In Canada, common bank accounts range in all sorts of prices. Some, such as all-inclusive accounts, cost more than others but come with added benefits like free safety deposit boxes, cheques, and unlimited transactions. With some account packages, you might even gain access to free rewards points credit cards that normally cost upwards of $100 a year. However, you’ll obviously need to pay up for them. In fact, Canadian banking fees have risen steadily within the last few years and a lot of people aren’t happy about it.
So, if you think you’re paying too much for your current bank account, or you’re just interested in knowing how to get a cheaper, possibly free one, keep reading.
What Is A Bank Account?
A bank account is a product where you can store your money safely and conduct transactions including withdrawals, bill payments, money transfers, and more.
What’s Considered A Low Cost Or Free Bank Account?
Generally, bank accounts with a fee of $4 a month or lower are considered to be low-cost. These accounts can usually be accessed for free if you fall under the senior, student or youth category.
Things To Consider When Choosing A Bank Account
- Does It Offer Interest – Many online banks offer hybrid bank accounts. It lets you earn interest on your balance like a savings account but also gives you the freedom to make transactions, pay bills and make withdrawals like a chequing account.
- Overdraft Options – If you’re likely to go into overdraft, it’s best to look for accounts that included overdraft protection.
- Atm/Withdrawl Fees – Many low-cost and free bank accounts come with limited transactions. If you go over the limit you’ll usually be charged a fee for each extra transaction you make.
- Monthly Fee And Available Features – Most bank accounts have a monthly fee. While some can be as low as $4, others can go as high as $30 or more a month. Some banks also offer free bank accounts, however, they often have limited transactions and features.
- Minimum Balance Requirements – Many bank accounts have a minimum balance requirement. If your account goes below the minimum balance, you’ll be charged a fee, which is usually equal to the monthly account fee.
- Welcome Bonus – Before opening an account, find out if any banks are offering a welcome bonus. Some offer new clients a cash bonus when they open an account while others may offer cash back on your purchases or interest on your balance.
For a more extensive list of low-cost or no-cost accounts offered in Canada, visit the Government of Canada website.
Banking Institutions That Offer Free Accounts
As we mentioned, there are certain cases where a customer at one of the major Canadian banking institutions will be eligible for no-fee banking. However, unless you’re a student, a minor, or are receiving one of the above benefits, you’re not likely to qualify for a no-fee traditional chequing or savings account from most of the big-name banks. So, if you are the average Canadian and are looking to get free banking, there are places where you can find such services. Most of these operations are based online and are becoming an increasingly popular alternative to traditional banking.
Simplii No-Fee Chequing Account
Simplii Financial is another popular online bank that offers a no-fee chequing account. As the digital extension of CIBC, Simplii™ offers a wide variety of services and products to Canadians looking for affordable and convenient banking solutions. Clients of Simplii will receive free daily banking with their No-Fee Chequing Account. Whether you’re new to Canada, a young adult, or simply want something that fits into your budget, Simplii Financial is a great option to consider.
What Does The Simplii No-Fee Chequing Account Offer?
- No monthly fees
- Up to $400 welcome bonus
- Earn up to 0.10% interest on your balance
- Unlimited debit purchases
- Unlimited bill payments
- Unlimited withdrawals
- Unlimited Interac e-Transfers
- Overdraft protection
- A fixed rate of 19% will be applied as well as a monthly fee
- Direct payroll and pension deposit
Neo Money™ account
The Neo Money™ account combines the benefits of a chequing and savings account. You can also use the account to earn rewards and interest all without any monthly fees. Right now, you can earn a hefty 2.25% on your account balance, which is much higher than the average savings account.
Sign Up Bonus
Open a Neo Money™ account today and receive a $5 bonus.1
What Does The Neo Money™ account Offer?
- No monthly fees
- No minimum deposit or balance
- Earn 2.25% interest on every dollar
- Earn unlimited cash back rewards
- Comes with the Neo Money™ card
- Earn 2.25x interest
- No credit check needed (it’s not a credit card!)
- Get up to 15% cashback on your first-time purchases at over 10,000 Neo partners
- Enjoy an average of 5% cashback
- Track all transactions and account balance on the Neo app
- Free daily transactions
- Set up automatic savings with the Auto-Save feature
KOHO Easy Plan Account
The KOHO account combines the features of a chequing and savings account. Not only can you earn interest on your account deposits, but you can also earn up to 2% cash back rewards on things like groceries, bills, services, and eateries. You can also use your KOBO account to build your credit history (for an added fee).
