Save & Invest
The Best No-Fee Bank Accounts in CanadaJanuary 13, 2023
When looking into opening a new account, whether that be chequing or savings, one of the things we tend to overlook are the fees. While it has become a bit of the norm to have fees associated with your bank account, recently more and more banks and financial institutions are advertising no fee bank accounts. While many of these accounts are a feature of credit unions, banks are now falling into the trend to compete with these financial institutions. Other financial institutions are being created as online only institutions allowing them to afford more of the no-fee bank account offers as well.
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Chequing and Savings Accounts
You may notice that fees are generally linked to chequing accounts and not savings accounts. Savings accounts usually have an earning interest rate attached to them. Why is this? Well savings accounts are meant for what they sound like, saving. Chequing accounts, on the other hand, are meant for everyday transactions and bill payments.
When you are deciding between savings and chequing accounts in Canada, it really just depends on what you intend to use the account for. If you are just wanting to put some money away for a trip, a house, or just in general don’t intend to spend the money, then a savings account is likely the best choice for you. If you are looking to get your pay deposited, pay bills, withdraw money, set up pre authorized transactions, or take advantage of any other daily banking feature, then a chequing account will probably be the best option for you. The next step is then finding the chequing account that works for you, ideally with the lowest or no fees.
Bank Fees at Top 5 Banks
While bank fees are normal for a lot of Canadians, many more are turning to free chequing accounts. But how much do you really save with a no-fee bank account? How much are you really spending per month on bank fees? Let’s take a look at the top five banks and see what their fees are. In general though, the top 5 banks do include free E-transfers and mobile cheque deposits with all of their account options.
With TD Canada Trust, the amount you pay for monthly banking fees depends on the type of account that you choose. If you go with the TD everyday chequing account, then it is $10.95 per month. That being said, this type of account only allows for 25 transactions per month, but it does have free unlimited E-transfers. If you go with the TD unlimited chequing account then you get unlimited transactions, unlimited E-transfers and no ATM fees for $16.95 per month. Then there is also the TD all-inclusive banking plan. This plan has unlimited transactions and E-transfers, no ATM fees, free cheques, and plenty more all for $29.95.
If you are just looking for a savings account or a high interest savings account, there are no monthly fees with TD. Only chequing accounts require a monthly fee.
Scotiabank offers a variety of banking options with different fees. They have a basic account that is only $3.95 per month. Keep in mind though, that this account only allows up to 12 transactions per month but allows for unlimited E-transfers. Then they have the basic account plus which is $11.95 per month and includes 25 transactions per month, also with unlimited E-transfers. The preferred package is $16.95 per month, but it allows for unlimited transactions per month. Each of these accounts do allow for no account fee if you meet a minimum bank balance and are able to maintain it. The basic account requires $3000 and the preferred is $4000. Lastly, there is also the ultimate account at $30.95 per month. This account has unlimited transactions and E-transfers as well as no overdraft fees and many other perks. It can be void of account fees as well, if you have a balance of at least $5000 or combined of $30,000 with your chequing and savings accounts.
The fees for RBC chequing accounts reflect similar to that of scotia bank. Their basic account also only accounts for 12 transactions per month and free E-transfers. It costs only $4 per month. The next choices are the RBC advantage account at $11.95 per month, RBC Signature no limit account at $16.95 per month, or RBC VIP banking at $30 per month.
RBC does have something called the Value Program which allows you to have no bank fees, or reduced bank fees, depending on the type of account you have and how many transactions you use per month. How it works is if you do one transaction you pay the listed fees, if you do two then you can save up to $6 per month in fees, and if you do three or more then you can save up to $11.95 per month. These transactions are regular banking transactions like making an eligible bill payment, a pre authorized payment or receiving a direct deposit. This rebate is applied per month based on your transactions.
So, even though RBC doesn’t actually have a no fee bank account, you can end up having no account fees just by doing transactions that you would normally do anyways. In other cases, you may just get a reduced fee month to month. In some cases, RBC also does offer reduced or no fee accounts for seniors and students so make sure you look into that before you open an account.
CIBC has a few different chequing account options with the fees depending on how much your minimum account balance is as well as your age. If you are under 25 they have a smart start account with unlimited transactions for no monthly fee. They also have their Smart Account that has unlimited transactions and allows for one ATM withdrawal per month. The fee on this ranges between $0 and $16.95 per month. Lastly is the Smart Plus. The fees range from $0 to $29.95 per month and include unlimited transactions and ATM withdrawals, credit card with no fees and overdraft protection, among other perks. If you can keep $6000 as your minimum account balance then there are no fees.
If you bank with BMO, there are no account fees for students or seniors. They also have no fee bank accounts for recent graduates, beneficiaries of an RDSP and CDCB (Canadian Defense Community Banking) members. Others will have to pay banking fees based on which chequing account they decide to go with.
