Bank fees are what banks and financial institutions charge you to set up and maintain your accounts, along with continued access to banking services. Some fees are charged once, while others are recurring, often on a monthly basis. There are fees for opening an account, making transactions, transferring funds, an account having insufficient funds, and more.
Some of these charges may only be a couple of dollars, but others are closer to the $50 mark. These can add up if you’re not careful.
So, what are the most common fees you’ll encounter? Here’s a list of 10 bank fees and how you can steer clear of them.
Key Takeaways
- Bank fees are charges imposed by financial institutions for access to services such as transactions, overdraft, and ATM withdrawals.
- Ditch monthly account fees by banking with an online bank – they usually have lower overhead and pass these savings onto their customers.
- You can also avoid bank fees by adjusting your bank account settings or by getting a premium bank account.
1. Monthly bank fees
Monthly bank fees – also called account fees – are charged by most of the bigger banks in Canada. Simply put, it's the price you pay to keep your account open, to have money in it, and to use the banking services.
Some factors that can affect your monthly bank fees include:
- Whether it's a savings or chequing account
- Minimum balance requirements
- Whether or not you're with an online-only bank
- Your age and/or student status
- How long you've been a customer with your bank
For those with chequing accounts, the specific tier your account falls into can also determine the monthly fee amount you'll pay.
Here's a general overview of the four most common chequing account tiers and their associated monthly fees:
- Ultra Basic: around $5
- Basic: around $10
- Mid-Tier: around $15
- Premium: around $30
How to avoid monthly bank fees
The best ways to avoid monthly bank fees are to maintain your account’s required minimum balance, or to choose an account that doesn’t charge bank fees at all.
What to know about maintaining your account’s required minimum balance:
- The precise amount can vary from bank to bank, and even from account to account.
- Most mid-tier and premium bank accounts waive account fees with a specific dollar amount in your account.
An example is the Scotiabank Preferred Package, a high-end account that waives the $16.95 fee for clients who maintain a $4,000 balance. This account provides unlimited transactions and a 1 time annual credit card waiver.
Choosing an account that doesn’t charge bank fees is the best way to avoid them:
- There are lots of reputable and popular no-fee chequing accounts in Canada
- Online banks are known to offer no-fee bank accounts
The Simplii No Fee Chequing Account is a great example of a no-fee bank account. It offers free daily banking, a convenient debit Mastercard, and absolutely no monthly fees – no minimum balance required.
2. Statement fees
A statement fee is charged to banking clients who are mailed paper bank statements on a regular basis (usually monthly).
Even premium bank accounts charge these fees, mostly because it's considered an unnecessary service when all the pertinent information is available for clients online. And, theoretically, you can print it off yourself if you need a paper copy.
Not only is it possible for them to charge this fee for regular monthly statements, they can also charge an even higher fee if you request a paper copy of a statement from a specific prior time period.
Take a look at the statement fees charged by Canada's 5 biggest banks.
How to avoid statement fees
The easiest way to avoid this fee is to bypass paper statements entirely and switch to e-statements. All the information you require should be easily available online, and you can always print a paper copy if you need it.
Some banks automatically enroll new clients to receive monthly paper statements and will continue to send them until you change your account preferences.
Many online banks don't bother charging statement fees – this isn't really a surprise since everything is online and therefore doesn't require paper. Keep in mind, though, that you could still be charged if you request a paper copy of a statement.
3. Transaction fees
This term is self-explanatory – transaction fees are charges for individual payments you make with the money in your bank account.
Some banks or individual accounts will offer a certain number of transactions for free, as part of your monthly account fee. But going over this allotment means being charged a fee for each transaction.
What counts as a transaction? The list is quite broad:
- Payments made with a debit card
- Pre-authorized debits/payments
- Transferring money (either between accounts OR between people/banks)
- Sending wire transfers
- Interac e-Transfers
- Withdrawing cash with a teller
- Withdrawing cash from an ATM
How to avoid transaction fees
Perhaps the most obvious way to get out of paying transaction fees is to go with a no fee account, whether through an online or typical brick-and-mortar bank.
Some of the top no fee accounts that include unlimited free transactions are:
Many student bank accounts come with unlimited transactions too, as long as your student status remains in effect.
4. Minimum balance fees
Yes, this fee is exactly what it sounds like: you're charged if you don't meet the bank's specified minimum balance.
Most often, you'll find that banks won't charge a monthly fee if you meet the minimum balance requirement. But there are cases where instead of a monthly fee, there is a penalty charge for not maintaining a certain balance.
It's not common, but still something to watch for.
There certainly are perks to maintaining the specified balance, such as having certain fees waived and possibly earning higher interest rates for your savings. But sometimes the minimum amounts are quite out of reach and tie up money that could be better used for investments or savings.
