Canadian HSBC Business Direct Chequing Account Review – No Fees

by Mike Holman

I’ve been running my business as a sole proprietorship for about four years. Any cheques I’ve received have always been made out to my name. A personal PC Financial chequing account has served admirably as my “business” account, which gave me a place to deposit the cheques.

This year was a bit different – I started a publishing company, so that I could use Lightning Source as the printer for my book. As a result, all the royalty cheques are made out to “Money Smarts Publishing”. Since I can’t deposit those cheques in my personal PC Financial account, I had to open up a business account.

After doing a bit of research, I determined that most business checking accounts are quite expensive – in and around $10 per month or more in fees. In my case, I just need an account where can I deposit one or two cheques per month and do a withdrawal once a quarter.

I found out that HSBC (Hong Kong and Shanghai Banking Corporation) offers a free business checking account. It also handles US$, which is perfect since my publishing cheques are all US$.

Free has a price

This account isn’t for everyone – it has a limited number of transactions per month (20) and if you order cheques, they are very expensive. One workaround is to order cheques from a third-party cheque printer such as ASAP Cheques . I haven’t ordered any cheques yet, but I plan to.

Other major limitations are a lack of ATMs and charges on any EFTs.

This bank account is perfect for my business, but it will not suit the needs for many other businesses. Make sure you understand the limitations before signing up.

Another drawback to this account is the lengthy account set up timeline – it will likely take 4-6 weeks to get the account fully activated.

The basic steps to set up the account were as follows:

  • Fill out online app at HSBC.ca
  • They phoned me about a week later.
  • We played phone tag for about two weeks (this was partly my fault).
  • I set up an appointment to meet with a bank rep to sign a few documents. The appointment was very fast – only about five minutes.

Items you need for the appointment:

  • Two pieces of I.D. – I showed my drivers license and a visa card.
  • Ontario master business license as well as the federal license and business number.

About a week after the appointment, I got a bank card in the mail along with a “welcome” package with instructions on setting up the online login.

Setting up the bank card pin was tough – you have to call them and they take a LONG time to answer the phone. Once they activate the card, you get one hour to get to a HSBC ATM to set your own password. Given that all the HSBC ATMs in Toronto seem to be downtown, I would imagine that someone living out in Ajax would have do an Amazing-Race style dash to the city core. :)

Unfortunately, I wasn’t aware that I had to go to a proper HSBC ATM, not a no-name one, so it didn’t work for me. I phoned again to clarify, and she also told me I can get the pin reset in a branch which is what I did. I deposited some cheques at the same time.

I also found out that you can’t deposit US$ cheques in ATMs, so the whole pin number is a moot point anyways. :)

Setting up the online banking was a small hassle, but I think that’s true of all banks. One unique feature about HSBC is that they send you an electronic token which you have to use to login to your online account. This is good from a security point of view, but bad for convenience unless you can carry your token around with you (and not lose it).

Any other business owners out there? Where do you have your business account? Are you ok with the fees and service they offer?

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{ 14 comments… read them below or add one }

1 Adrian Dunevein

It seems like a lot of work to go through just to set up a free account and the usabilty seems limited too. Finding an HSBC machine when you need to deposit might be a problem.

It would be interesting to know what exchange rate they use for USA deposits. I used seperate accounts, one US and one Canadian to avoid exchange fees.

Another thing to consider is how long this account may be around. PC Financial is closing pavillions left and right to cut costs and Bizsmart closed their free business account several years ago.

2 Trevor Kearns

Hi, I hadn’t heard HSBC was offering a no-fee business bank account, fantastic for the self-sufficient clients out there! As a small business advisor working for one of the big 5, I sympathise with the higher fees charged to business accounts when often, all a client needs is a place to clear their funds… I remember when PC first came on the scene and everyone flocked to them so as not to pay monthly fees, which again, I thought was great. One thing I have noticed over the years is many customers still want personalised service and advice and in most cases they don’t mind paying the fees as they value the fact there is someone dedicated to their portfolio of services and gets to know their personal and business needs. I’m not sure this always happens on the virtual banking side…. Regardless, I do have a few clients who will be very interested to hear about the HSBC offering!

Before I forget, in the article you mention the lack of ATM machines. HSBC is part of the exchange network: http://www.the-exchange.ca check it out. When I worked for a smaller competitor (also part of the Exchange network) I found there were sometimes more ATMs available than some of the banks!

3 wendi1

I use TD Canada Trust. They have a small business Cdn$ account that costs $11.95 a month (waived if you keep a moderate balance), with limited free chequing and other transactions.

This is fine for me – there are plenty of ATMs and branches, and I deposit a couple of cheques and write about 6 or so every month. I recall the set up was a pain – endless documents and signatures and about an hour with a specialist.

