Use your savings to avoid bank fees

I’ve seen enough bank statements to know just how dopey people can be about what they’ll pay in bank fees. Some folks pay more than they need to because they insist on sticking with an account they’ve had since Betty White was in diapers.



Online only.


Others insist on using their bank accounts like wallets, indiscriminately pulling money from whichever ATM is at hand, and paying $3 on a $20 withdrawal. Stupid! If you’re tired of paying through the nose for bank fees, you can shop around for a no fee account or you can be smart about how you manage your bank balance to eliminate your fees entirely.

This is where your savings can save you money. Some chequing accounts give you all your transactions for free when you maintain a minimum monthly balance of, say, $1,000. So if you take $1,000 from your emergency fund and stick it in your chequing account, it can do double duty: it’ll be there when the caca hits the fan and, in the meantime, it’ll help you to save on bank fees.

The trick, of course, is to never touch the $1,000. It’s a float that doesn’t really exist in terms of what you have to spend. This is where the “smart” comes in. You have to be disciplined enough not to spend that money. If you’re keeping a spending journal – you are keeping a spending journal, right? – then you’d simply never count the $1,000 at the bottom of your cash pool. Since you don’t have it in your “balance” you can’t see it to spend it.

If you’re living with a partner who is not as disciplined as you and you want this to work, you need to make it very clear that the last $1,000 in the account is UNTOUCHABLE. There can’t be any wavering on this issue. If the $1,000 is eroded at all and you have to top it up with more money from your emergency fund, your emergency fund will have sprung a leak and it’s only a matter of time before it’s all gone, never mind the bank fees you’ll incur while the balance is below $1,000.

But if you have the discipline and the self-control to leave that money sitting in your account to save on bank charges, it could be worth between $120 and $350 in bank fees saved. At the bottom-end of the savings scale that’s a 12% return on your money… tax free!

68 comments on “Use your savings to avoid bank fees

  1. Yay more Gail-blog! *grin*

    We just started taking advantage of this. TD's Infinity Account has a minimum balance of $3,000.00 to get your fees waived. What I love is that even though we didn't get this done until January 4th, they forgave us the three days of having our balance below the limit and didn't charge us. That means that this year we'll save $144 on the fees from that account, and if you include the fact that we took Overdraft Protection off it's up to $180/yr in savings. It doesn't seem like much, but stopping a bunch of little leaks like that is what saving is all about!

    • Hi Jenna, something you may want to consider is the "opportunity cost" of having your $3000 tied up in your bank account.

      If you are unfamiliar with the term, I'm simply talking about what else your money could be doing rather than earning 0.0% paid by TD.

      If instead you took that money and placed it in a very basic index fund, you could probably look at earning a relatively conservative 6% over the long haul which works out to $180/year.

      From this perspective, having your $3000 in the bank account can actually ends up costing you$180/year over simply using a no fee bank account like PC Financial (who incidentally also don't charge you $3/month flat fee to have the option to use overdraft! TD should be ashamed!)

      Even with your $144 in bank fee "savings" from TD, you still end up out of pocket $28.50/year as a result of the lost opportunity to otherwise invest your money.

      I know this might sound crazy, but numbers don't lie. In another post down below, I see another woman who keeps $5000 in her account. Without realizing it, this is costing her $300/year to get "free" banking services.

      I'm not here to tell you that you are right or wrong, there are many reasons you may choose to maintain your account with TD, I just wanted to highlight for your consideration that it's worth considering the opportunity cost of parking all this money just to save on "fees" that the greedy bank shouldn't be charging you in the first place.

      My two cents.

  2. PC Financial and ING Direct both have no-fee chequing accounts. Might be a good place for everyone to check out if considering a move from another bank.

    • Hi Gene,
      I am actually using PC Financial right now and I am saving money because no charges on the chequing account. I even earn points for my grocery at Loblaws.

  3. I agree with gene – find a bank that doesn't charge fees! Or use a credit card for everything, then pay that off at the end of the month, instead of pulling out cash left and right until you have overdraft fees.

  4. I am sorry, but my PC Financial account has no fee and actually pays interest on my balance. Small but higher than the average Tier 1 bank basic savings account. Waiving your fee if you keep a balance is just a way for the banks to make money by increasing their cash on hand. You will get better service and lower fees with ING, PC Financial or local credit unions.

    I met with a Scotiabank rep last week who was trying to sell me a banking package and her words were: "These guys they are our real competition. How can we make money?"

  5. Totally agreed–no fee banking is the way to go. TD has my mortgage and all of my investments, but they still won't waive my fees on debit and transfer transactions–they actually charge me to put pre-payments on my mortgage!!! Infuriating. Am going to try and switch to a non-fee, but I think it might get tricky with my mortgage payments. Does anyone know, can I have my mortgage attached to a chequing account at a different institution? Obviously a question for the PC/Ally/ING's, will have to get on that….

