Save $360 By Switching To A Bank Account With No Fees

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A quick way to find an extra hundred or so in savings is to switch to a bank account with no fees, or a bank with low monthly fees.

Sadly, most Canadians don’t make this choice. While many bank accounts charge between $9.95 and $14.95 per month, some bank fees can creep up to $22.95 or even $29.95 per month! Over a year you’ll spend $360!

Pay these fees between the ages of 18 and 65 and you will have spent almost $17,000 in bank fees (not including inflation or extras)!

If you’re looking for ways to cut costs consider switching to a bank account with no fees or, at least, find ways to cut fees.

To help, here are five simple ways to lower or completely avoid bank fees.

#1. Keep A Minimum Balance

A first step is to find out whether or not your current bank offers to waive fees if you maintain a minimum daily, weekly or monthly balance.

While not everyone likes the idea of keeping non-touch money in a bank account, it can be a great strategy for saving up and keeping an emergency fund. Only spend this money if you run into an unforeseen financial emergency, such as a job loss or an expensive house repair.

Good Minimum Balance Account Option

According to the Canada.ca, most large banking institutions in Canada have signed a public commitment to offer low-cost and no-cost accounts. To find a good option, check out their account finder tool or scan the list below.

#2. Switch To A No-Fee Bank Account

Canadians and Americans now have plenty of choices when it comes to selecting a no-fee bank account.

I’ve been a big fan of these accounts for decades—and have three (yes three!) no-fee bank accounts that are still in use.

The difference between an online-only bank, like EQ Bank, and a money account, like Koho, are the features.

Online-only banks provide the same accounts and features as regular brick-and-mortar banks, such as: chequing and savings accounts, as well as US savings accounts, credit cards, Tax-Free Savings Accounts and some even, offer access to personal loans, Home Equity Line of Credit and mortgages.

Similar to online bank accounts, money accounts provide online financial accounts that allow you to spend, save and even invest but these money accounts rarely offer the same standard features found in most bank accounts. For now, we’ll stick to the online bank accounts. If you want to read more on money accounts, and how they work, stay tuned.

To cut your banking fees switch to an online no-fee bank account.

Good No Fee Bank Account Options

Simplii (+ Cash Bonus Offer for New Clients)

Simplii Financial is one of the top Canadian online banks and, at the moment, new clients can earn $50 just for opening a new no-fee Simplii account.

Some of the biggest perks of becoming a Simplii client:

• No minimum balance is needed;
• No monthly fees;
• No transaction fees;
• Easily set up automatic deposits (such as payroll or Canada Revenue Agency tax refunds);
• Easily set up automatic bill payments.
• Free access to all CIBC ATMs across Canada.

To get the cash bonus of $50, use a refer a friend code.

EQ Bank (+ Cash Bonus Offer for New Clients)

The biggest benefits of becoming an EQ Bank account holder are:

• 1.50% interest for every customer with no separation between savings and chequing accounts
• No monthly fees
• Free Interac e-Transfers
• Free Electronic Funds Transfers (EFTs)
• Free bill payments
• Free EQ to EQ Transfers
• No minimum balance
• CDIC deposit insurance eligibility
• Multiple security layers and fraud monitoring
• Secure account linking
• Backed by Equitable Bank, a Tier 1 bank in Canada with over 50 years of experience
• No holds on deposited funds

If you open an account before June 15, 2022, you’ll snag a $150 cash bonus.

Even if you miss the June 15 promo deadline, you’ll still get $20 cash bonus if you open an EQ Bank account using a friend’s referral code (found here).

Tangerine (+ Cash Bonus Offer for New Clients)

Tangerine is the online bank that’s backed by Scotiabank. Right now, new clients get an automatic $50 cashback bonus but only if you open an account using a friend’s referral code. Need one? Use mine: 63789209S1

The main advantages of the Tangerine no-fee bank account are:

• No fees
• Great interest rates
• Helpful money management tools
• Simple mobile and online banking

To open a no-fee bank account at Tangerine, go here and use this Orange Key code: 63789209S1

#3. Pay for Overdraft Protection

Overdraft protection is an optional service that most banks and financial institutions offer on chequing accounts. The protection means that if funds are withdrawn from an account with insufficient funds, your bank will cover the shortfall until you repay the amount.

While it does cost you a fee to add this protective coverage, the service is typically much cheaper than the expensive Non-Sufficient Funds (NSF) fee you pay if a charge is made to your account and there aren’t enough funds in the account.

In most cases, overdraft protection will cost you $5 per month (or per transaction). Compared to NSF fees that are between $45 to $85 for each transaction and the $60 per year sounds reasonable.

But wait. There’s more.

There are also overdraft interest fees. On top of the overdraft fee, you’ll also be charged interest on the amount loaned to you. This interest ranges from 19% to 22% and is similar to credit card interest.

Of course, the best option is to not spend more than your account balance. Why? Because overdraft protection is basically a revolving loan—a line of credit you can use, if necessary, but it will cost you.

Good Accounts for Overdraft Protection

To help, here are the overdraft fees for most of the major banks in Canada.

#4. Consolidate For a Multi-Rebate

If you require a few different banking products—for instance, a chequing account, savings account and credit card—you could look for a bank that offers a multi-rebate.

A multi-rebate means you open multiple accounts with the same bank and pay your monthly fee, each month. As long as each of those multiple accounts is in good standing, you get the fee rebate back.

Good Option for Multi-Rebate Bank Accounts

RBC Value Program: You can save as much as $360 per year if you enroll in the RBC value program. Just be sure to keep your RBC accounts in good standing.

#5. Consolidate Accounts for Cheaper Fees

When more than one person in your household needs a bank account then a good option is to choose a bank with a family plan.

Family plans allow you to multiply the number of financial accounts with one bank—and give you access to cheaper (or no) fees on those accounts.

Good Option for Family Accounts

BMO Family Bundle: This account lets you and your loved ones enjoy no-fee daily banking with all the benefits and privacy of separate chequing accounts. If you are looking to cut costs in your household then paying only one monthly banking fee will help.

To save you need to open an account and select the option that works for your family.

• You + 1 Family Member: Save up to $16.95 per month
• You + 2 Family Members: Save up to $33.90 per month
• You + 3 or More Family Members: Save up to $50.85 per month

National Bank’s Joint Account

CIBC’s Joint Account

Scotiabank’s Joint Account

5 More Cost-Cutting Tips

Switching to a bank account with no fees is a great way to start saving money, but it’s not the only way. Here are five more tips to help:

Never Use Another Bank’s ATM Machine

Every time you use another bank’s ATM machine, you are charged a network access fee by your own bank of $1.50 plus a $1.50 fee by the bank that operates the machine. Those ubiquitous private cash machines at convenience stores charge even more.

Make Fewer Withdrawals

Instead of withdrawing $20 from an ATM three times a week, take out $60 once a week. While some accounts offer unlimited withdrawals others cap these transactions and charge a fee if you go over the limit. To cut costs, cut down the number of withdrawals.

Pay Bills Online or Over the Phone

Most banks will offer free or a set number of online or over-the-phone bill payments, but charge you a per transaction fee for in-branch bill payments.

Get Cashback When Paying with Debit

Many stores allow you to add in extra money for cashback when paying with your debit card. If you know you need cash, ask the cashier for cashback. Not only will this help you avoid an ATM service fee if you can’t find your home branch ATM but it will also reduce the total number of transactions you make.

Skip the Insurance

If you have sufficient whole or term life insurance coverage then it’s not necessary to have insurance on any of your accounts. Check your paperwork and be sure to cancel account protection.