You probably know when your paycheque gets deposited and roughly how much your monthly cellphone bill costs, but it might be harder to answer a fundamental question about your bank account: how much are you paying in fees?
Just about every bank offers a variety of chequing accounts, all with different privileges, fees and limits for certain transactions, and choosing the right one can help keep a lid on those fees.
“The best way to manage bank fees is to understand what you’re using it for and whether there are some key features that you need or not,” Natasha Macmillan, director of everyday banking at Ratehub.ca, said.
“It really depends on the kind of purpose and use of the chequing account that you’re looking for.”
Canadians who have limits on different types of transactions made within their account could be paying more without even realizing it -- such as incurring additional charges every time they send an e-transfer or withdraw cash from an ATM, Macmillan said, which could cost anywhere between $1.25 to $2 per transaction.
A 2024 report from Alberta-based consultancy firm North Economics says the Big Five banks in Canada charge a fee between $1 and $5 to non-customers withdrawing cash from their ATMs, while the customer’s own bank could charge $2 to $3 per transaction for using another bank’s ATM.
The report suggested Canadians are overpaying by more than $7.7 billion a year in bank fees. It compared fees at Canada’s Big Five banks with what consumers face in the U.K. and Australia.
The Canadian Bankers Association said the country’s competitive banking system “provides good value, ready access and wide choice for consumers and businesses.”
“Canadians can choose the account that most effectively aligns with their needs and offers the best value, whether it be a savings, chequing, low-fee, student, or senior account. With over 100 account packages available in the marketplace, there is an extensive range of options to cater to the diverse financial requirements of Canadians,” the association said.
While many bank fees are very visible, certain charges can go unnoticed.
Macmillan said foreign transaction fees are the most common kind people are unaware of. That applies when people are making online purchases on an international website or while travelling abroad.
“Not only will you get charged a foreign transaction fee but you might also get charged on the currency conversion fee,” Macmillan said. “That typically is what we call hidden cost because you may only realize these fees once you see that final amount on your statement.”
Other costs such as transaction fees, non-sufficient fund fees or overdraft fees can also be common on bank statements, Macmillan said. Non-sufficient fund fees can be as high as $50.
Often, money transfers sent to business accounts can also come with additional charges and go unnoticed, Macmillan added.
“Sometimes, people assume that it is free but isn’t always at a zero cost.”
Going over the set transaction limits in your bank account can get pricey.
If someone is constantly going over those limits—using their debit card a lot or sending too many e-transfers thinking it’s free, the bank can levy additional costs, financial educator Kelley Keehn said.
Keehn said people should sit down once a year to go over their bank account cash flows and shop around for better deals.
She said figuring out your spending pattern can help you find a chequing account that’s best suited to your needs. That means assessing factors such as the number of times you’re using your debit card per month, withdrawing cash from a different bank’s ATM, writing cheques and how often you visit the bank branch.
Keehn said most bank fees can be negotiated if a customer is in good standing or has multiple products with the lender.
“If you’ve got a few products with your bank—maybe a credit card, mortgage, line of credit, RRSP—call them up and see if they will either waive the fees or discount the fees,” she said.
Some financial institutions will also waive the monthly account fee if the customer maintains a specific minimum balance.
For instance, Scotiabank waives account fees if a customer maintains a daily closing balance of $6,000 for the entire month.
Macmillian adds that whenever you’re charged a fee by your bank, make sure you know what it’s for.
“If you are looking at a specific fee that you’ve been charged, I have found it’s actually personally helpful to call the bank directly and have them kind of explain some of those fees,” Macmillan said.
