing, I explain why I have no desire to own a rental property.”
Is there a Ginsu in your kitchen?
The story of the Ginsu, the super cheap and brilliantly marketed kitchen knife that appeared in the 1990s and generated multi-million dollar sales. We need more affordable indulgences like this.
An Introduction to Stuffing Money
This retro concept of promoting savings — putting money in labeled envelopes for specific purposes like groceries — caught on with young adults looking for a way to structure their finances. As you wish.
The myth of eternal happiness in retirement
An article for financial advisors about how some of their clients will lose their sense of purpose when they leave the workforce. This quote from a consultant who works with advisors is obvious: “There is this myth that when I retire I will be forever happy, and I think that contributes to the fact that many people are actually unhappy.”
Ask Rob
Q: Central bankers seem to be aiming for 2% inflation. Why do they want inflation? Here’s a contentious question: Why should employees get automatic raises that aren’t based on merit?
A: Too low inflation suggests a slow growing economy that is not generating enough prosperity. Increases in the cost of living help workers maintain their purchasing power. These days, we can clearly see the downsides of people feeling overwhelmed by the rising cost of living. Financial stress levels skyrocket, which in turn trickles down to the workplace through reduced productivity and increased absences.
Do you have a question for me? Send me. Sorry I can’t answer each one personally. Questions and answers are edited for length and clarity.
Today’s financial tool
The Savvy New Canadians blog is offering four $1,000 semester scholarships in financial literacy for college students. Here’s what you need to know to apply.
The cashless zone
Some Soul Wonders of the 60s: Someone to Meet My Needs by The Moovers.
look at this
Have you ever seen the TV ad about buying your spouse a car as a surprise Christmas present? Here’s the take from Saturday Night Live.
In case you missed these Globe and Mail articles on personal finance
More Rob Carrick and Financial Hedging
Subscribe to Stress Test on Apple Podcasts or Spotify. For more money stories, follow me on Instagram and Twitter, and join the discussion on my Facebook page. Gen Y readers, join our Gen Y Money Facebook group.
Even more Rob Carrick coverage:
.