Chequing account fees are expensive. In Canada, some premium accounts cost as much as $30 every month – that’s $360 every year. And even though those high-end options come with all the bells and whistles you would ever need in a bank account, the monthly cost of having a chequing account can really sting.
Looking for a chequing account?
Fortunately, it’s possible to get your chequing account fee waived at most of the big banks in Canada. Here’s how:
Keep a minimum deposit
Many of the big banks will waive your monthly chequing account fee on the condition that you keep a minimum balance in your chequing account.
For example, the TD All-Inclusive Banking Plan has a $29.95 monthly fee that’s waived as long as you have $5,000 in your account at the end of each day in the month.
The Scotia One Chequing Account is normally $13.95 per month, but the fee is waived when you keep a $4,000 minimum daily balance.
BMO and National Bank also offer similar schemes.
Unfortunately, these minimum balance schemes have serious drawbacks. The requirement is that your daily closing balance be over the minimum – be a dollar short on one day of the month, and that’s going to cost you.
There’s also a significant opportunity cost to keeping your money in a chequing account. Since most chequing accounts pay little or no interest, you could potentially earn more money by investing that money than you would save by keeping a minimum balance.
For example, keeping $4,000 in a Scotia One Chequing Account will save you $167 per year in fees. But the same money invested with a return of 5% would earn $200 per year.
Most banks have raised the bar for minimum deposits over the last few years, and you’re not alone if you don’t have thousands of dollars to keep parked in your chequing account.
Bundle your banking products
Some banks, rather than requiring a minimum balance, will instead waive your monthly chequing account fee in exchange for having multiple products. This kind of program is similar to the savings you can get for bundling your internet, cable and phone services.
RBC No Limit Banking, for example, carries a monthly fee of $10.95 which can be waived if you also have an active credit card, investment, and mortgage with the bank.
That’s a big ask for a savings of $131 per year – especially the mortgage requirement. RBC’s posted discount rate for a 5-year fixed mortgage is currently 3.74%, but the best mortgage rate in the market is 3.14%. With a balance of $500,000, you would pay up to $14,229 more in interest over the life if a mortgage by choosing RBC over a more competitive lender. That’s not a good deal.
If it happens that you’re able to get the best deal on multiple products from the same bank, you should definitely take advantage of any bundles being offered. But being a loyal chequing customer won’t get you preferential treatment when it comes to negotiating a mortgage and the vast majority of Canadians will find better deals by refusing to stay loyal to any one bank.
Go no fee
The best way to get your monthly chequing account fee waived might just be to opt for a chequing account that doesn’t charge a monthly fee in the first place.
There are several options for no-fee banking in Canada. If you prefer to work with major banks, Simplii Financial (a subsidiary of CIBC) and Tangerine (a subsidiary of Scotiabank) offer accounts with no monthly fees and unlimited transactions.
If you’re comfortable with smaller financial institutions, Alterna Bank offers a no-fee chequing account available across Canada. Regionally, some larger credit unions like Vancity in BC and DUCA in Ontario offer free chequing options.
Choosing no-fee banking may mean making some compromises, however. For example, you may not be able to use the services of a teller. And there may be fees charged for some things that are included in premium paid chequing accounts like bank drafts and Interac e-transfers.
But if your day-to-day banking primarily consists of basic transactions (like bill payments, deposits, and debit purchases) and you’re comfortable with online banking, a no-fee chequing account will probably cover your needs for a far lower cost than a chequing account with a monthly fee.
Ask for it
As the adage goes, you don’t get what you don’t ask for.
It may be possible to get the results you want just by asking. If none of these options are appealing to you, try calling your bank and asking them to give you a better deal. You may have to threaten (or actually try) closing your account to get a retention discount, so you’ll need to be prepared to leave your bank if you don’t get what you want.
Stop paying chequing account fees
Even if you don’t want to bundle and can’t afford a minimum balance, you can still get a chequing account with all the features you need for no monthly fee. If you’re ready to switch banks for a better deal, compare chequing accounts online to find out which account is best for you.