Their primary chequing account is the Plus chequing account, which is $11.95 per month unless you can keep a minimum balance of $3000 in your account. This plan includes 25 transactions per month and unlimited E-transfers. The next option is the primary chequing account with performance plan. This includes unlimited transactions and e-transfers, as well as 1 free non-BMO ATM transaction per month. The cost is $16.95 per month but if you keep a minimum balance of $4000 there could be no fee. If you choose to go for the primary chequing with premium plan then it is a cots of $30 unless you have a minimum balance of $6000. This plan includes unlimited transactions and e-transfers, as well as unlimited non-BMO ATM withdrawals. This accounts also included no overdraft fees, no fees on global transfers, E-bates on certain BMO credit card fees, preferred US exchange rates, safety deposit box discounts and free cheques and drafts.
As briefly mentioned, there are many financial institutions competing against the top 5 banks with no-fee bank accounts. Some of these are even strictly online only allowing them to cut their costs significantly by not paying for physical banking space. While they do not have any physical locations, they still have advisors that are available online or over the phone. With all of this advanced technology in existence, this new way of banking can allow for less fees for those doing more of their banking transactions online. Even though most don’t offer cheques, they do have free mobile cheque deposits.
EQ bank is a subsidiary of Equitable Bank. This schedule 1 bank has been around since 1970 and has more than $42 billion in assets that are under management. EQ bank itself has a savings plus account which acts as both a savings and a chequing account. It allows for unlimited transactions, no account fees, free international transfers, CDIC protection up to $100,000 and it requires no minimum account balance. EQ bank also allows for free unlimited E-transfers which seems to be standard with most financial institutions these days.
EQ Bank also offers these same perks with their joint savings plus account. While all of the features are the same, they allow up to three account holders other than you to be attached to the account as well. The only real downside to this bank is that they don’t supply cheques, but if you are someone who does all of their banking online then this bank could be a great fit for you.
Simplii Financial also offers a no fee account. You may know Simplii by its former name, PC Financial. Their no fee chequing account gives users a lot of freedom. It has no monthly fee, unlimited transactions, free E-transfers, free cheque books and access to over 3,400 different ATMs.
Along with their no fee chequing account, Simplii Financial offers mortgages, credit cards, high interest savings accounts as well as other financial products. They are also the 2022 Ipsos award winner in three categories:
- Mobile banking excellence
- Value for money
- Recommend to friends and family
While you may not have heard of Tangerine, have you heard of ING direct? Well, that is its former name. It is a completely online bank that offers no-fee chequing accounts and high interest saving accounts. In fact, Tangerine is actually owned by Scotiabank.
A few things that come with a Tangerine no-fee account are:
- Your first cheque book of 50 cheques is free
- You have access to all of scotia banks ATMs
- Unlimited E-transfers
- Unlimited monthly transactions
- Up to 0.01% interest earned on account balances
There are a lot of perks associated with this Tangerine account. The fact that you can use the Scotiabank ATMs and not have to worry about any extra fees is a plus as well. That being said, if you do have this account and you are inactive on it for at least 12 months then there will be a fee of $10 per year.
Another option for a no-fee account is Neo Money. That being said, Neo does not have a bank card so transactions do need to be done through E-transfer, direct deposit or online banking. You can link Neo Money with your everyday banking account as well. On top of the no monthly fees, Neo Money offers unlimited transactions and you can earn interest on every dollar.
With the Neo Money account, you also have access to the Neo card. This card allows you to earn money back with every dollar spent.
KOHO is similar to Neo Money in that it is a strictly online bank. Their account is a mix of a savings account and a chequing account. You earn cashback when you spend and you can earn up to 1.5% interest on your balance. They also have an app that does have budgeting functions. There are more premium features with KOHO that you can pay a monthly fee for.
The downside to KOHO is there are no ATMs or cheques. This account would most likely be more beneficial to someone who banks strictly online. That being said, there are unlimited E-transfers so if you had another account, you could always transfer money if you need it.
Motusbank is one online bank that you may not have heard of before. This is because it is Canada’s newest online bank. They are owned by Meridian Credit Union and offer a wide range of financial services like mortgages, no fee chequing accounts, loans, investments as well as many other things.
Their no fee chequing account includes unlimited free transactions and E-transfers just like many of the other online banks. You can earn up to 0.15% back on your account balance and, because they are owned by such a popular credit union, you have access to over 3700 ATMs, as well receive a free book of 25 cheques with your account. The only fee they charge is a $30 fee if your account has remained inactive for over a year.
Motive Financial is a division of Canadian Western Bank. You may know them by their former name of Canadian Direct Financial. Unlike other online financial institutions, Motive Financial offers two different no fee accounts.
- Motive Chequing
- Motive Cha-Ching Chequing
With these free accounts you get unlimited banking transactions, a free book of 50 cheques, access to a wide range of free ATMs and 0.25% on your account balance. There are some services where fees are charged, though. E-transfers cost $1 each there is a $20 fee after 2 years of being inactive on your account.
