Whenever banks raise fees—and really, how often do you read news of a bank lowering its fees?—Canadians get upset. Understandably so. The Big Six banks rake in a lot of cash in this country.
So when the media recently reported that nearly all of the big banks had raised personal banking fees in the past year, despite raking in record profits, well you can imagine how many of the comments were positive. (“You go, TD!” said no one.)
Some of the recent fee hikes included:
TD: Fees for non-TD ATMs rose 50 cents to $2 on March 1; introduced a fee of $75 to transfer a tax-free savings account to another bank.
CIBC: Raised the minimum balance to qualify for no-fee banking from $1,000 to $2,000 on April 1; also raised transaction fees for its Everyday Chequing Account.
National Bank: In June, it raised some banking service fees by 25 cents.
RBC: In mid-2015, it proposed a new fee structure that would potentially apply a transactional charge to customers who paid their credit card bills and mortgages through the bank. (They scrapped the fee before it began, after public backlash.)
Considering that TD announced it had made a second-quarter profit of $2.05 billion last month, up from $1.86 billion for the same quarter last year, well, sure, go ahead and get angry. After all, many Canadians are already paying anywhere from $10 to $30 a month in banking fees, which can be as much as $360 a year. Is there anything you can do about it?
Yeah there is! Here are three classic MoneySense tips (none of which require a mattress) to help you lower your banking costs:
1. Install a false bottom on your account
Some chequing accounts give you all your transactions for free when you maintain a minimum monthly balance. A $1,000 minimum used to be common, but many banks have raised the qualifying minimum to $2,000 or more. Find out what your bank requires and take that balance from your emergency fund and stick it in your chequing account where it can do double duty: It’ll be there when crap hits the fan and, as long as you leave it alone, it’ll help you to save on bank fees. The trick, of course, is to convince yourself that this monthly minimum float doesn’t exist. If you aren’t disciplined enough to not spend that money, don’t use this strategy.
2. Book a meeting at your local branch
Bank staff often has some discretion to waive or lower fees, for great clients of course. Book an appointment and begin by letting them know you’re considering moving your business to lower your fees. They’ll have your transaction data on hand, so ask them to review your activity and suggest alternatives that could save you money. MoneySense contributor Bruce Sellery did this. While they weren’t able to waive his monthly bank fee, they did lower the rate on his line of credit and waived the annual fee on his brokerage account.
3. Put a price on convenience
A big part of what you’re paying for with those banking fees is convenience: the ease of withdrawing money from the bank’s vast network of ATMs or just having all your accounts under one roof. You can find no-fee chequing accounts with no minimum limits at places like PC Financial, Tangerine and some credit unions, including FirstOntario and Coast Capital. Just be mindful of any extra fees you might be in for. Case in point: Tangerine’s free chequing account has fees for Interac e-Transfers ($1 per transaction) and overdraft protection—$5 per use with 19% interest on the negative balance.
All this is to say, banks raise fees. It’s what they do. With a bit of planning you may not have to pay them.