Top things to know about bank account fees in Canada

At first glance, bank fees might seem like small, harmless charges — what's a few dollars here or there, right? But over time, these costs can pack a surprising punch, adding up to hundreds or even thousands of dollars quietly exiting your account. Knowing what you're paying for — and how to avoid extra fees — can make a big difference in keeping your money where it belongs.

In this guide, we'll explore essential questions about bank account fees in Canada, where to find fee information, and most importantly, how to avoid unnecessary fees like a pro, such as with a no-fee daily Chequing Account at Tangerine.

What are bank fees, and why do banks charge them?

In the simplest terms, bank fees are what banks charge for managing people's money. These fees cover a range of services, from administrative costs to facilitating transactions like wire transfers or bill payments.

You might think of them as the "service charge" for holding your cash, but they're more varied than that. Some fees are one-time (like when you send a wire transfer), while others are charged monthly (like account maintenance fees). And if you're not paying attention, they can quietly eat into your savings.

Types of bank fees you might encounter

Fees can vary from bank to bank and from account to account. Here are the most common fees that can quietly chip away at your balance:

• Monthly account maintenance fees: This fee, typically ranging from $4 to $25 per month, is charged basically to keep your chequing account open. Many banks will waive this fee if you maintain a minimum balance or set up direct deposit, but you may be charged if you don't meet those conditions.
• Transaction fees: Many bank accounts allow a limited number of monthly free transactions (e.g. debit purchases, ABM withdrawals, or money transfers). If you exceed the limit, you may incur fees ranging from $1 to $5 for each additional transaction.
• ABM fees: It can be incredibly frustrating when you're caught off-guard by charges for using an ABM outside of your bank's network. In Canada, your bank could charge you up to $5 for using an out-of-network machine, not to mention fees from the other bank network or the machine's owner. That fee can be even higher internationally. Picture this: You're on vacation, standing in front of a foreign ATM, hoping that the "Insert Card" sign isn't mocking you. You withdraw $25 and later realize you've paid an additional $5 for the privilege. That mojito just got pricier.
• Non-sufficient funds (NSF) fees: Ah, the dreaded NSF fee. If you try to pay but don't have enough funds in your account, the transaction gets rejected, and you might be hit with a charge, although new regulations expected in 2026 mean that the charge will be limited to $10.
• Overdraft fees: Many banks offer overdraft protection to help clients avoid NSF (Non-Sufficient Funds) fees. This feature allows your account to temporarily go below $0, helping to cover payments even when funds are low. Some banks charge a flat monthly fee for this coverage, whether or not overdraft is used. At Tangerine, however, Clients with approved Overdraft Protection on their Chequing Account are only charged a $5 Overdraft Protection fee when their Account is actually overdrawn — and never more than once per month. (Interest applies to the negative balance until it’s paid off.) Note that Overdraft Protection isn’t automatically part of your Account. There's an application and approval process, which includes a credit check. This is standard practice across most financial institutions.
• Bank draft fees: You may need to make a secure payment with a bank draft, such as for a large purchase or official transaction. Unlike personal cheques, bank drafts are guaranteed by the bank, which can provide the recipient with peace of mind. However, they often come with a fee, which varies depending on the institution.

How much are you paying?

Understanding how much you're paying in fees is critical to taking control of your finances. Many people overlook the small fees that accumulate, but those seemingly minor charges can add up. Checking your bank's fee schedule is the first step. Tangerine, for instance, makes it easy to find its transparent fee schedule online.

Imagine paying a $10 monthly fee on your bank account. That doesn't sound too bad, right? Now, multiply that by 12 months, and suddenly, you're spending $120 a year. Add another $120 a year in transactions and other incidental fees. Over five years, that's $1,200. Over 10 years? Let's just say that's more than enough for a great concert or Michelin Star dinner.

Tips for avoiding bank fees

The good news is that many bank fees are manageable, and some are avoidable with planning and know-how. Here's how you can dodge fees and keep more of your money in your pocket:

1. Be aware of holds and freezes

Sometimes, when you deposit money into your account — mainly through cheques or larger transactions — the funds are held. This means that the money isn't immediately available for withdrawal or use. Banks can take several days to verify the deposit, particularly if it's coming from another institution.

So, if you want to be sure you won't incur an NSF fee, consider using e-transfers to avoid the frustration of being caught in a freeze. At Tangerine, Interac e-Transfer^® is free, and the funds become available as soon as they're deposited.

Think of it like sending a text versus a message in a bottle — one gets there instantly, while the other takes the scenic route.

2. Use overdraft protection to avoid NSF fees

It's not uncommon to make the mistake of accidentally overdrawing an account. Whether it's an unexpected bill or an impulse purchase, you can end up with an NSF fee if there aren't enough funds in your account. Overdraft protection can save the day by allowing transactions to go through even if your balance dips below zero.