Wealthsimple may be known for its investment opportunities, but did you know that they also offer no fee savings and chequing accounts. Along with having no account fees, with a Wealthsimple account you have unlimited transactions, no minimum balance and 1% cashback on purchases. On the savings account you earn interest of 1.5% on your balance.
The Manulife no fee account is a bit more flexible as it is a combined chequing and savings account. That being said, you do need to have a minimum balance of $1000 in order to qualify for unlimited transactions and E-transfers. With this Manulife account though, you do have access to over 3,000 ATMs, high interest rates on savings, 24/7 support and a banking app. There is also a $20 fee that applies if the account is inactive for 2 years.
Alterna Bank is an online bank that is owned by Alterna Savings and Credit Union Limited. They have a no-fee chequing account with unlimited transactions as well as E-transfers. You have access to over 3,300 ATMS and you can earn 0.05% on deposits. Alterna Bank also has CDIC (Canada Deposit Insurance Corporation) Insurance.
Another great no fee account is the PC Money Account. This account allows you to earn PC points while spending your money. With this account you could earn:
- 10 points per dollar on groceries (participating stores)
- Up to 25 points per dollar spent at Shoppers Drug Mart
- 10 points per dollar on all other purchases
- Up to 5,000 points per month for bill payments
With a PC Money Account, you can deposit funds using E-transfer. With this account you are unable to get cheques, but you are provided with a debit card.
Opening a Bank Account Online
Whether you are dealing with one of the larger Canadian banks or a strictly online financial institution, opening a bank account online is becoming easier and easier these days. That being said, many of these banks will require an application to be filled out first before the account can be opened. It is also required that you are at least 18 years of age, otherwise a parent or guardian is needed to accompany you. If the bank you are looking into has physical locations, you may be required to go in.
If you are looking into opening a strictly online account an application is still required. That being said all they really ask for is a short application form as well as your SIN number. Because these companies are usually smaller and can afford to have their customers on no-fee accounts, the account approvals can be much easier to obtain than those from a larger bank.
Can you open an account instantly online?
In Canada, it isn’t common to be able to open a bank account online instantly, you need to wait for application approval before you can start using the account. That being said, it usually doesn’t take very long before an approval comes in. Once that is done, you can start transferring with the account. You will have to wait for the debit card to come in the mail.
Best Banks for No Fees
If you take a look at the different banks above you will notice that the online banks are the ones that tend to offer the no fee accounts. That being said, you are able to get no fee accounts at the larger banks as long as you meet the requirements. Before you decide on which bank is best for you, you should take a look at what you are looking for in a chequing account.
There are plenty of no fee accounts that are strictly only and not affiliated with a large bank. This can inhibit certain banking activities like cheques and drafts. Some do not even have debit cards. That may work well for you though.
If you are looking for a no fee account that allows you all of the same banking practices as traditional banks, you still have options, just not as many. Many people in these situations look towards a credit union though, if they can’t find the online account that works for them.
What is the Best Bank with No Fees
If you are still looking at one of the traditional top 5 banks, they all have different options for no fee or reduced fee accounts. The one that stands out though is RBC. Other larger banks base their fees and discounts on minimum account balances, RBC gives rebates based on transactions per month. 3 or more transactions can get you the largest monthly rebate. That being said, you may still have to spend a small amount depending on the account you choose.
A great alternative to a large bank is a credit union. Many credit unions in Canada offer no fees on their chequing accounts. Your deposits are also protected by provincial deposit insurance. That being said, what each credit union offers will differ depending on the credit union and what province in Canada that it is located.
Valley First Credit Union
Like most credit unions, Valley First offers a free chequing account with unlimited transactions, unlimited E-transfers, access to thousands of different ATMs and it doesn’t require you to maintain a minimum balance to keep your account.
Valley First is a credit union that is located in BC, but it is a division of First West Credit Union. They have different credit unions all across Canada that offer very similar accounts to that of Valley First.
Innovation Credit Union
This credit union is headquartered in Saskatchewan but helps Canadians all over the country (except Quebec). They also offer a no fee chequing account with free unlimited transactions and e-transfers, have no minimum balance requirements, and offer access to thousands of ATMs all over the country. In order to avoid the surcharge on the ATM, if there is a ding free sticker on it you are safe to use it without incurring fees. They also have an app that will tell you, as an Innovation Credit Union customer, what ATMs you can use without paying a fee.
When it comes to looking for a no fee bank account there are plenty of options out there. Take a look at what you intend to use the account for and how often you plan to use it. You can go with a traditional bank, an online bank or even a credit union. There are so many different options out there and the ones we provided above barely even scratch the surface. Also keep in mind that no bank account has to be permanent. You are able to switch and cancel whenever you like.