Sobeys, BMO to offer discount banking

Sobeys together with BMO Bank of Montreal is now offering discount banking services that they say will save customers $180 a year in bank fees.

It will compete with PC Financial and ING Direct for customers.

The savings results from waiving BMO’s regular $13.95 a month fee plus $25 worth of free cheques when a new account is opened, according to a Toronto Star report.

To the Club Sobeys Mastercard already offered by Sobeys and BMO, there is a no-fee chequing account and high interest savings account that pays 1.3 per cent on deposits.

A $5,000 minimum must be saved to get the rate.

Rewards that can be redeemed in Sobeys' stores can be earned by account holders.

Like other discount bankers, there could be other banking services in the future, such as mortgages, RRSPs and loans.

Experts say banking will provide a new revenue source for Sobeys, and since both BMO and the retailer are Air Miles sponsors, there can be more purchases tied into the rewards program.

By the end of the year, Sobeys plans to install some 100 ABM machines in its stores.