Chequing account monthly fees
The most common chequing account fee you’ll encounter is the monthly fee, sometimes called a maintenance fee. This fee is paid to the financial institution you opened the account with simply to keep it open and running and covers a certain number of transactions per month. If you go over this number, you’ll be charged for each additional transaction.
Monthly fees vary widely based on an account’s features, so it’s very important to compare chequing accounts to find the one that best suits your banking needs. Fees typically range from $3.95-14.95 per month and are generally proportional to the number of services covered: some accounts may charge a lower fee, but allow fewer monthly transactions. There are also chequing accounts that have no monthly fee and unlimited chequing accounts that cost upwards of $30 a month.
Depending on your financial situation, paying a couple dollars a month in fees may not seem like a big deal—a $4.95 monthly fee roughly equals the cost of a latte, for example. But fees can really add up over the course of a year, and in particular can substantially ravage accounts with low balances. That monthly $4.95 fee will cost you $59.40 per year, a $12.95 fee will cost you $155.40 per year, and a $30 fee will cost you a whopping $360 per year. If you don’t earn a lot of money and your chequing account consistently has a low balance, you literally can’t afford to be apathetic about monthly fees.
When does it make sense to pay a higher monthly fee
Additional transactions over your monthly limit typically cost $1-$1.50 a piece, so if you make a lot of transactions per month—paying for purchases with your debit card, taking out cash from ATMs, making email money transfers—it might be better to shell out for an account with a slightly higher fee that covers more monthly transactions. It may seem painful to pay a higher fee up front every month, but you’ll save money in the long run by not racking up fees on additional charges.
How to save on monthly fees
The best way to save on monthly chequing account fees is to sign up for a no-fee chequing account. These accounts don’t charge a monthly fee and usually include unlimited basic transactions. However, they often charge for other services that are included free in premium bank accounts. Before you select an account, think carefully about what transactions you normally perform and whether you would end up paying more for them by using an account that charges per transaction.
If you’re set on sticking with a bank that charges monthly fees, some providers will waive the monthly fee if you keep and maintain a certain daily minimum balance in your account. The amount is completely at the discretion of the bank and can range from a couple hundred dollars to $2,000, $5,000, or more, depending on the type of account.
Some groups have the chance to dodge monthly fees all together—most financial institutions also offer low or no fee accounts to children and teenagers, post-secondary students, and seniors.
Finally, some banks offer multi-product discounts (also known as bundling) that allow you to save on your monthly chequing account fees in exchange for signing up for other products offered by the bank.
The monthly fee is one consideration when choosing a chequing account, but it’s arguably one of the most important—you want your monthly fee to work for you, not the other way around. When shopping around for a chequing account, be realistic about the number of transactions you make each month and compare account features to save yourself from being gouged by fees.