How to avoid minimum balance fees
If your bank account requires you keep a minimum balance, here are some tips to do just that (and avoid those pesky minimum balance fees):
- Always keep at least the minimum balance in your account
- Avoid using ATMs not affiliated with your bank, as those fees can drain your bank account
- Open a low-cost account that offers fewer transactions per month
- Setting up a monthly direct deposit may get your bank to waive your monthly fee
- Banking electronically (as opposed to in-person at a branch) often costs less
- Get cash back by using your debit card in stores to avoid racking up costly ATM fees
5. ATM fees
It's hard to deny the convenience an ATM (also known as ABM) offers when you need some money fast. But that convenience often comes with a surprisingly hefty price tag.
To understand how and why ATM fees are levied, you'll need to understand the three different types of ATMs we have in Canada:
- Full service ATMs run by individual banks/financial institutions and usually found on-premises
- Off-premises ATMs run by individual banks/financial institutions
- Independently-owned and operated ATMs
Most banks won't charge their clients ATM fees for using the full-service machines at their branches (although it is possible, so check your client agreement). If you're using a full-service machine that's on-location at a bank that isn't the one you do business with, you'll likely be charged a fee.
Here’s a breakdown of ATM fees:
| Type of ATM | Fees for ATM use |
|---|---|
| At your bank | * Account fee: $0 - $2 |
| At another bank | * Account fee: $0 - $2 * Network access fee: $0 - $2 * Convenience fee: $1 - $5 |
| At an independently-owned ATM | * Account fee: $0 - $2 * Network access fee: $0 - $2 * Convenience fee: $1.50 - $5 |
How to avoid ATM fees
The solution to high ATM fees is simple: only use machines belonging to your own financial institution. However, this isn't always possible. Maybe you bank with a smaller institution that doesn't have a cross-country presence, or maybe they don't have any ATMs at all.
Some banks do have agreements with other institutions that allow clients to use ATMs from both companies. A few examples of this are:
- Tangerine clients can use Scotiabank ATMs
- Simplii clients can use CIBC ATMs
Other banks use a certain network of ATMs and offer their clients either free access or discounted fees for using this network. For instance, these institutions all use THE EXCHANGE Network, which is surcharge-free:
- Motusbank
- Alterna Bank
- Coast Capital
- Motive Financial
Some premium accounts also rebate ATM fees as part of their package, but just note that this often doesn't cover convenience fees charged by the ATM itself – only the bank's own fees.
6. NSF fees
The NSF acronym stands for Non-Sufficient Funds. Clients encounter this bank fee when the amount being debited from their account is more than the amount that's actually in the account. Sometimes, this may show up as "RTN NSF" on your bank statement – the RTN just stands for "return."
You can encounter a situation that results in NSF fees for many reasons. Here are a few examples:
- You write a cheque that gets cashed when there isn’t enough money in your account
- An automatic debit for a recurring bill comes out of your account, but you don't have enough money in the account to cover it
- You try to cash a cheque and the issuer doesn't have enough money to cover the amount it's written for
- Someone uses a fraudulent cheque to withdraw money and the amount is more than you currently have in the account
Non-sufficient fund fees vary from bank to bank – most are between $45 and $50, with a few exceptions. The highest one we found in Canada is $65, from Laurentian bank.
How to avoid NSF fees
Proper budgeting and making sure to track your spending will help you avoid NSF fees. There are plenty of mobile apps and financial tools to help with this, just do some research to choose which works best for you.
You can also sign up for automatic alerts from your bank once your account hits a certain threshold. Most Canadian banks offer this feature at no charge. You can also arrange it so that if one of your accounts happens to go under that threshold, funds are automatically transferred from another account.
$75 GeniusCash + Unlimited transactions for $0 + Ding-free non-affiliated ATM usage.
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$25 GeniusCash + Delicious meal choices with fresh ingredients + Front-door delivery.7. Overdraft fees
While NSF and overdraft fees are similar, they're not exactly the same. When you try to make a payment with insufficient funds but the payment is refused and returned to you, an NSF fee is charged.
With overdraft protection, the payment in the same situation would be accepted, causing your account to have a negative balance. You'll then be charged an overdraft fee.
Overdraft fees are really the fees you pay to have overdraft protection from your bank. And there are three methods your bank might use to handle your overdraft fees:
- Unlimited pay-per-use charges: You're charged a set fee every time you go into overdraft.
- Once per month pay-per-use charge: You're charged a set fee for each month that your account is in overdraft for at least one day.
- One monthly charge: You're charged a set monthly fee, whether or not you actually fall into overdraft.
And these fees are in addition to the interest you'll be charged on the amount that you're overdrawn, usually between 19% and 22%. Add this to the set amount of the overdraft fee and you could be looking at a very frustrating amount, but often less than an NSF fee.
How to avoid overdraft fees
If this is something you are adamant about never dealing with, the Scotiabank Ultimate Package is probably the best bank account for you. For a $30.95 monthly fee, you'll get unlimited transactions, earn Scene+ points on your debit transactions, and unlimited overdraft protection at no extra cost.
8. Interac e-Transfer fees
Canadians love using Interac e-Transfers – a service that allows you to send money to another person via an email or text message. A study published in May 2022 showed there were over 1 billion transfers made through this service in a 12-month period. That's more than $338 billion that's moved between users and bank accounts in a year.
