How to avoid bank fees
Though they may seem unavoidable, there are steps you can take to skip those pesky payments
One way that banks add to their record profits is by the seemingly annual ritual of hiking service fees and increasing the minimum monthly balance required to waive account fees.
Indeed, since December 2016, we’ve seen BMO increase minimum monthly balances by $500 to $1,000 on chequing account plans; Scotiabank raise monthly fees by $1 on most plans and increase minimum monthly balances by $500 on certain plans and TD increase the monthly fee on its Unlimited Chequing Account plan by $1. Coming up on Sept. 1, CIBC will eliminate the monthly fee waiver on its Everyday Chequing Account and instead charge $3.90 per month, regardless of the account balance.
Bank fees might seem unavoidable, but there are steps you can take to skip them altogether. Here are five ways to get around the fees: 1. Maintain a high balance in your unlimited chequing account Opt for a full-service chequing account if you’re the type of person who uses a debit card for most purchases, makes a lot of automatic bill payments and requires a full-service bank for in-branch transactions.
Unlimited transactions at most banks will cost about $15 per month and require a high minimum balance to waive the fees. You’ll have to decide if keeping $5,000 in a chequing account is worth it for you to get unlimited banking. 2. Maintain a minimum balance in a basic chequing account Canada’s big banks were asked by the federal government to offer low-cost accounts to consumers for $4 per month.
These accounts offer bare minimum services and 10 to 12 transactions per month, and some will waive the monthly fee provided you maintain a minimum balance.
Look for terms like “basic” or “minimum” accounts, as these options are not well advertised by the banks and in some cases are buried well below other more profitable banking options online.
Aminimum or basic account is a decent option for those who use cash or a credit card for the majority of their transactions, but still require the use of a fullservice branch from time to time. 3. Combine a no-fee online bank and a basic chequing account at a big bank Open a no-fee chequing account at an online bank, such as PC Financial, Tangerine or a local credit union, and pair it with a basic or minimum chequing account at a big bank. Just remember to maintain the minimum balance to waive any monthly fees.
Use the free account for transactions such as bill payments, debit purchases, email money transfers (free with Tangerine) and cheque payments (free with PC Financial). Access the full-service branch to get a bank draft, cash a cheque without a long hold and have a wider network of ATMs from which to choose. 4. Use a no-fee online bank or credit union Technology has changed the way we bank. Outside of those customers with more complicated banking needs, many of us can get the same level of service from an online bank or credit union as we can at a full-service bank.
The biggest difference between online and bricks-and-mortar banking? No fees.
Credit Unions have also become more competitive and some offer low- or nofee accounts to attract your business. 5. Just ask for a discount It’s an annual ritual for some Canadians to call up their telecom provider and negotiate a better deal on their cable, internet or phone charges. Why not do the same for our banking?
Most deals and promotions exist to attract new customers.
What about an incentive for their existing customers?
Since your bank is not likely to hand over a better deal to everyone, it’s up to you to ask (or demand!) one.
Keep in mind that the only way this negotiating tactic will work is if you’re actually willing to follow through and close your account if you don’t get the deal you want. Reach Robb Engen at robbengen@gmail.com