  6. Hey Jennifer,
    I can certainly empathize! My mortgage is also with TD and I also refuse to pay for the privilege of banking. So, to answer your question, it is absolutely possible to set-up automatic payments from a PC bank account (what I use) against your TD mortgage. I am sure the same is true with Ally or ING. Like all other bills you will need to set up transit, branch and account numbers. Also, you may have to go into a branch to actually start the process–I believe that's what I had to do. Your TD branch customer service rep/mortgage advisor should be able to help.

  7. I'm with TD and have their top-tier account with all account, safety deposit box, certified cheques, money conversions, and my and my wife's credit card fees all waived with a minimum $5000 balance. Love it.

  8. CIBC has an 'Everyday' checking acct. that will even pay an annual $100 bonus if you also carry a personal Visa card and CIBC savings acct. No fees up to 25 trans. Im looking at switching and saving. My partner is now 60 (and I always get to tease him about being older than me!) and has no problem putting aside his ego and is signing up for the CIBC seniors checking acct. As he said it could equal over $600 per year. If someone handed that much to you every year would you turn it down?

  9. Just consolidate all of your expense transactions on your credit card. And pay it off.

  10. anyone who stays at a financial instituion that charges fees has way too much money. There are numerous alternatives such as PC Coast Capitol credit union to name a couple. The Big 5 have QUARTERLY earnings of over 5 billion (yes with a B) dollars and yet they deem it necessary to charge $5, $10 up to $50 dollars a month to their customers. Ask yourselves how much would you pay Sears or Safeway to shop at their stores??

  11. This is very intresting, You are a very skilled blogger. I have joined your feed and look forward to seeking more of your great post.

  12. It was really inspiring I loved it, thanks a ton to bring me back and more closer to my real self and my family.

  13. I need to many thanks for the endeavours you have obtained contributed in composing this blogpost. i am hoping the identical top-quality publish from you from the lasting as well. In simple fact your soil breaking composing skills has inspired me to start my very own web page now. in real truth the blogging and site-building is spreading its wings rapidly. Your create up may likely be considered a very good design of it.

  14. Pingback: Check out my FB profile

  15. Pingback: Toasty Redhead

  16. Pingback: Black Friday

  17. Pingback: Sweaters On Sale

  18. Pingback: Spine Institution

  19. Pingback: natural hair color

  20. Pingback: How to Remove Tonsil Stones at Home

  21. Pingback: Event Tickets

  22. Pingback: Drug Treatment

  23. Pingback: Frye Paige

  24. Pingback: The Kitchen Cookware

  25. Pingback: Thewaterkettle

  26. Pingback: Water kettles

  27. Pingback: Acne Skin Care Product

  28. Pingback: Gold Party

  29. Pingback: Air Conditioner Filters

  30. Pingback: internet search engine optimization

  31. Pingback: Ile Maurice Location

  32. Pingback: Proxy Service

  33. Pingback: Premium Outlet Mall

  34. Pingback: Mauritius Villas

  35. Pingback: Acai Berry scams

  36. Pingback: Location Villa Ile Maurice

  37. Pingback: Simply Ear Plugs

  38. Pingback: vinyl windows atlanta

  39. Pingback: Prostate

  40. Pingback: How to make money online

  41. Pingback: Online Paralegal Courses

  42. Pingback: Wholesale Electronics

  43. Pingback: Wooden Doghouse

  44. Pingback: make money online

  45. Pingback: austin roofing company

  46. Pingback: benidorm hotels

  47. Pingback: Associate Degrees Online

  48. Pingback: travel discounts online

  49. Pingback: how to make money from the internet

  50. Pingback: roofing contractors kansas city

  51. Wonderful paintings! This is the kind of info that are supposed to be shared around the internet. Disgrace on search engines for now not positioning this post upper! Come on over and visit my website . Thank you =)

  52. Pingback: montserrat island caribbean

  53. Pingback: roofing los angeles

  54. Pingback: roofers atlanta

  55. Pingback: replacement windows houston tx

  56. Pingback: Location Vacances Ile Maurice

  57. Pingback: Online Dating Sites

  58. Pingback: Whole Life Insurance Rates

  59. Pingback: Self Catering Mauritius

  60. Pingback: Computer Coupons

  61. Pingback: marietta bathroom remodeling

  62. Pingback: Camera Coupons

  63. Pingback: Cheap Car Insurance Quotes Online

  64. Pingback: roofing contractor austin

  65. Pingback: san antonio roofers

  66. Pingback: Credit Card Consolidation Loans