Here are some examples of Interac e-Transfer fees charged by some of Canada's most popular banks. These numbers are for personal accounts only – we didn't include fees for business bank accounts.
| Bank | Fee to send | Fee to cancel transfers |
|---|---|---|
| BMO | $0 - $1 | $0 - $5 |
| TD | $0.50 - $1 | $5 |
| Simplii | $0 | $3.50 |
| Alterna Bank | $0 - $0.80 | $0 |
Keep in mind there are limits to the dollar amounts you can send via an Interac e-Transfer. There may be limits to how much you can send at one time, how much you can send per day, per week, and more.
These limits can vary by banking institution. For the complete list of limits, see: Interac e-Transfer Limit By Bank.
How to avoid Interac e-Transfer fees
There are a few banks with accounts that don't charge Interac e-Transfer fees.
Interac e-Transfers are usually considered a typical transaction, and therefore are included when a bank advertises free, unlimited transactions. Maybe the most popular examples of this are Simplii and Tangerine's no-fee chequing accounts.
9. Foreign transaction fees
If you use a debit card or a debit credit card outside of Canada to make online purchases in a foreign currency, you'll be charged a foreign transaction fee.
This fee can run anywhere from 1% – 3% of your purchase price, per transaction, applying to purchases made at a point-of-sale terminal and at ATMs. If you're using an ATM in a foreign country, you'll likely be charged ATM fees on top of a foreign transaction fee.
So unless you withdraw cash before you travel, these foreign transaction fees can pile up quickly. If you're an avid online shopper, pay attention to where your purchases are coming from, unless you want to get dinged with these fees on a regular basis.
How to avoid foreign transaction fees
There are two ways to avoid foreign transaction fees, and they're not mutually exclusive.
First, if you do a lot of purchasing in a foreign currency, specifically U.S. dollars, consider opening a U.S. dollar bank account. This way, you won't be constantly dinged with foreign exchange fees. You’ll have the freedom to wait for a decent exchange rate if you want to convert back to Canadian dollars.
You can also get a special credit card that doesn't charge any foreign transaction fees. This is a popular type of credit card and there are plenty of card options at all different levels.
10. Lost card fees
It is very easy to lose a debit or credit card. They're tiny little suckers who have a habit of falling out of wallets, purses, and pockets,never to be seen again.
Most of the time, your bank will understand and issue you a new card. But this isn't always the case.
Some banks charge lost card fees, or replacement fees. It's fairly common for a bank to give at least one free replacement card, but there may be a limit to how often they'll provide this over a specified time period.
For instance, Simplii Financial provides one free replacement card per year but may charge $4.97 each for any new cards issued afterwards.
It can be difficult to find information on lost card fees online. Instead, check your banking agreement to find out how your bank handles lost cards.
How to (potentially) avoid lost card fees
If your bank charges lost card fees, try contacting customer service and ask for the fee to be waived. If it's out of character for you to lose your card and it hasn’t happened before, your bank may be sympathetic and waive the fee.
It never hurts to ask.
FAQ
What are the bank fees at TD?
TD Bank charges a variety of different bank fees. For instance, there's a $2 fee for using non-TD branded ATMs (in Canada), a $48 NSF fee, and a $2 statement fee. Your banking agreement will have all the details.
Is there a way to get out of paying bank fees?
Yes, you can choose a no fee chequing account, use budgeting apps and sign up for account balance notifications, or use a no foreign transaction fee credit card instead of using a debit card to make purchases in foreign currencies.
Are BMO bank fees high?
BMO has average fees when compared to the big banks and pretty steep fees when compared to online banks. For instance, the account fees for their chequing accounts range from $4 to $30 per month, the fees for non-BMO ATM use is $2, and paper statements are $2.25.
Are bank fees tax deductible in Canada?
Unless you run a business and have a business account, bank fees are not tax deductible for Canadians. These are considered personal expenses, and these aren't considered deductible. If you work from home or run a business from your home, though, you may be able to claim them.
Which bank in Canada has the lowest fees?
Unsurprisingly, it's the online banks that offer no fee banking that have the lowest bank fees. Simplii Financial and Tangerine are two of the most popular online banks in Canada and both offer no fee accounts with unlimited transactions.
Are there banks in Canada with no monthly fees at all?
While all banks have certain fees, most banks offer at least one account option with either very low or no monthly fees. Depending on the services you want, an online bank is often the best choice for low fees.
How much does it cost to withdraw money in Canada?
You’ll pay between $1 to $9 to withdraw money from an ATM in Canada. These fees decrease when you use your financial institution’s ATM. Costs go up when you withdraw money from a non-affiliated ATM.
Do all banks charge withdrawal fees?
Not necessarily. EQ Bank offers free withdrawals on any ATM in Canada if you use the EQ Bank Card. Tangerine offers free withdrawals on partnered ATMs. Big banks typically don’t charge for withdrawals on their branch-located ATMs.
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