4 Mike Holman

@Adrian – I think the setup for any business account is a pain, the HSBC is just more of a pain. :)

I’m walking distance to an HSBC branch (and ATM), so that works well for me.

I’m not sure what exchange rate they use. My account handles US$, so there is no exchange taking place.

@Trevor – I don’t think you are going to get much personalized service with a free account. In my case, I don’t want any service which is why this account works for me.

HSBC has other (more expensive) business accounts as well which offer more services.

@Wendi1 – That TD account sounds pretty good. The only problem for me is that I don’t want to keep a minimum balance. My business has very low expenses, so I just don’t need the cash hanging around.

5 Mike Holman

And a comment from a shy emailer:

I am with RBC and you get what you pay for. I don’t have time to waddle around with HSBC. Ten bucks a month for convenience is a small price to pay in my mind. I run a sole proprietorship also.

6 Sean

I used to have a personal account at HSBC not a business account. I didn’t like their service one bit and closed it after a year. They have a really quirky old fashioned way of doing things.

No trouble finding ATMs though.

7 Jim Yih

Hey Mike! I use Manulife Bank and have been doing so for years. No monthly fees. There are some user fees but nothing significant. I can write cheques, pay bills and I can a green bank card. I love my account.

8 Mike Holman

Hi Jim – thanks for letting me know about that bank account (and bank for that matter).

I’ll look into it and add it to the post.

9 Jeff

I just started my own Sole proprietor business. As I’m a consultant, most of the transactions are deposits and not a lot of withdrawls. Mainly it was use to separate income for the business from family income. I wanted to setup a business account with ING because at least they pay interest on deposits. Unfortunately, to set one up you need a business account with another bank. HSBC seemed the best choice since no monthly fees, I can recieve payments to the HSBC account and then transfer the business assets into the ING account to earn interest well determine where to invest it in the business. Started setting up the HSBC account in early Feb, well I finally got it setup now I have to order cheques to get ING a void cheque to setup the transfer between accounts. So probably another 3-4 week delay while I wait for the cheques. Certainly not a quick process or painless process but I still think it’ll be beneficial in the end. Forunately, much of my consulting is downtown TO so accessing the HSBC main branch wasn’t too difficult, can’t imagine the process everyone not in the GTA must go through. As a suggestion to those in the downtown core, don’t apply online, go into the main branch and setup the account in person. I’m sure it will reduce your waiting period to get the account setup by 3-5 weeks and they will print you temp cheques, so you don’t have to buy cheques upfront. I learned that the hardway when I went to get a couple temp cheques printed to at least setup the ING transfer. They wouldn’t do it for me because my bank isn’t the head office as a result of filling my application out online.

10 Lisa

I have to say the HSBC Canada free business account is quite the worst banking experience. It’s no wonder it’s free. Just found out another hidden charge. For the online tax service, there is $25 setup fee and then $2.75 per remittance fee and then $2, if there is no remittance. This works out the same as paying the monthly fee at the banks that have a direct filing service. If I’d known, I would not have signed up with HSBC.

11 Mike Holman

Lisa – I’ve come across a problem myself. I deposit US$ cheques into my business account, but I can’t do it at the ATM, so I have to use a teller which means there is a $5 charge each time.

It’s still cheaper than a regular business account, since I only deposit these chqs once a month, but it’s a bit annoying.

12 Albert

Hi,
I work for a consulting company, we use HSBC and we have another account with TD.
Definitely lots of headaches and no such thing as free with HSBC. We end up paying for every transaction actually more than with TD.
However the good thing is that HSBC allow you to send wire transfers from their online banking site.
The other good thing is that when receiving wire transfers they will include all the information about the sender on the transaction on their site so you can allocate the funds to each particular invoice.
This two simple things are not been provided by the “big banks” in Canada, which I thougt was completely dumb being in the internet era. I have contacted each of the five banks and advised that lots of potential customers are interested in those two simple things but they do not care because they cater mostly to larger companies.

Regards,

13 N N

I have 2 business direct accounts at HSBC and just got a letter telling me they will close one of my accounts. Speaking with the manager who issued the letter, no reason was provided and was told they don’t need to tell me why they are closing the account. Very unprofessional and cost me money to get cheques printed. You get what you pay for with HSBC, terrible service, on hold for 15+ minutes when I call and no reason account closures. I’m moving both accounts to RBC e-account.

14 Olga

I left TD because their fee has increased twice since I started the business banking account. I went to HSBC. My experience opening account and searching for ATMs was similar to one described here. However, I was really pushed to use ATM machine or a teller because e-transfers are not a part of this offer and cheques are expensive. Now, get this: bank is open from 10 to 4 and there are only several branches in the city.
It’s not for everyone.

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