Common Canadian Bank Fees and Charges: A Simple Guide

May 6, 2022

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A bank account can make saving and using your money easier; however, banks typically have fees to hold your hard-earned cash and facilitate transactions.

Bank fees could easily take up hundreds of hard-earned dollars every year. Banks can decide to increase their prices as they’d like, which leaves you with two options: either pay them or move your money elsewhere.

Suppose you’re fed up with having to pay high bank charges or are just learning about these charges for the first time. Here’s the information you should know why they exist and how you can stay clear of them.

What Are Bank fees?

Canadian banks might appear to be public entities; however, they’re business first. As with all companies, they are looking to earn profits, and so they charge their customers for their banking services. The most commonly used bank charges include:

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Monthly Fee. This charge is only to keep your account in good standing and the money. Certain banks will waive the fee if you permanently maintain the appropriate amount of cash in your account.

Transaction Fees. Certain bank accounts permit the use of a certain amount of transactions free of charge before this fee is imposed. Transactions include debt payments and transfers (mainly from the savings account) or wire transfer charges. The cost of receiving wire transfers is typically lower than sending wire transfers.

Statement Fee. A fee is typically due if you request the bank’s statements in paper form to be delivered to your postal address each month. When you receive electronic messages or view your account online, the cost can be lowered.

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ATM Fees. These charges are due for each ATM withdrawal that isn’t part of the banking institution’s ATM system or when the amount of ATM withdrawals you make is greater than the number of leaves free with your bank plan.

There is a Non-Sufficiency Funds (NSF) Charge. The fee is assessed whenever you attempt to execute any transaction more significant than the amount in the bank account. It is possible to avoid paying an NSF fee when you have overdraft insurance.

Charges for Overdrafts. When a transaction brings your account to below a zero balance, the cost will be charged. You’ll be charged an amount and interest for each day your account is in excess.

Interac fee for e-Transfers. This is a charge that you pay per electronic transfer. Certain bank accounts offer the option of a certain number of free transfers, but if you surpass the limit, you’ll be charged fees.

How to Avoid Bank fees (When Possible)

Specific fees can’t be eliminated. If you’re not able to pay to finish a transaction, you’ll encounter an NSF fee. However, you can steer clear of some of the most frequent bank charges by choosing the type of account and bank with care.

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1. Select a bank with a no-fee account

Online-only, branchless banks such as Tangerine, Motus Bank, PC Financial, and EQ Bank frequently offer savings and chequing accounts with minimal or no fees. These digital-first banks could also provide higher interest rates than traditional banks for their savings and checking accounts.

Although these online banks might not have charges, they may not offer the same customer service and account choices or features as traditional banks. Keep that at the forefront when choosing where to deposit money and what kind of account you should open.

2. Check carefully the small print

Before you open a new bank account, be sure you’ve read the complete conditions, terms and conditions, banking agreements, and fees statements. Although they may be challenging to locate, they are typically accessible within the small print or in the Terms and Conditions section on the bank’s website. (For most of the time, fees are standard across all accounts in one bank.) It is possible to receive the documents in hard copy after you open your account. However, it is better to be aware of the fee structure before taking the plunge. This will allow you to determine and locate the funds that have the most affordable charges.

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3. Check your balance

Since certain banks offer monthly fee-free services as they maintain an adequate amount of balance, you should be aware of how much there is on your accounts at any given time and then mentally subtract that amount into what you consider to be “available for spending” cash.

4. Keep within the transfer and transaction limitations.

Plans that offer unlimited transactions usually include higher monthly charges. Be sure to withdraw your funds only at ATMs in your network to ensure that you don’t be charged a fee. Ensure you know where you stand in your transfers and transactions each month. Record your transactions as accurately as you can with calendars, spreadsheets, or a budgeting application to ensure that you don’t get caught off guard by unexpected costs.

5. Meet with the branch

If you’ve become a faithful customer at your bank, it might be time to schedule a meeting with a representative from your branch. Branch managers might be able to waive fees and confer this authority on their employees, expressly, when you inform them that you’re planning to move your account due to charges. Request them to review your account transactions and determine where they could perhaps lower or even eliminate your fees. A few examples of what they might be able to offer include:

  • Reducing your monthly charges.
  • Combining all your banking services into one bundle by making a single monthly charge.
  • Negotiating the best interest rate.

6. Setup emails or text messages to notify users

It’s possible to connect your bank account to text or email alerts to know when an automatic payment is due, a report is closed, or your balance drops below a set amount. These alerts can help you avoid paying non-sufficient fund charges, overdraft charges, and monthly account overage charges. Being conscious and alerting yourself to the status of your bank account at every moment will aid you in avoiding fraud and identity theft since you’ll be aware of suspicious transactions. This allows you to alert yourself to suspicious activity before it’s too late to save your cash.

7. Choose a banking package.

A lot of the central banks in Canada offer packages of banking that bundle the banking services for the cost of one month. You won’t be paying each time you use the transfer of accounts, Interac e-Transfers, and international money transfers. This will help you save on monthly fees. A monthly cost in the package will usually be less than what you’d have to pay each time you utilize every banking service you can think of, provided you are using those services regularly enough.

8. Take advantage of the multi-product discount.

Additionally, you can save on costs by bundling bank features and services. Sometimes, banks offer special offers that allow you to earn cash back when you use multiple banking services or finish many tasks within one bank, like making direct deposits or an automatic debit card recurring payment.

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