What Does The KOHO Easy Plan Account Offer?
- No annual or monthly fee
- Earn 1% cash back on groceries and transportation (gas, parking, rideshare apps, etc.)
- Up to 5% extra cash back with select KOHO partners
- Earn 0.5% interest on account balances
- Free e-transfers
- No NSF fees
- Access to Credit Building service ($10/month)
Tangerine
While Tangerine does charge its clients for some general banking services, such as additional cheques (the first booklet of 50 cheques is free, but any subsequent are $20 per booklet), non-sufficient funds and negative balances, with their No-Fee Daily Chequing Account, you won’t be charged for any transactions or debit purchases you make. They also offer other traditional banking products, such as mortgages, savings accounts and mutual funds. Like any normal bank, customers will also be given a personalized debit card.
What Does Tangerine’s No-Fee Daily Chequing Account Offer?
- No monthly fee
- No minimum balance required
- Unlimited transactions
- Free Interac e-Transfers
- Overdraft protection
EQ Bank
EQ Bank is a trademark of Equitable Bank. While they have offices located in Toronto, Calgary, Montreal, Halifax, and Vancouver, EQ Bank is an online-only bank (no physical branches or locations for customers). They offer a number of personal banking services including the EQ Bank Savings Plus Account.
What Does EQ Bank’s Savings Plus Account Offer?
- Earn 1.50*% interest on your balance
- No monthly fees
- Free bills payments
- Free Interac e-Transfer® and electronic funds transfer
- No minimum balance requirement
- Deposits are insured under CDIC
- Free mobile cheque deposit
- Affordable international money transfers
*Interest is paid monthly and calculated daily on the total closing balance. Rates are subject to change without notice
Motusbank Chequing Account
Motusbank is an online-only bank in Canada owned by Meridian Credit Union. You can access a wide range of banking products, including a no-fee chequing account to handle all your daily banking needs.
What Does The Motusbank Chequing Account Offer?
- No Monthly fees
- No minimum balance required
- Unlimited Interac e-Transfers
- Unlimited bills payments
- Unlimited debit purchases
- Unlimited withdrawals
- Earn 0.15% interest on every $1
- First 25 cheques are free
Credit Unions
A credit union is similar to a bank, in that its clients are able to open chequing and savings accounts, as well as access other kinds of financial products. Where credit unions differ from traditional banking institutions is how their profit margin works. Where a bank earns a profit from their customers paying for their services, credit unions are nonprofit cooperative organizations, owned and operated by the members themselves, rather than by stockholders. The profits they do make are gradually returned to their members through lower lending rates, more reasonable banking fees, etc. When it comes to chequing and savings packages, some credit unions, such as Conexus and Coast Capital do offer no-fee accounts. Another appealing incentive is their high-interest savings accounts, which often have higher rates than the average bank. However, for most credit unions, potential members need to pay a certain fee for the membership itself. They also offer a less extensive variety of financial products and fewer locations.
No Banking Is 100% Free
It’s important to keep in mind is that no banking is completely free. Once again, all banks are businesses, whether they’re based out of physical locations or entirely online. While Tangerine’s chequing accounts are free, they do charge you $45 if you want to transfer your funds to another banking institution. Then again, like any bank, they’ll throw in some incentives to earn your business, such as a $25 signing bonus for opening a new account. You also don’t have to keep all your money in one place. While one bank might offer better rates for their accounts, another might offer better rates for lending. This means you could store your money in one bank and secure a mortgage through another. In the end, every bank or credit union comes with benefits and drawbacks, so be sure to shop around before making your decision.
Maintaining A Minimum Balance To Save Money
As we mentioned earlier, many chequing accounts come with an option to maintain a minimum monthly balance in order to have fees waived. Keeping this up is a good way to promote healthy spending habits. Not only will you be saving on banking fees by not spending the money in your account, but you’ll also be forcing yourself to save more in general.
Bank Account FAQs
Which banks offer free bank accounts?
What do I need to open a bank account?
Are there any banking discounts?
Can I ask my bank to lower my bank account fees?
Bottom Line
The type of bank account you should get depends on your own financial situation and what you consider to be cheap or convenient. While some people don’t wish to pay anything for their banking needs and have no issue doing their business completely online, others prefer to visit their local branch and deal with things in person. Either way, if you’re about to open a new account or are thinking about switching to a cheaper one, be sure to research all your available options.
*Interest is calculated daily on the total closing balance and paid monthly. Rates are per annum and subject to change without notice.
