Whether it’s a savings, chequing, low-fee, student, or senior − full of bells and whistles or a plain vanilla account − there is a lot of choice for Canadians and over 100 account packages to choose from in the marketplace. And banks have worked hard to ensure that there are low-cost accounts, priced at $4 or less per month, for those who need or want them. Youth, students, seniors, Registered Disability Savings Plan beneficiaries and newcomers to Canada can access discounted or free accounts.
While 31 per cent of Canadians say they pay no service fees at all and another 45 per cent pay $15 or less per month1, there are ways to reduce the bank service fees that you pay.
Here are some tips on finding the account package that best meets your needs:
- Maintain a minimum balance ‐ It’s also possible to avoid monthly service fees if your bank waives these fees when you maintain a minimum monthly account balance. If you have additional products with that bank (e.g., a mortgage or credit card), ask if your bank offers rebates on service fees.
- Ask for senior’s discounts if you qualify ‐ Do you qualify for a senior’s account? Many banks offer free or discounted banking to those who are over 59 or 60. If your bank doesn’t know your age, you may need to ask for the senior’s discount. Check with your bank to see if you qualify. Seniors receiving the Guaranteed Income Supplement are entitled to a basic bank account at no cost.
- Ask for youth or student accounts ‐ Banks offer basic bank accounts with no monthly fees for younger customers and students. Check with your bank to see what accounts it offers.
- Use cheaper online banking services ‐ There are accounts available that offer discounts or even free banking if you use only online services.
- Plan your withdrawals ‐ How many times do you withdraw funds at a bank machine? If your account package has a limited number of withdrawals, make fewer but larger withdrawals to save on fees.
- Take advantage of cash back ‐ Did you know that many retailers offer cash back options at no additional charge when you pay with your debit card? Pay for your purchases and get cash from the retailer to avoid extra bank transactions, or if you can’t make it to your own bank or your own bank’s machine.
- Avoid convenience fees ‐ Use only your own institution’s bank machines. You’ll save on fees that the other bank machine owners charge to use their machines.
- Sign up for a low or no-fee account ‐ Sign up for a low or no-fee account if you only have a few transactions each month. Use the FCAC’s online Account Comparison Tool to see if one of these accounts might meet your needs. Check whether your account package is still suited to your needs ‐ If you use more than the number of transactions allowed by your current plan, you may be paying per transaction charges over and above your monthly package cost. A different service fee plan that might appear to cost a bit more each month might save you in the long run by eliminating extra per-transaction charges.
- Check whether your account package is still suited to your needs ‐ If you use more than the number of transactions allowed by your current plan, you may be paying per transaction charges over and above your monthly package cost. A different service fee plan that might appear to cost a bit more each month might save you in the long run by eliminating extra per-transaction charges.
- Shop around ‐ Shop around for a banking package with lower or no fees. It’s easy to compare the banking packages available using the online interactive Account Comparison Tool available from the FCAC website. The tool compares close to 100 different account packages from more than 20 financial institutions, so there is plenty of choice. It pays to shop around.
- Consider overdraft protection ‐ Do you frequently write a cheque that bounces and pay NSF (i.e. not sufficient funds) charges? If so, you might want to consider applying for overdraft protection. The small monthly charge might turn out to be less than you are paying in NSF charges. And some financial institutions levy the overdraft charge only in months when you actually use the overdraft, so there could be additional savings there. Ask your bank or shop around to find an arrangement that works for you.
Remember, in Canada’s competitive marketplace, you have a great deal of control over the service fees that you pay. Talk to your bank, look at your banking habits, and compare account packages and services using the FCAC’s online Account Comparison Tool. You may be able to reduce your banking service fees.
1 Abacus Data, Assessment of Canada’s Banks, December 2016