How to Save on Chequing Account Fees

A dollar here, $2.50 there… if you aren’t paying attention, it’s easy for monthly banking fees to add up. Canadian households pay an average of $227 a year in service charges to financial institutions, according to Statistics Canada—that’s hard-earned money you could be holding onto. Whether you’re opening your very first chequing account or re-evaluating your current one, there are several ways squeeze more value out of your account.

Choose the right chequing account

The “best” chequing account is the one tailored to fit your habits and needs. Before you start comparing chequing account features, ask yourself the following questions:

• What kind of transactions do you make regularly? (Cash withdrawals, debit card purchases, bill payments, email money transfers, pre-authorized debits)
• How you want to access the money in your account? (Bank branch, ABMs, online/mobile banking)
• How many transactions do you make in a month?

For example, if you regularly pay for purchases using your debit card and frequently take out cash from ABMs, you should look for an account with unlimited transactions per month. The account’s monthly fee might be slightly higher, but it’ll pay off in the long run because you won’t be dinged with a fee for every transaction that runs over your prescribed monthly limit.

If you’ve had the same chequing account for a while, it’s a good idea to review your account’s features and evaluate whether your banking needs have changed. Take the time to map out and understand your banking behaviour, then choose the account that best meets your needs.

Stick to your own ATMs

One easy way to avoid excess fees is by always using your own bank’s ATMs. It might not be the closest one to your home or work, but convenience will cost you: Using another bank’s ATM will result in charges between $1-4 from both the other bank and your bank—that fee can climb to $5 for white label (privately owned) ATMs found in public places like malls, bars, casinos and movie theatres. If you can’t get to one of your bank’s ATMs, you can ask for cash back when shopping at a retail store with your debit card—most grocery and liquor stores offer this.

If ATM fees rank among your biggest concerns, consider switching to a bank with a large network of branches and ATMs close to where you live and/or work.

Maintain a minimum monthly balance

Some financial institutions will waive your monthly fee if you keep a certain amount in your account at all times (for example, $2,000). However, this is easier said than done. If this isn’t a reasonable option for you, look for a no-fee chequing account without a minimum balance requirement.

Avoid transactional fees

Complete all your own personal banking and avoid in-branch transactions (i.e. going to the teller) as much as possible, as they will count against your monthly limit. Completing transactions via online, mobile or telephone banking is often free, or at least significantly cheaper in fees. Besides saving on fees, knowing how to complete transactions yourself is useful and empowering. While you’re at it, cancel your monthly mailed bill and go paperless, which will save you $2-4 a month.

Avoid overdraft and bounced cheque fees

Banks offer overdraft protection plans that allow account holders to make purchases with their debit card or write cheques from their bank account even if their balance is zero. Basically, the bank gives you a short-term loan so you won’t be rejected at the ATM or checkout for having insufficient funds. However, overdraft fees are among the steepest: you could be charged $10-$35 per transaction, although some providers may charge by the day regardless of how many transactions are made.

It’s better to use overdraft protection sparingly, but it’s best to avoid overdrawing your account all together by keeping close tabs on your balance and transferring money from a savings account or credit card if you think you’re going to come up short.

Once you’ve analyzed your spending habits, you’ll be better equipped to compare chequing account features and choose the best one for your needs. Banking will never be completely free, but with a little diligence you can cut down on costs.