Bank fees are a fact of life. Canadian households spent an average of $216 each in bank service charges in 2015, according to Statistics Canada. If you already have a chequing account or plan on opening one, you don’t always have to pay to have an account.
Here are some ways you can avoid paying unnecessary chequing account fees:
1. Keep a minimum balance
Most financial institutions charge a monthly fee for their chequing accounts. But you can avoid this fee if you maintain a certain minimum balance. However, the minimum balance can be thousands of dollars. If that’s too high, you should choose a bank that doesn’t charge a monthly fee.
2. Choose a digital bank
An online bank can provide you with most of the services a regular bank provides but without all the extra costs. Usually, you’ll get a chequing account with an unlimited number of transactions for free. The two largest digital banks, PC Financial and Tangerine are also the most well known. Some credit unions also offer free chequing accounts.
3. Look for a deal
If you’re in a certain age group, you can get some or all of your regular account fees waived. Children and students enrolled in a post-secondary institution will usually get their monthly chequing account fee waived. And seniors will usually get a discount or can bank for free, depending on the number of services they require.
4. Use your bank’s ATM
When you withdraw money from a different bank’s ATM, you get charged a fee. Most banks charge a fee of $2. If you withdraw $20, $2 is equal to a 10% fee. Do that a few times a month and it begins to add up.
If you plan on making many ATM withdrawals, choose a financial institution that has a large branch network and ATMs close to your home and workplace. PC Financial gives you access to CIBC ATMs and Tangerine clients can use Scotiabank ATMs for free. Some credit unions are part of national ATM networks and provide you with surcharge-free access to their ATMs.
5. Use credit instead of debit
If you have a limited number of debit transactions per month, you risk being charged when you go over that limit. And if the balance in your account is low, you could be charged a non-sufficient funds (NSF) fee. While you could opt for overdraft protection, there’s often a monthly cost involved plus you need to pay interest. And if you’re trying to avoid service charges, you don’t want to pay for spending more than you have.
Using a no-fee credit card can help you avoid those fees. Although using credit might seem like something you shouldn’t do, you can save unnecessary fees if you use your credit card responsibly and pay off your balance in full.
The bottom line
Having a chequing account can be costly. But if you shop around and use the tips above, you can avoid paying many common service charges. Use a chequing account comparison tool to help you find an account that suits your needs.