3. Keep an eye on your balance

One of the simplest ways to avoid fees is to monitor your account balance regularly. Make sure you're set up for alerts from your bank, so you can be notified when your balance gets low. Tangerine's Orange Alerts can notify you when your balance dips below a set amount, helping you avoid overdraft or NSF charges.

4. Choose the right account for your needs

Not all accounts are created equal, so choosing one that fits your banking habits is essential. If you're paying monthly fees or per-transaction charges, you might want to switch to an account that suits your needs better. Tangerine's no monthly fee daily Chequing Account is an excellent option for everyday banking, because there are no fees for everyday transactions¹.

Finding the right account can feel like unlocking a financial upgrade that keeps more of your hard-earned money in your pocket instead of going toward fees.

How to switch to a new bank in Canada

If you're tired of racking up fees at your current bank, switching to a low- or no-fee option, like Tangerine, could save you hundreds of dollars over time. While the process might seem daunting, it's simpler than you think. Here's a step-by-step guide:

1. Open an account at a separate bank

You'll need to open a new account before closing your current one. Tangerine's no-fee daily Chequing Account is a great choice, especially if you're want to pay no fees for everyday transactions¹.

2. Start moving your recurring transactions

One of the trickiest parts of switching banks is transferring all your recurring payments and direct deposits. Start by reviewing your most recent bank statements and making a list of all the recurring payments you need to switch—things like utility bills, streaming subscriptions, and gym memberships.

Remember any government deposits, like tax refunds or benefits. Move these over to your new account before closing the old one. If you need a void cheque, you can quickly get a digital one through the Tangerine app.

Switching banks without missing a payment takes a bit of planning — think of it as financial spring cleaning. You wouldn't want to accidentally lose track of your streaming subscriptions and miss the next big show drop!

3. Consider if your fees would be lower elsewhere

The whole point of switching banks is to save money, so take a moment to evaluate whether this move will reduce your costs. Compare your current bank's fees with what you'd pay at Tangerine or another no- or low-fee bank. Even a small $10 monthly fee can add up over time.

The cost of not switching banks

Let's talk about opportunity cost. If you're sticking with a high-fee bank because the thought of switching seems like a hassle, you might be paying a price in the long run. Many Canadians tend to stay with the same bank they opened their first account with — sometimes out of loyalty or inertia. But that loyalty can come with a cost.

The average Canadian can save hundreds of dollars by switching to a no-fee bank like Tangerine. Over time, that extra cash could be used to pay down debt, boost savings, or fund a vacation. Plus, you may get access to additional banking tools, such as budgeting apps, real-time alerts, and financial goal-setting features, all designed to make managing your money easier.

FAQ: Common questions about bank fees in Canada

What are the most common bank fees in Canada?

The most common fees include monthly account maintenance, ATM/ABM withdrawals, NSF (Non-Sufficient Funds), overdraft charges, and bank draft fees. These charges vary by bank but can add up over time if you're not careful.

How can I avoid foreign transaction fees?

Foreign transaction fees typically apply to credit card purchases made in another currency — whether made outside of Canada or online in a foreign currency.

To avoid foreign transaction fees, use your bank's global ATM network when travelling abroad, or opt for credit cards that don't charge these fees.

Also, using a credit card at an ABM (automated banking machine) may count as a cash advance, which often comes with additional fees and interest from the moment of withdrawal.

Using your debit card at an international ATM can be a cost-effective way to reduce your foreign transaction fees — especially if your bank is part of a global ABM network. Tangerine Clients can take advantage of the Scotia Global ATM Alliance, which provides access to fee-waived withdrawals at partner ABMs around the world when using their Tangerine Client Card.

Using technology to stay on top of fees

Most banks today offer digital tools to help you keep fees in check, from tracking spending to setting up low-balance alerts. Using your bank's app is often the safest way to manage your money, and many Canadian banks offer robust features. Tangerine, for instance, includes tools like the Left to Spend feature, which creates a simple budget based on your income and expenses to give you a clear snapshot of how much you can safely spend. Tangerine also recently introduced Tracker, an easy-to-use tool that gives you a clear, categorized view of your spending habits — so you can quickly see where your money’s going each month.

Think of these tools as your personal money managers — without the extra charges that can sneak up on you.

Take action today to protect your money

Bank fees might seem small at the moment. Still, they have a way of quietly accumulating over time, just like those streaming subscriptions you forgot to cancel. By being proactive — whether it's switching to a no- or low-fee bank, like Tangerine, using overdraft protection, or simply keeping a closer eye on your balance — you can save hundreds, even thousands, over the course of your financial journey.

Why let fees nibble away at your cash when a few simple changes can keep more of it in your pocket? Start by reviewing your bank's fee structure, make the switch if it makes sense, and use the tools available to you to stay on top of your accounts.

The bottom line: When it comes to bank fees, knowledge is power. Take control of your finances today, and let your bank work for you — not vice versa.

¹ Tangerine Clients pay no fees for everyday Chequing transactions. For non-standard transactions, a fee may apply.