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.
A bank account is a product where you can store your money safely and conduct transactions including withdrawals, bill payments, money transfers, and more.
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.
For a more extensive list of low-cost or no-cost accounts offered in Canada, visit the Government of Canada website.
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.
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.
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.
Open a new Simplii No-Fee Chequing Account and earn $350*. Set up a minimum of 3 eligible direct deposits. Limits apply offer ends March 31, 2023.
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.
*Interest is paid monthly and calculated daily on the total closing balance. Rates are subject to change without notice
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.
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.
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.
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.
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Priyanka Correia is a Marketing Coordinator and personal finance expert at Loans Canada. Priyanka completed her Bachelor's degree in Marketing at Concordia University and has published work that has been mentioned in various news media. She is passionate about money management and educating Canadian consumers about how to take control of their financial lives.
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