10 Ways to Eliminate Banking Fees in Canada

Posted On 11 January 2022

Last updated on April 7th, 2024

The goal is to lower the cost of banking in Canada to as close to free as possible. Before I go too far, I must admit that everything has a cost. Sometimes the cost is in dollars, sometimes the cost is in less convenience or it requires effort on your part.

When we first moved to Canada from the United States, I was amazed that there were no free chequing accounts to be found! There were transaction limits on accounts. It was amazingly different from banking in the US.

I could complain about the cost of banking, which would do nothing, or I could figure out how to beat them at their own game. Here is a list of ways I found to eliminate banking fees in Canada.

1. Compare Banks

The first thing to do is to compare the different banks. Over the years I have found that banks are not created equally. Under “Resources” in the Main Menu, I have a list of the best accounts at the big banks in Canada. We need to have an idea of how we are planning on using the account.

Once we know how we want to use the account(s), we can then start comparing what the different banks offer. There are regional banks and credit unions that may offer an excellent deal for you. You never know until you look.

2. Use Banking App / Online

In Canada, “bankers’ hours” are a real thing! Then, the hours got even shorter during this pandemic. Technology to the rescue! With the availability of mobile banking apps and online banking, we can do a lot of our banking without going into the bank, and on our own time.

Some banks don’t count electronic transactions toward your monthly transaction limit. That is a definite plus in eliminating fees.

3. Use an Online Bank

For those of you that find you do most of your banking online, on your phone, or at an ATM, opening an online bank account is a great way to have free banking. You can check out my page (under Resources in the Main Menu) about online banks to learn more about the best accounts they have to offer.

It is true that these online banks have free chequing accounts. There is a cost, though. If you want to walk into a bank and deal with someone face-to-face, you’re out of luck. Tangerine had a handful of “cafes” across the country, but they closed them when the lock-downs went into effect.

When I get paid in cash, I will deposit the money in a local branch, then I can send that money to my online bank. Yes, there is an extra step. The important part is that the money gets to where it needs to go and it doesn’t cost me anything extra.

4. Youth or Students

Most banks offer youth or student accounts. These accounts do not have a monthly fee. I would recommend that anyone who qualifies should take advantage of these accounts. Youth accounts can be set up for your children so you can teach them about banking.

I made a note of our kids bank account numbers so I would be able to help them with their accounts. Even though the accounts have to be joint with the parents, we always treated these accounts as the kids, not ours. They are the only ones who can spend the money in their account.

5. Seniors

While on the topic of age, most banks offer a senior discount. If you don’t see anything about it, ask! Should your bank not offer a senior discount when you are of the age to get the discount, I would consider working with another bank.

Now, you don’t have to switch banks. You don’t have to do anything I suggest. If your monthly fee is already being waived, just carry on with your current bank.

6. Meet the Minimum

The most consistent way to get your monthly fees waived is by having a minimum in your account. Most of the accounts I have seen here in Canada will waive the monthly account fee as long as a minimum amount is in the account at all times.

This minimum balance can be your emergency fund – something you don’t want to use because it will cost you, yet money that is readily available to you. Using these funds will cost you, but not as much as the interest on a credit card might cost.

7. Accounts that Meet Your Needs

Like with a cellphone plan, it is less expensive to pay a bit more per month and avoid paying the additional fees. At the same time, don’t go with the most expensive plan “just to be safe”.

Situations change over time. When we started banking in Canada, e-Transfers did not exist! Accounts at the time did not include these transactions. We have had to change our account type periodically in order to get a better deal as our situation has changed.

8. Multiple Banks

Many of the accounts that have lower monthly fees usually have monthly transaction limits. A creative way around these limits is to bank with multiple banks. Some of your monthly transactions can be carried out with one bank, and the rest of your transactions with the other bank.

Multiple banks can also be a convenient way to put money aside, so you are not tempted to spend it. This can also be an account that you use primarily for self-employment if that applies to you.

A note of caution about using multiple banks. If you are paying monthly fees at several banks, it can cost you too much. Another caution is if you are an American and you have more than $10,000 in your Canadian accounts at any one time, you need to file an FBAR with the American government declaring your foreign accounts.

9. Use Your Credit Card

Since most bank accounts have transaction limits, use your credit card for purchases so that each purchase doesn’t count towards your monthly transaction limit. This is an easy way to get around these limits.

It is safer for you to make purchases with a credit card than it is with a debit card. I wrote about that in this post. Some credit cards will even extend the warranty on products you purchase with the card.

An additional benefit to using a credit card for your purchases is that you can earn cashback or rewards. Not only do you reduce your number of transactions, you can get paid to do this!

10. Interact e-Transfers

Interact e-Transfers are such a convenient way to send money from one person to another in this country. The exact amount can be sent. Some accounts don’t even count e-Transfers in your monthly transactions!

These e-transfers are even an excellent way to get paid by customers. I prefer customers to pay me this way. It is fast and efficient. There is also no change that needs to be given back to the customer.

Banking Can Be Free!

I hope that these strategies help you eliminate your banking fees. Free banking is something that exists in Canada, although it does take some work on your part.