After Kathryn’s post about financial pet peeves, I’ve gotten a lot of feedback and emails regarding bank fees. If you’re the type to read financial blogs, then chances are, you may get as annoyed by bank fees as I do.

Added fees are a huge source of income for the banks. You give them your hard earned money, they turn around and lend it out at a higher interest rate than they pay you, then charge you a fee on top of it. A brilliant business model if you ask me.

However, there are a few ways to avoid bank fees.  As some of the points below may be obvious to some of you, they may trigger some new ideas on how to eliminate or reduce bank fees and save a few dollars.

Use a Free Bank

There are not many banks that will offer their chequing account services (with cheques) for free without any minimum balance, however, they are out there.  From my experience, the bank that comes to mind that offers essential chequing account services for free is PC Financial.  They offer unlimited transactions and cheques for free with no minimum balance.  The disadvantage is that PC Financial does not have any bank branches, so no tellers to help you face to face.  This may not be a disadvantage to some, but if you need a bank draft (like for a down payment on a house), you’d have to phone them first to have a draft ready a day later at a CIBC branch.  They have bank machines for deposits/withdrawals at various Loblaws grocery stores along with free access to CIBC ATMs.

Keep a Minimum Balance

If you are set on having an account with a “bricks and mortar” bank most, if not all, of the big banks offer chequing accounts for free providing that you keep a minimum balance.  Although some may think that keeping a minimum balance is a waste of capital allocation, it really depends on the fees.  For example, if the TD Select Service Account seems to add value to your banking habits, you’re looking at a $25/month fee unless you keep a minimum balance of $5,000.  Although $5k seems like a large amount of money to have sitting around, on an annual basis it represents a 6% return by having the monthly fee waived.

Note though that with some bank accounts, obtaining a book of cheques will have a fee even if you keep a minimum balance so make sure to read the fine print.  I have a bank account with CIBC which charges for cheques.  To get around this, I use my line of credit cheques which are free.  This works for me as both accounts are connected online and I can transfer money back and forth instantly.  With a little research, I’m sure most banks have little savings tricks.

Do Your Research Up Front

There is no one bank that is best for everyone as banking needs vary widely depending on the person.  Some require more Interac transactions, others cheques while some require currency exchange options.  The best bet to reduce fees is to figure out what exactly your needs are and do your own due diligence.

To give you a head start, here are some articles from the past on banking comparisons that may help:

Use One Bank

Generally speaking, the more business you do with one bank, the more you can save in fees.  For example, Royal Bank provides a multi-product discount.  As well, the more you use one particular account for your deposits, the easier it is to keep the minimum balance to avoid the fees.

What are your thoughts?  How do you get free banking?

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FT is the founder and editor of Million Dollar Journey (est. 2006). Through various financial strategies outlined on this site, he grew his net worth from $200,000 in 2006 to $1,000,000 by 2014. You can read more about him here.
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10 years ago


if NSF fees and overdraft fees are your issue then the problem is you not the banks.

11 years ago

F… err. Screw PC financial, their “No Fee” account is full of hidden fees, such as $40 NSF, Overdraft fees, Certified Check fees. If you dont write checks, then maybe they are OK, but if you write even a few checks a month, forget them! I even called to plead my case (the check was written to one of their own accounts, so they took $40 on both sides!)

I’m currently checking out ING Direct, I believe they have no NSF fees, that will save me at least $40 a year.

Link Wheels
11 years ago

Thanks for the info, I really do pay too many bank fees. I am in Australia and currently use Westpac. When I find time I will switch over to the Bendigo Bank. Anyone here from Australia that could offer any advice?

11 years ago

TDCanadaTrust offers to waive fees on some accounts when a senior citizen is one of the signatories on the account.

Sometime ago I went overseas for a short while and my parents offered to help me administer my mail and bills back in Canada. When we visited the bank to add my parent’s names to my chequing account the bank offered to cancel the fees. Since my parents and I all have excellent credit ratings this was a risk free way to eliminate fees.

Father of Five
11 years ago

I have a CIBC “Waive” Chequing Account, which waives all fees at month end if I maintain a balance of $1500. Based on my reading of this blog, looks like CIBC forgot about me because they never change my required balance limit. And I am not about to tell them. Each month I see them waiving about $40 in bank charges.

Canadian Freedom
11 years ago

The easiest way to avoid bank fees is to open a line of credit and use it like a bank account. There is nothing that says you cannot keep a positive balance, and the interest you give up is more than offset by bank fees. Another bonus: your “overdraft” rate just got a lot better since overdraft interest rates are generally high.

If you don’t want to take this option negotiate with your branch. They do have the power to waive fees.

Canadian Freedom
11 years ago

One of the easiest ways is to open a line of credit for everyday use and use it like a bank account. Your “overdraft” is cheaper (bank overdraft rates are killer) and there is nothing to say you cannot keep a positive balance in your account. Bank fees normally will eat up the pitiful interest you are giving up.

Another option is to negotiate with your branch as they do have the power to override bank fees.

11 years ago

Bank fees have gotten me in trouble more than once. A great suggestion to research before signing up for an account. Luckily my chequing account is free and I try to do most of my bill paying online so I can avoid going over the maximum number of free cheques you can write in a month.

11 years ago

Like @Danny, I also have the National Bank All In One (AIO) account. Mortgage at prime and all extra money in the account offset against the mortgage principle, effectively giving all my money interest at prime.

I have to pay to buy cheque books, but I only write about 10 cheques per year, so not a big deal.